Economy

The Health Care Fight Isn't Just Political

July 25th 2017

By:
Sarah Gray

Last week I set out to put together a "Got Your Attention" explainer on health care in preparation for this week's Senate health care votes, including yesterday's vote-a-rama.

All of the votes failed—including a dramatic early morning vote on the so-called "skinny" repeal

Simultaneously, I failed to get the health care episode published prior to the action in the Senate, because of, ironically enough, health care—providing a perfect example of the unpredictability and fragility of the human body, and the need for insurance to cover expensive medical costs.

The health care fight isn't just political, or journalistic, it's personal.

I was inspired to reach out to experts for two reasons: One to help demystify what was happening with the repeal and replace efforts. And two, because in early July my Bubbe (Yiddish for grandmother) was hospitalized due to a large stroke.

For a week-and-a-half she went through a series of ups and downs in the hospital, and just shy of a week ago she lost her health care fight. While surrounded by loved ones, she quietly succumbed to both new and old ailments. A week in the office recording and editing was replaced with a week of funeral preparations and sitting shiva (the Jewish tradition of mourning).

After days spent enveloped by friends and family remembering her incredible life, I'd sit down and read the latest reports on the GOP's attempts to repeal and replace. And though my Bubbe did not survive this latest hospitalization, I thanked my lucky stars that she had Medicare and supplemental insurance during her stay. My family focused on getting her well, enjoying her last moments, and later helping her pass comfortably. The fear of going bankrupt over health care costs wasn't part of the equation. This cannot be said for many families—a number that would undoubtedly expand if millions lost their insurance with an ACA repeal.

In both of my interviews—with Gerald Kominski, Ph.D., a professor at the UCLA Fielding School of Public Health and director of the UCLA Center for Health Policy Research, and Andy Slavitt the former Acting Administrator of the Centers for Medicare and Medicaid Services between March 2015 and January 2017—we discussed grandparents and health care.

Kominski explained to me that part of my paycheck is "paying for your grandparents if they’re on Medicare." A small percentage of every check goes to Medicare Part A, which covers hospitalization. Slavitt, in connecting why young people should care about an ACA repeal, explained that it would adversely affect Millennial's grandparents.

For now it seems that all is quiet on the health care front. A deflated Senate Majority Leader Mitch McConnell ended a post-vote speech by saying it's "time to move on."

However, the New York Times editorial board warned, "[t]hough one threat has been put off, the A.C.A. is far from safe. President Trump and his health and human services secretary, Tom Price, have made it their mission to undermine the law." The president himself tweeted on Friday, "As I said from the beginning, let ObamaCare implode, then deal. Watch!"

"The president actually has two mechanisms at his disposal that he doesn't need Congress to do damage," Kominski explained to me. President Trump can stop enforcing the individual mandate, which says people have to buy insurance or pay a penalty tax, and he can stop subsidizing insurance purchased through the health care exchanges for those with lower incomes.

Not everything that Kominski and Slavitt had to say about health care was shrouded in gloom. They both seemed optimistic that there are fixes we can implement to our system, and if we focus in on elections, the political will for implementation—Kominski laid out a possible solution, and Slavitt explained how everyday folks can communicate their desires to their lawmakers.

You can listen to the entire episode above or on Apple PodcastsGoogle PlayStitcher, or SoundCloud, and you an read the lightly edited transcript with Kominski below.

Sarah Gray: Okay, so our readers might not be following all the blocking and tackling of the health care bills and debate. If you could just explain where we are now—everything from, first the collapse of voting on the Better Care and Reconciliation Act. Then, voting on a repeal only without a replacement, and a meeting between President Trump and Senate Republicans last week.

GK: Yeah. Daily. It’s shifting daily, and the messages are changing hourly. So I don’t have any inside information other than what I see reported. So the latest report is that the president's asking or insisting that the senate come up with a compromised bill before they break for recess in a couple weeks.

SG: Yes. And we also had the release of the Congressional Budget Office’s report which said that there would be 17 million losing insurance next year if there is just a repeal without a replacement, and 32 by 2026. These numbers seem very big, but also very abstract at the same time. Do you want to break down who exactly would be losing their insurance?

