Kamalacare Is Just Bidencare

Kamala Harris’ most notable foray into health care policy was when she endorsed an idea she now says she doesn’t support.

In 2017, she co-sponsored a single-payer health care plan developed by Sen. Bernie Sanders (I–Vt.). That plan would have cost about $30 trillion, by many estimates, and would have eliminated virtually all private insurance, replacing it with a single government-financed plan.

When Harris campaigned for the Democratic presidential nomination in early 2019, she initially proposed a plan along those lines and gave interviews backing the elimination of current private health insurance arrangements. The backlash was swift and strong, and so was Harris’ reversal. Within a few months, Harris had backed away from single-payer, touting a new, less detailed plan that would have expanded government-run health coverage without erasing private coverage.

With sagging poll numbers, Harris dropped out of the Democratic nomination contest before the first primary even took place. Among the reasons her candidacy flopped was that she was seen, even by some Democrats, as a flighty figure prone to politically convenient about-faces.

Now that she has climbed to the top of the Democratic ticket, it is once again worth asking what her approach to health care policy actually is. Given that she served as vice president under President Joe Biden, the best way to understand it is probably to look at Biden’s approach to health care policy.

When Biden campaigned for the Democratic presidential nomination in 2019 and 2020, he also faced questions about single-payer, sometimes called Medicare for All. But he defined his approach to health care more by what he wouldn’t do than by what he would.

Biden’s chief antagonist in the race was Sanders, and arguably the most prominent policy dispute between them was over Medicare for All. Sanders was for single-payer. Biden was against it.

Medicare for All, Biden said, would cost too much and would deprive people of health plans that work right now. Asked whether he would veto Medicare for All legislation should it come to his desk as president, Biden responded carefully, saying: “I would veto anything that delays providing the security and the certainty of health care being available now.” It wasn’t quite a promise to veto Medicare for All, period. But it was a strong signal that he wouldn’t back the plans Sanders supported.

So what was Biden’s preferred approach to health care? Rather than wiping out the current system, Biden favored a more incrementalist approach. Biden’s priority, a campaign spokesperson told the press, was to move toward universal coverage. Biden wanted to “build on the profound benefits of the Affordable Care Act.”

Practically and politically, Medicare for All was never really on the table, not even in a potential Sanders administration. The cost was too high. Even among Democrats, the votes simply weren’t there. To a great extent, the debate was a proxy fight—a policy hypothetical allowing the candidates to sharpen their public personas. The upshot was clear enough. Sanders was a single-payer supporter, a radical, an American socialist; Biden was just a garden-variety big-government liberal.

At the time, Biden’s campaign said he supported a “Medicare-like public option,” essentially a government-run plan intended to exist alongside America’s current mix of private and public health financing systems. But the core of his campaign’s answer was the invocation of the Affordable Care Act, more commonly known as Obamacare.

When Obamacare became law in 2010, Biden was vice president. At the signing ceremony, Biden was famously caught on a hot microphone leaning over to then-President Barack Obama’s ear to say, “This is a big fucking deal.”

Biden wasn’t wrong: At a scored cost of nearly $1 trillion over the first decade, with a vast array of subsidies and regulations and programs and subprograms, Obamacare was arguably the single most consequential piece of domestic policy legislation passed over the last 50 years. After its passage, the law underwent numerous legal, political, and implementation challenges. But for the most part, the law stayed intact. By the time Biden entered the White House, the legal challenges had ceased and most Republicans had quieted about repeal. Obamacare had become an entrenched part of the American health care firmament.

As president, Biden had no comparable big-picture health care initiative. His approach was to take that big deal and make it bigger.

Bigger has not meant better. On the contrary, Biden has made American health care more expensive and more unwieldy. His policies have made care more expensive for both taxpayers and individuals, limited choice for patients, and generally neglected to address, or exacerbated, the looming fiscal challenges that health care programs present for the federal government. Bidencare is best understood as Obamacare, but more expensive and worse.

