An Expert Explains What You Should Know About Private Insurance & Medicare For All

The 2020 Democratic presidential debate has brought up a number of issues ranging from immigration to equal pay, but there's been one topic that's been at the center of the race — health care. While many candidates support a universal health care plan, some are butting heads over whether to keep or ban private health insurance for United States citizens. Given the drama about health care already in American politics, you have to wonder, why is this the big deal? What would happen if private insurance was banned? Here's what to know.

In a twist from previous election cycles, a universal health care plan which would allow all Americans to be covered by government-supplied health insurance, often called Medicare For All, has the support of all major Democratic candidates for president in the 2020 election cycle. The sticking point for many, however, is the question of whether or not to allow private insurance to exist side-by-side with the public option. Sen. Kamala Harris of California, Sen. Bernie Sanders of Vermont, and Sen. Elizabeth Warren of Massachusetts have all stated they want to ban private health insurance as a part of their Medicare For All plan. Meanwhile, other candidates have pushed against the proposal, with Sen. Cory Booker of New Jersey, former Rep. John Delaney of Maryland, and Gov. Steve Bullock of Montana claiming there would be severe backlash if private health insurance was taken away from citizens.

During the July 30 and 31 Democratic debates, candidates argued the point amongst themselves, going back and forth about what would be most effective for Americans. "If you want stability in the health care system, if you want a system which gives you freedom of choice with regard to a doctor or hospital, the answer is to get rid of the profiteering of the drug companies and insurance companies,” Sanders said at one point.

But what does banning private insurance really mean? "What they mean is that there couldn't be any private insurance that is an option for getting a broad range of benefits," Mark Peterson, a professor of public policy who specializes in Congress and health care policy at the University of California, Los Angeles (UCLA), tells Elite Daily in an interview. Basically, the private market wouldn't be allowed to compete with the publicly provided insurance.

Many proponents of universal health care in the United States have pointed to other nations, like Canada and the United Kingdom, as examples. But even in countries which already have a universal health care system, most of them still use a form of private health insurance in their plans. In Canada, for example, private plans are used as supplemental insurance to cover things that the universal health care doesn't provide — things like vision care and prescription drugs, per Vox. "From the last figure I saw, 31% of health care expenditures in Canada happened outside of the public sphere," Peterson notes. In the United States, some people who already have publicly-funded Medicare do something similar, buying "Medigap" insurance plans from private providers to cover things Medicare won't.

In other places, like the UK, private health insurance can be used as a way to get better quality care than the public system provides — but it comes at a price. "You go to the United Kingdom, one can get private insurance even in a national health service system to jump the line to see a doctor more quickly," Peterson says. "If you have enough income, and you're willing to make a lifetime choice, you may instead buy private insurance." According to Vox, about 11% of the UK population chooses to buy private insurance to get faster access to doctors and services.

In short? Private insurance keeps things moving, even in countries where public coverage is guaranteed. "All these other systems have ways that private insurance either smooths rough edges or they're designed to give an escape valve to those who are more wealthy," Peterson summarizes.

However, private insurance is already deeply embedded in the American health care system, making it difficult to actually remove. According to an August 2018 report from the U.S. Census Bureau, over 67% of Americans were covered by private health insurance in 2017, while nearly 38% of Americans were covered by government-run insurance plans that same year. Notably, though people of color are disproportionately left uncovered by health insurance. According to the U.S. Census Bureau, more than 16% of Hispanic individuals and nearly 11% of Black individuals did not have any insurance coverage in 2017. According to Peterson, candidates who support banning private insurance under a Medicare For All system may see it as more beneficial than the benefits people receive from private health insurance coverage, mainly due to existing costs of things like premiums, deductibles, and co-pays.

In addition, Peterson notes that by eliminating private health insurance, millions of people would likely lose jobs. As of 2018, the health care industry was the largest employer in the United States, per The Atlantic. According to the U.S. Bureau of Labor Statistics, health care jobs are projected to grow 18% from 2016 to 2026, making it one of the fastest growing industries in America.

"Whether you think the private insurance industry and health care realm is evil or good, there are a lot of people employed," Peterson states. "The notion that you're going to put out a business that is a very substantial part of the American insurance industry doesn't seem particularly likely."

That's not the only obstacle facing Medicare For All. Peterson notes that many Americans may prefer private health insurance due to an inherent distrust of putting their insurance coverage, and thus health care access, in the government's hands. "For a lot of people in the United States there is a deep skepticism of government, [so] that they like getting something through a private entity," Peterson says.

Clearly, Medicare For All is a lot more complex than just a straightforward, "insurance for everybody" talking point. A lot will depend on what happens in the 2020 election, but hey. It can't get any more complicated than it is now. Can it?