GK: Well, the people who will be losing will be largely people who gained insurance over the course of the last four years under the Affordable Care Act, and so that would include people who buy insurance on their own in the exchanges, what’s known as the individual markets. So these are people who don’t get health insurance through their own employer. They’re not poor, they’re low-income or middle-income. They buy insurance on their own. But many of them were able to afford it previously, because unlike employment-based insurance where typically an employer will pay somewhere around 75 percent or 80 percent of the cost, when you buy insurance on your own in the marketplace, you’re paying 100 percent of the cost on your own. And so what the Affordable Care Act did is it made subsidies available to people between certain income ranges or within a certain income range, to buy insurance. And that has benefited —there are about 12 million people nationally who are buying insurance through the exchanges, and the estimate is that roughly 55 percent or 60 percent of those people previously did not have health insurance. That’s one group.

The second group are people who are below a certain poverty level, and they’ve benefited from what’s known as the Medicaid Expansion. And in California the Medicaid program is called Medi-Cal, and many states, they have their own name for their Medicaid program. But the Affordable Care Act provided an opportunity for states to expand their programs. And this has benefited roughly 14 million people nationally, and the vast of whom were previously uninsured because they were low-income.

So, and then the third mechanism, I tend to forget this myself, but there’s a third important mechanism, and that is adult children who don’t have insurance on their own can stay on their parents’ policies up until age 26. And that’s actually about 3 million people who have benefited from that. So there’s three groups that have benefited primarily as a result of the Affordable Care Act.

SG: There are other aspects of the Affordable Care Act that maybe we forget—including things like covering people with pre-existing conditions or the birth control mandate.

So I wanted to ask—so people might think to themselves, ‘Okay well, a repeal of Obamacare without a replacement. That just means we go back to how it was before Obamacare. I was in the workforce before Obamacare went into place, so how does this impact me if this is repealed?’

GK: Sure. Well, there are— first of all, the insurance market protections that were enacted as part of the Affordable Care Act, Republicans can’t repeal those because the mechanism that they’re using, or trying to use I should say, is known as budget reconciliation. And it’s a technicality. It’s a way that the Senate in particular does business. But what it means is that the Senate has something known as the filibuster rule. And generally, you can’t pass a bill through the Senate unless you can bring what's known as closure—or they call it cloture specifically—to a discussion on a bill. And you need 60 votes to do that. If you can’t bring the discussion to a close with 60 votes, then the bill doesn't move forward. So the senate doesn't have 60 votes to repeal Obamacare. So what they’re doing is using another, a technical aspect that allows them with a simple majority of 51 votes, or 50 and then—

SG: And then Mike Pence.

GK: —the tiebreaker would be, yeah, the vice president. So a simple majority. And you can pass legislation, but the requirement is that the legislation deals solely with budgetary issues. In other words, it doesn't really change an existing law. What it does is it changes the funding under an interesting law. And that’s what they’re calling repeal. They’re saying, ‘We’re going to basically turn off the funding for most of Obamacare, and then we’re going to make some other changes that permit states the option to bypass Obamacare regulations.’ And so that is the mechanism that they’re trying to use to quote-unquote repeal the law. It’s not really a true repeal, but by turning off most of the funding mechanisms, it’s damaging.

SG: Yeah. So that was actually going to be another question I was going to have to you, the president has tweeted about this—that even if there isn’t a repeal, that there are steps that could be taken to undermine Obamacare, otherwise known as the ACA, without passing any sort of legislation.

GK: Correct.

SG: So I know that earlier this year, they stopped— or the Trump administration stopped doing any sort of advertisements encouraging people to sign up, and that hurts— that makes the pool smaller, and you know—

GK: Yeah, it doesn't look like it affected this year, but with all of the ongoing publicity about the repeal efforts, it sends the message that the markets might not be around or they might not be stable or things might not work so smoothly. And so we have another— you know, every year there’s an open enrollment season. There’ll be one this fall. And entering the next enrollment season, with all of the drama that’s been going on, it might scare people out of the market. And it’s certainly scaring insurers out of the market. Insurers are dropping out of markets around the country.

The president actually has two mechanisms at his disposal that he doesn't need Congress to do damage. He can damage Obamacare two ways. One is he can say —and he’s already basically said this—that we’re not going to enforce what’s known as the individual mandate. It’s the requirement in the law that if you either show that you have insurance, or—

SG: Where you have to pay a tax, right?

GK: You pay a tax. And the first two years of the program, the tax is relatively small. So people chose to pay the tax. The tax has gotten larger and now is $695 a year for an individual, and up to $2,085 dollars for a family. So now the penalty is bigger, and if the president is saying ‘We’re not going to collect this tax. I’m going to authorize the IRS to not try to collect this tax from people who don’t pay it.’