Consider one small aspect of Biden’s health care policies—his approach to short-term, limited-duration health insurance (STLDI), which stands in marked contrast to President Donald Trump’s.

Trump was no one’s idea of a health policy wonk, to put it mildly. While campaigning for the GOP presidential nomination, he praised single-payer health care. Although he promised to replace Obamacare with something better, he struggled to articulate what that something might be. After a Trump-backed congressional effort to repeal the law failed in a dramatic late-night vote in 2017, health care policy was mostly put on the back burner.

Obamacare remained the law of the land. Meanwhile, the biggest complaint about the law remained: The plans it offered were too expensive. The health law required insurance sold through its government-run marketplaces to come loaded with coverage options, whether or not the patient wanted or needed them.

There was, however, an exception: STLDI plans, which were not bound by all of Obamacare’s regulatory requirements. Unlike Obamacare plans, which were generally made available only during a once-a-year, government-determined open-enrollment period, STLDI plans were available year-round. Because they were less regulated, short-term plans were much less expensive, on average.

Initially, these plans were limited to just a few months at a time. But the Trump administration allowed these short-term plans to be renewed for up to a year, effectively circumventing Obamacare’s costly coverage mandates.

The vast majority of these plans, according to the Congressional Budget Office, offered “comprehensive coverage”—and although they “may exclude some benefits” required under Obamacare, “they sometimes offer wider provider networks or lower deductibles than are available through other types of nongroup and small-group coverage.” Even beyond the lower price tag, there were ways they could be better than conventional Obamacare plans.

The Biden administration branded these plans “junk insurance” that “undermined the promise of the Affordable Care Act.” In early 2024, the White House issued a rule strictly limiting those plans to just three months. The White House announcement billed the rule as “a major step to crack down on junk health insurance for American families and consumers and deliver better health.”

But whose health was being protected? Whose lives were being improved? The primary result was that health insurance for many Americans would be more expensive or simply unaffordable, and also less accessible thanks to Obamacare’s time-limited enrollment rules. In the name of upholding the promise of Obamacare, Biden had made the market for health insurance worse.

Biden was not immune to criticisms of the health care law, in particular to the complaint that the insurance offered on Obamacare’s exchanges was too expensive. This was a complaint highlighted by the law’s namesake, former President Barack Obama, who, in a speech marking the law’s anniversary, lamented that health care “subsidies aren’t where we want them to be, which means that some working families are still having trouble paying for their coverage.”

The cost concerns were particularly acute for a certain sort of middle-class household. The health law initially subsidized coverage for families making up to 400 percent of the federal poverty line, a little over $100,000 a year for a family of four. But those earning just over the subsidy threshold were left to pay full price, often thousands of dollars per year.

Where Trump had responded by deregulating cheaper plans, Biden responded by boosting subsidies for six-figure earners. The first major piece of legislation that Biden signed as president was the American Rescue Plan (ARP), a deficit-financed $1.9 trillion spending bill passed entirely with Democratic votes. Contained inside that bill was $34 billion to boost subsidies for Obamacare. The subsidy formula was complex, but depending on the locality, the subsidies were expanded to cover some families making up to $350,000 annually.

The enhanced funding in the ARP was temporary, lasting two years. Like the rest of the law, it was, in theory, just a momentary pandemic relief measure. But from the outset, it was clear the real intent was to make the expanded subsidies permanent. Thus, a further extension was stuffed into another Biden-backed spending bill, the Inflation Reduction Act, which pushed the subsidy boost out to 2025, at an estimated cost of about $25 billion a year.

The subsidy expansion didn’t just boost subsidies for higher-income people. It increased the value of the subsidies for lower-income people. With the newly expanded subsidies in place, households earning between 100 percent and 150 percent of the poverty line paid effectively nothing for health insurance. So it was hardly surprising that in the years after the expansion was implemented, the percentage of households enrolling in coverage via Obamacare and claiming incomes in that range grew rapidly.