Then it might push, you know, especially younger healthier people out of the market and say ‘Well, I don’t have to pay a penalty. Maybe I’ll just— And the insurance company has to offer me insurance when I do get sick or if I change my mind later. So maybe I'll just put that money in my pocket for a while. I don’t go to the doctor that often, and I'm pretty healthy.’ And it may not just be young people who do that. I've met plenty of people who are approaching Medicare eligibility in their late 50s and early 60s who say ‘I’ve never been seriously ill a day in my life. I don’t really know why I need health insurance.’

The second thing he has, and this is in a sense even more powerful. Right now, the government subsidizes insurance policies for people at the bottom—not Medicaid eligibility, but within the marketplaces like Covered California. They subsidize people at the lower end of the income scale to reduce their co-payments and their deductibles, but only if they choose what’s known as the Silver Plan. And right now, the two thirds of people in California and nationally overall buy the Silver Plans and it’s mostly because of these additional reductions in their out-of-pocket costs. Well, the president has the authority to stop making those payments because they’re being challenged legally, and there’s some uncertainty about whether or not they were.. Their legality, let me put it that way. The original law was vague about the authorization of these additional payments. So even though they’ve been made, Congress sued President Obama to say that they were illegal. And even though President Trump has continued to authorize them, he has the authority to say ‘Look, we’re going to stop making these payments.’

SG: Wow, okay.

GK: And if that happens, that’s going to drive a lot of other people out of the market because they’re lower income to begin with, and then it’s going to—their insurance is going to cost more, and they’re going to have higher out-of-pocket costs.

SG: And if there isn’t a mandate, then there’s no penalty for even not paying the higher out-of-pocket cost. So I think that the big thing that people may not understand is like, if the maybe the healthier people who decide not to buy insurance, then you’re left with a pool of people who are sick. And that— does that drive up— that drives up costs, right?

GK: That’s, yes. That’s exactly right. That’s the way insurance works.

SG: Insurance companies would not want to participate in the program?

GK: Well, they either—insurance companies are not charities, even if they’re organized as a nonprofit company, they still don’t want to lose money. And so they charge a premium that’s intended to cover their costs as well, meaning how much they have to pay for the medical benefits of the people that they’re covering as well as to cover their costs of doing business. And so if they have a sicker or higher-cost mix of people who are buying their policies because lower-cost people decided they’re going to drop out of the market, they’re not going to just eat that cost, they’re going to capture it by charging higher premiums to people who are still buying the policies.

SG: Gotcha.

GK: And by increasing the premiums, it will drive some more people out of the market because now, some people say ‘Wait a minute. I could afford $300 a month, but I can’t afford $350 a month,’ or ‘I can’t afford $400 a month.’ And then you get into a little bit of a spiral.

SG: So what happens with that spiral? Does that mean more people are just showing up to hospitals, if fewer people can afford insurance?

GK: No, it’s not that more people are showing up. What it means is that the pool of people in the insurance market are just the people who are sicker, and the high-users of healthcare. People with chronic illnesses, people who have to go to the doctor on a regular basis, people who have high-cost medications to manage their health.

SG: But what if those people can’t pay anymore? Will they, is that sort of where the healthcare bankrupting people comes in? Or just stopping to—

GK: Yes, that’s one reason for bankruptcy. And then the other is that if you become uninsured but you have regular medical expenses, that’s when you depend on public hospitals and public clinics. And there are community health centers all over the country that serve people regardless of their ability to pay. But it means that, you know, if you’re one of those people it means if you go from being insured and being able to go to let’s say go to see the doctors at UCLA hospital, because they’ll ask before they make an appointment, ‘What insurance do you have?’ And you say, ‘Well, I don’t have insurance.’ And they’ll say, ‘Well sorry, we can’t see you.' So you know, ‘There’s a free clinic in Venice. Maybe you should go there.’ Now if you’re hit on the street and UCLA is the nearest hospital, by law they have to take you regardless of whether you have insurance or not, if you have a life-threatening injury. But not everybody who goes to the hospital is in immediate danger of dying. And if you're not in immediate danger of dying, they can turn you away if you don’t have insurance.

SG: Wow. Yeah, these are all things that I guess as a person who has always had employer insurance or school health insurance, I'd never thought about.

GK: I agree. And I’m in the same situation. I’m nearing Medicare eligibility in a few years, and I think about the consequences that these decisions have on people’s lives. I’ve had a preexisting condition since I was seven years old. And if I had to buy insurance at any point in my life on my own, if I hadn't worked for a company that provided insurance, I would’ve had a really hard time and I would have been turned down because of the preexisting condition. And it’s nothing that I have any control over. It’s a genetic birth defect that doesn't necessarily result in high medical expenses, but it could. And I have to claim it when I apply for insurance. I’ve always put it down on my applications, and I haven’t had any complications over the course of my life except when it was discovered initially when I was seven. But the point is is that if I were in a different line of work, I could’ve been uninsured.

SG: So that actually brings me to another question I was going to have. Because with Obamacare, there— and correct me if I'm wrong, but from my understanding, it meant that people who did have preexisting conditions couldn't be turned down for health insurance.

GK: Correct.

SG: And with a repeal, that would mean again, we have people who have preexisting conditions who might not be able to be insured. And I mean, I was shocked to learn all the different things that count as preexisting conditions, and suddenly being like oh wow, I’ve seen a therapist before. Mental health can be a preexisting condition. Or you know, I’m a woman. If I were to get pregnant, that could also be one.

GK: Correct.

SG: What is the overall impact on a repeal for this issue? And if there’re any preexisting conditions that you know off the top of your head, that a lot of people are not aware of?

GK: Well, I’m not sure that I can answer the preexisting conditions that people aren’t aware of, but you mentioned a few. And you know, pregnancy can be considered a preexisting condition. So that immediately creates a bias, a gender bias that seems completely unfair. But any number of things, including childhood diabetes, certainly adult onset diabetes, hypertension, I mean any number of things that people have can put you into a preexisting condition category, and as a result can potentially— Now, it’s not automatic, if there was a repeal of Obamacare through the mechanisms that we talked about, that states would automatically go back to the old way of doing things. Because again, those provisions are still in the law. What the Republicans would do is they have to pass a new law that gives states the opportunity or the option of bypassing the Obamacare insurance market regulations.

SG: And that was attempted in the AHCA, correct? With the waivers?

GK: Yeah, and also the BCRA as well. And this is one of the points of contention, because at least some Republican senators don’t want that to happen. They don’t want other things in the bill as well, but this is where the Republicans themselves can’t agree what should be in the bill.

You’ve got Rand Paul on the one extreme who said, ‘I don’t want any replacement. I just want us to get rid of Obamacare, because it’s too much regulation, and the government should not be regulating health insurance markets. Markets function fine on their own.’ Now he’s wrong, but that’s his belief. So he doesn't want any replacement. And then you’ve got on the other end, you’ve got Senators Murkowski and Collins who are saying, ‘Repealing without an adequate replacement just hurts the people of my state as well as people all over the country, and I can’t vote in favor of that. That doesn't make sense, to take away people’s health insurance in my state for no good reason.’

GK: You know, this is a country of about 320 million people. And 160 million, roughly 165 million get health insurance through their place of employment or they’re dependent on somebody who has employment-based insurance. Another 55 million have Medicare. Another 70 million have Medicaid. And so people in the exchanges are, there are about 12 million people in the exchanges across the entire country. And 12 million is about 3 percent of the population. And yet, for eight years it’s Obamacare, Obamacare, Obamacare.

SG: Yeah.

GK: It’s 3 percent of the population. And I’m not saying that we should not pay attention, but you know, those exchanges and the premiums in those exchanges are one piece. I talked before about the Medicaid expansion, that’s even a bigger piece. It’s been about 14 million people. But Medicaid was a big program before Obamacare. It was roughly 55 million people, almost as much as Medicare. Now it’s grown to over 70 million people. So there’s all this media, and it’s on the news every night and it’s on the talk shows every night. And I'm on the phone all day long talking about health insurance coverage for or premiums that affect 3 percent of the US population.

I’ll tell you, there’s an organization, just FYI for background information, you should be aware of if you’re not already, it’s called the Kaiser Family Foundation.

SG: Yes.

GK: Yeah, kff.org. So you already know about them. So one of the things they do is they do public opinion polling monthly on issues related to people’s attitudes about healthcare and healthcare reform and all kinds of different and interesting topics. And I use their polls and their slides in a lot of the talks that I give to students and to the public audiences. They ask people: Where do you think the majority of people get their health insurance? And 30 percent of people who responded to the question said through the Obamacare exchanges.

SG: Wow.

GK: And I thought ‘Wow. 30 percent of people think that that’s where the majority of Americans get their health insurance.’ Well, not only is it wrong, but it also makes sense to me that people would be confused and think ‘Well of course that’s where people get their health insurance, because it’s been in the news constantly for eight years.’ It must be affecting at least 150 million people, and maybe 200 million people. No, it’s affecting 12 million people.

SG: Wow, yeah.

GK: But we’re fighting. We’re fighting over it. We’re almost you know, at the point of going we’re having the equivalent of a nonviolent civil war over Obamacare.