Indeed, in several states, the number of enrollees claiming incomes in that range was actually larger than the total possible number. According to a June report by the Paragon Health Institute, in nine states “the number of sign-ups reporting income between 100 percent and 150 percent [of the federal poverty level] exceed the number of potential enrollees.” The Biden administration bragged about increasing Obamacare sign-ups and making the enrollment process easy; in practice, that meant the system was designed to enroll people swiftly rather than make a real effort to verify incomes. The Paragon report found evidence of significant fraud in nearly half of all states, at an estimated cost of $15 billion to $20 billion a year.

Obamacare’s subsidies for individual coverage are costly by any definition, but they pale in contrast with the great cost of America’s two legacy health care programs, Medicare and Medicaid. Annual spending on Medicare alone already runs over $1 trillion. Along with Social Security, the projected growth of spending on health care entitlements is the largest driver of long-term debt. To a first approximation, America’s long-term fiscal challenges—the unsustainable debt and deficits that officials have noted but ignored for nearly two decades—are almost entirely health care financing challenges. Biden has done little of substance to improve the dire outlook.

The best case for Biden’s management of health care entitlements is that as of 2024, Medicare’s Board of Trustees expects its Part A Hospital Insurance trust fund—an accounting gimmick that allows Medicare to draw on certain tax revenue—to be depleted in 2036, five years later than the trustees reported in 2023.

But Part A represents less than half of Medicare spending, and its share of the total is declining. Meanwhile, the overall growth of the program continues to pose problems. Of the major federal budget categories, only interest payments are growing faster than health care spending, and the 2024 trustees report projects that spending in future years will grow “at a faster pace than either aggregate workers’ earnings or the economy overall.” In the same report, the trustees issued their seventh consecutive “funding warning” for Medicare.

Biden’s response when the report appeared was to release a two-paragraph statement blaming Republicans in Congress for siding with “the wealthy and special interests” and pushing entitlement changes he called “cruel and unnecessary.” He touted a proposal to raise taxes on the rich in order to extend Medicare’s solvency—a fantasy plan that is a total political nonstarter.

The reality is that Biden has demonstrated little to no interest in responsible fiscal stewardship of America’s health care programs. He boosted Obamacare subsidies in the ARP without either raising revenue or cutting spending. He has been so focused on boosting enrollment that he has encouraged fraud. He has allowed health care spending to continue its long march over the federal budget, overtaking nearly everything else, adding trillions to the long-term debt, and in the process contributing to rapidly rising cost of interest payments. In the meantime, he has pursued small bureaucratic tweaks that make it harder and harder for Americans to escape Obamacare’s imposing regulatory costs.

There is no reason to think that Harris would depart significantly from this approach. As she began campaigning for president, she signaled that her economic policies would prioritize expanding federal funding for health care and social programs. In her first major speech on economic policy, Harris promised to “take on the issue of the cost of health care,” and attacked Trump for wanting to repeal Obamacare, and for having no plan to expand health care access. A headline in The Hill summarized her health care agenda: “Harris vows Biden-era health care programs will get bigger.”

In August, when Biden’s press secretary, Karine Jean-Pierre, was asked about how the two would differ, Jean-Pierre said flatly that they would not. “They’ve been aligned for the last three and a half years. There’s not been any daylight,” Jean-Pierre said. “She’s going to build, going to build on the successes that they’ve had.”

The assumption embedded in her response is that Bidencare has been a success and is worth continuing.

Unlike Obama, Biden doesn’t have a signature health care initiative to his name. But even if Bidencare is harder to capture in a single legislative vehicle, it clearly exists as a policy worldview. It’s not Sanders-style socialism, but a big-government liberal’s approach to health care: higher costs, more spending, more bureaucratic control.

It’s no Obamacare. But it’s still a pretty big deal.

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Source: https://reason.com/2024/10/20/kamalacare-is-just-bidencare/