SG: Yeah. I mean, this is—I mean, we’ve had the 2010—

GK: Talk about losing perspective.

SG: Yeah, the 2010, the 2012 and the 2016 elections have all seemed like referendums on it.

GK: And we’ve had two major Supreme Court cases that were referendums on it. And there may be another one coming down the pipe, and yeah. No, it’s a remarkable sample of case study of a law representing something way, way bigger than what it actually in reality is affecting. In other words, it is tapping into deeper emotions and deeper principles that have nothing to do with the number of people who are impacted.

SG: A much deeper anxiety about health care and the fate of it in this country, I think.

GK: Well, and I think for Republicans the reason there’s a bloodbath about this is that I think that they feel they drew a line in the sand 20 years ago under Clinton administration when they were able to dismantle welfare and turn it into a block ramp program that’s been basically frozen for 20 years. And I think they not only celebrated that victory, but said ‘Never again will we allow a government program to benefit mostly poor people, because we were able to, after 60 years, because Aid to Families with Dependent Children was passed by FDR in 1935. You know, it took us 60 years to get rid of it, but never again will we allow an expansion of government programs targeted to just help poor people.’

SG: So is this a deeper anxiety about spending as a whole? Or do you think specifically spending on poor people?

GK: Yeah, spending and big government.

SG: And big government, yeah.

GK: And spending on poor people. All of those things wrapped up together.

Because I see [health care and welfare] all as being— it’s all linked in terms of why this is such a bloody battle, and why the intensity of the effort to get rid of Obamacare, why is it so intense. Because there’s a bigger principal I think at stake for Republicans and for conservatives that this was an attempt to go back to increasing the role of government, increasing spending, and specifically targeting benefits mostly at people at the bottom of the income scale. And for all those reasons. Any one of them alone would be reason to fight it, but when you put them all together, it makes—I think it helps explain some of the intensity of the battle.

SG: So right now obviously we’re talking a lot about health care and we’re getting down to even just the general philosophies of the different parties. And I think on the left right now there’s a shift now and you hear the terms ‘public option,’ you hear the term ‘single payer’ thrown around. They seem to be buzzwords that I'm not sure people necessarily even know what they mean.

GK: Sure.

SG: What would be your, in your perfect world, your type of health care program that you would implement?

GK: Yeah. Sure, there are lots of different varieties.

SG: There’s so many different, yeah, varieties.

GK: Yeah. But, the one commonality is that all these other countries, essentially every other country with the exception of one or two, is to figure out how to provide health insurance to everybody. And whether there’s lots of different varieties of what this national health insurance might look like and how it’s structured, and not all of it’s provided by the government. But anyway, I'll come back to that. So you know, public option single-payer Medicare for all, I think what you’re seeing is we’re seeing in Congress and in the elections the conservative backlash to Obamacare. On the other side what you're seeing is the liberal backlash to Obamacare. And that’s what I think the Bernie Sanders campaign, presidential campaign identified, that there are a lot of people on the left who were dissatisfied with Obamacare because they felt that it was too much of a compromise, and it was, the words that I've heard used is ‘sellout’, a sellout to the insurance industry. And that really what we should have done is we should have expanded either the medicare program or some sort of public option. Now the question is: What does the public option really look like? In the original design for Obamacare, in the house version which never got anywhere, there was a public option that within each exchange there would be an option to buy into— basically to buy into Medicare.

SG: Gotcha.

GK: Another version of the public option was recently discussed and rejected, but at least it was discussed and put forward as an option in Nevada, which was to allow people to pay to get into the state Medicaid program. So basically the idea is that rather than buying insurance from on the market, you expand existing public programs to allow people to join them, even though they don’t currently meet the eligibility criteria. So you know, like Medicare. Medicare, you can’t just join Medicare. You either have to become disabled, that’s one way you can join before age 65, or have a horrible disease like ALS or kidney failure. And those are the ways you can join before age 65. You know, Hillary Clinton was talking about opening up medicare to people after age 55, but they would have— they could buy into it. But rather than buy insurance provided by the insurance company you’d be buying Medicare, and you’d be a Medicare recipient. So the public option’s one way to do it. And you know, single-payer systems and Medicare for All, which was what the Sanders campaign used to sell the idea, seems to have a lot of appeal. You know, he’s got a lot of support in the 2016 campaign.

SG: Yeah, and now you have Senators like Jeff Merkley who are coming out in favor of it. 

GK: Yeah. So you know, that single payer idea, there are lots and lots of different ways to do it. And that’s part of the irony here, is that one of the ways that countries like the Netherlands and Switzerland do their government insurance is they basically have an Obamacare-like system for everybody. But it’s for everybody, it’s not for 3 percent of the population. So they have, you know, mandates. You have to have insurance. They subsidize insurance for people who are below a certain income level. Private companies offer the insurance, but things are regulated. So what doctors and hospitals are paid is regulated by the government.

SG: Oh, interesting.

GK: So that helps keep the cost of insurance down, because you’re not just paying doctors and hospitals whatever you can negotiate. The government says ‘No, this is what you’re going to get paid from an insurance company.’ In Israel, they have four HMOs that compete against each other, and everybody is entitled to join one of the four HMOs. And then you can buy private insurance insurance on top of your HMO government coverage.

SG: Very interesting.

GK: There are lots of different ways to do it. Canada is another model. Most people think of Canada or England and point out the flaws in those two systems, and say ‘That’s why we can’t have it here.’ But as I’ve been telling people for the last few months, we can have the system that we want. It’s up to us. We don’t have to adopt somebody else’s system, let’s figure out what makes it work here so that everybody’s covered. So to answer your question what would I do, I would take— I mean, one thing is to say we’ll start from scratch because that’s difficult to do. We have 200-some years of history in this country, that even though we haven’t had health insurance for 200-some years, we’ve only had health insurance for 100-something years. Actually that’s not true. About 90 years we’ve had health insurance in the United States. First policy was in 1929. But I think that the next step that we could take that would work in this country would be to say ‘Let’s figure out a way to cover people who are the most expensive. And but rather than label individual people, let’s try to figure out how to cover the most expensive things that we do to treat people. And one of the most expensive things we do is when somebody goes into the hospital. And so I would say that we could start with a national system of guaranteeing that everybody has access to hospital care, and that would be Medicare for All, but it would be technically Medicare part A. It’s the hospital insurance piece of Medicare. That’s the piece that when you look at your paycheck and you see the deduction for Medicare on your paycheck, that’s what you’re paying for. You’re paying for hospital care for your—well, what you’re doing technically is you’re paying for your grandparents if they’re on Medicare. You’re paying for their hospital care. I’m paying for my mother’s hospital care.

SG: That’s great.

GK: But the idea is that when I’m 65, which is a few years away, then I'm going to be covered because I've been paid into the system since I was 16. And I get my statement from Social Security. And I had a summer job when I was 16 that paid me $500 or $600. And it shows how much I paid into Medicare that year. And it was $40 or something that summer. But that was my first contribution, and it shows every year how much I paid into the system. And at this point it’s about $200,000 I think. And all it would take is one hospitalization for that to pay for itself.

SG: Yeah.

GK: And hopefully I won’t have that, but you know, that’s the point. That’s the way Medicare hospital benefit works. And I think we could open that up to everybody, to guarantee that everybody has their hospital care treated. And then you buy insurance to cover your non-hospital expenses. And the people that I've talked to about this idea say, ‘Well, the other thing though that you have to recognize is that it wasn’t true when Medicare was created in 1965, but is certainly true today, the second —and in some cases the most expensive- healthcare cost or expense that people have have, would be a drug that they need.’ So if you have hepatitis C and you need one of the drugs to cure that, that’s as expensive as a hospitalization. So I think my proposal would have to be modified to say yeah, hospital care but also anything that crosses a certain dollar threshold. So let’s make sure everybody’s hospital care is covered, and anybody who has the medical expense of more than —I’m going to pick a number out of my hat. $50,000 in a year, that would be covered by the government program.

SG: So this is so interesting. This is great. This is— Because yeah, I will be totally honest. My grandmother was hospitalized last week, and every time I've gone to visit her, I've been thinking, oh my goodness, this must be so expensive.

GK: And it is.

SG: And it is. And I had never really connected the dots to the fact that yeah, there is this little bit of my paycheck that comes out and it goes towards that. And she was a nurse for 40 years, and a little bit of her paycheck went out and went into this pot as well, so yeah.

GK: Yeah. 1.45 percent every paycheck, that’s what goes into that. And you can double-check that. It’s 1.45 percent. And your employer contributes 1.45 percent, so it’s a total of 2.9 percent of what you’re being paid is being paid into the trust fund. And that money you know, it doesn't— It’s not an IRA. It’s not a savings account for you. It goes and pays for current people. Like your grandmother, and my mother was in the hospital last October. But what it means is that my mother’s health is not bankrupting me. She’s taken care of because she paid into that system for 30 years. And when I qualify, if I get sick I’m not going to bankrupt my daughter because I paid into the system. And I think that that’s— we can expand that idea to include everybody. Maybe not every healthcare service or every healthcare treatment right away, but we could start with the most expensive things that are likely to bankrupt people.

SG: That’s smart.

GK: Yeah. I like the idea too, and I think that it can gain traction. And you could pay for it with payroll taxes, and maybe with a sales tax, but it would reduce insurance premiums that people buy on their own, or the insurance premiums that employers pay, because you’d be taking a big chunk of the expense out of the insurance market. And you’d be seeing now everybody’s getting coverage for this separately. In order to pay for it, we’ve got to charge more than that 1.5 percent, it’ll have to go to 4 percent. But you’re paying for it in your paycheck. It’s no longer part of the premium that your employer pays, or that you helped to pay. So that part would go down. So basically, it’s like swapping one for the other.

SG: Yeah, a shifting of what kind of comes out of your paycheck.

GK: The private insurance premium goes down, but your payroll tax goes up, or maybe the tax that you pay. If we finance it partially with a sales tax, now you’re paying an extra penny for every dollar at the store, but that’s helping to pay for everybody’s hospital care. 

What also makes Medicare work really well is that we do pay, almost all of us pay into it during the course of our life. And if you haven’t paid into it, you wouldn’t be able to qualify for it. Or if you’re not dependent, meaning a spouse or a former spouse, you know because people do get divorced. So there are people who haven’t worked but they’ve been married to somebody who worked for the minimum number of years. You have to work at least 10 years to qualify for Medicare, or have been married to somebody who worked for 10 years. And what we see is that almost 99 percent of people age 65 have either qualified for Medicare, or a couple percent qualify for programs that predated Medicare, back— you know, these are people who worked for state government for example. For years, state government had their own retirement systems, they were— if you worked for a state government, you didn’t pay into Medicare and the state would take care of you. But the point is that the number of people aged 65 who don’t have insurance in this country is minimal. It’s miniscule. It’s not zero, but it’s as close to zero as you can get. That’s because over the course of our lifetime, everybody works enough to pay into the system to qualify for it one way or the other. And that’s the beauty of it. And as a result, you don’t see people squabbling and saying ’Wait a minute, you don’t deserve Medicare. I paid into it, you didn’t do anything.’ You don’t see those arguments. You don’t see people fighting about whether they deserve it or not, because there’s this sense that everybody’s paid into it, so of course we deserve it.

SG: But we also hear about, okay Obamacare itself, it’s not perfect. You know, you do see some states where people are left— people in the exchanges are left with just one insurance option. What, if we were to make very slow incremental changes, you have any ideas of like Obamacare fixes that you think would work better than, let’s say, a repeal and replace?

GK: Yeah. But they would require— there are ideas that Republicans at this point are not going to agree to whatsoever. I mean their intent on ripping this down and —you know, they basically want to dismantle the, they want to blow up the building and start over. And I’m not sure that they really do want to start over, I think they just want to blow up the building. I mean I'm genuinely convinced that that’s what they want. They’re not really interested in stabilizing insurance markets or expanding the Medicaid programs. I think what they’re most interested in is shrinking government. And this was the— It’s easier. You have to realize the historical context here. And you’re way too young to know this, but you know I actually saw it as a kid and as a teenager, that when Medicare was enacted, there was still this kind of Republican opposition to Medicare. This was socialized medicine. This was government takeover of the healthcare system. But it was doctors and hospitals who were convinced that it would benefit them. And then once people started receiving benefits and saw how the program worked, this kind of political opposition went by the wayside. But you had members of Congress saying the same things they say about Obamacare about Medicare. ‘This is the wrong thing for the country to do. This is— The government is getting in between doctors and their patients, and government should not be in the business of healthcare.’ And today this program, we won’t call it sacrosanct, because I know that the Republicans want to do— want to shrink Medicare as well. Especially Paul Ryan, who is intent on changing Medicare.

SG: Yes.

GK: But even Paul Ryan would not say that we need to get rid of Medicare.

SG: Yeah. Well I mean, it’s mostly older people who vote.

GK: Even he’s smart enough politically— Yeah, he’s smart enough to know politically that’s not, that’s a completely dead-on-arrival idea. But the next best thing from a conservative or a Republican perspective is well, okay. So you can’t get rid of Medicare now, it’s entrenched. Millions of people have benefited from it, we know it works. But we can shrink it, or we can— because shrinking government spending is always the underlying principle that guides Republican thinking. And so yeah, you can’t get rid of this program. It’s not feasible to do it politically. But we can do something to keep it from being so big. So we’ll convert it to a voucher program and then say that vouchers are going to grow at a relatively, at a rate that’s less than medical costs. So the voucher gets smaller over time.

SG: So then another question I have for you is: We just talked about how it would be difficult to completely scrap Medicare, that even Paul Ryan would know that, you know, it’s helped other people. In this repeal and replace effort, it’s ultimately going to be taking away a benefit that a lot of people have received. Do you, I guess—

GK: Yeah, so the key question you have to answer is: Who’s losing the most? Again, it gets back to the program has helped people in two different ways. One is through the Medicaid expansion, and one is through the subsidies in the exchanges, mostly for lower-income people. But not completely poor, more low-income to middle-income. So the poor people, Republicans I can say confidently, they just don’t care. In fact, the number of hostile statements that I've seen from Republican politicians about poor people makes it abundantly clear that they don’t really care if poor people lose their health insurance.their solution or their response is, nobody deserves health care for nothing. If people are sick, it’s because they’re not taking care of themselves. And if you got a better job, you’d get health insurance benefits through your place of employment.

SG: A personal responsibility/bootstraps argument.

GK: Exactly, yeah. So that’s— they just don’t care about that portion of the population. Now, there are a lot of people in sort of that low-income to middle-income are getting subsidies who are going to lose out. And they are somewhat concerned about that group. So you know, that’s why they’re trying to say, ‘Well look. We’ll give states the option to create risk pools and then you can push people who are sick into the high-risk pool, and then everybody else’s premiums will be lower. So we’re not taking your insurance away, we’re just going to go back to the old market rules, or at least give states the option to adopt the old way of doing things. And if you live in one of those states, your premiums could go down if you’re lucky enough to be relatively healthy and never had a pre existing condition. You premiums will go down, and the sick people would be shunted off into the high-risk pool. And you know, hopefully you’re not one of them. And if you are, it’s Obama’s fault anyway. So don’t blame us.’

SG: So my next question is— And I know that this is really looking into a crystal ball, but because you know, I think that a lot of people who have been following this this week were sort of breathing a sigh of relief, like okay this looks dead for now. But it could rise from the ashes at any time. Do you think it will pass?

GK: I think so. They’re calling it ‘the zombie bill’. They’re calling it ‘the zombie bill,’ and I didn’t get that at first. But then I realized oh of course, it’s because it’s not dying. It’s the undead bill. So I don’t know. I honestly, I'm so perplexed by what’s going on. The part of me that wants this to die is hoping that they’re going to run out of patience and say, ‘Look, we just can’t do it now.’

SG: ‘We can’t do it right now, let’s move on to tax reform or something.’

GK: Yeah, move on to the next thing and— that we can do.’ I don’t know. What I— The reason I just feel that there’s no way forward, despite Trump’s telling them earlier that —or yesterday- that ‘All right, well we’re going to lock you in a room and we're not going to let you out until you come to a decision.‘ It’s like a hung jury, right? ‘Go back and, you know, it’s unacceptable that you haven’t reached a verdict, so we’re going to lock you in a room until you do.’ The problem is I can’t see how you reconcile the two sort of wings of the senate that disagree with each other. So if you try to satisfy Rand Paul, you guarantee that you’re going to lose three or four on the other side. So just the pure numbers, I would say you just write off Rand Paul and say he’s extreme, and he’s only going to— there aren’t other people who are going to join him.

So you have to try to reach Lisa Murkowski and Senator Collins and you know, those few that are moderates. And the senator from Utah and the senator from Nevada. And the senator from Kansas. So what can you do to reach them? Well I tell you, I think they could say ‘Look, we’re not going to blow up the markets. We’re going to make the subsidies even more —try to make them even more generous. We’ll do—’ In other words, not really dismantle Obamacare as much. And they’re still going to cap Medicaid, because again, I don’t think the Republicans care about losing people who are on Medicaid. I think they believe that those are mostly democratic votes anyway, so if 13 or 14 million low-income Democrats lose their health insurance, they don’t give a damn.

Gerald Kominski: I’m Gerald Kominski. I’m a professor at the UCLA Fielding School of Public Health, and I am director of the UCLA Center for Health Policy Research.

Sarah Gray: Great. Okay, so our readers might not be following all the blocking and tackling of the health care bills and debate. If you could just explain where we are now—everything from, first the collapse of voting on the Better Care and Reconciliation Act. Then, voting on a repeal only without a replacement, and a meeting between President Trump and Senate Republicans last week.

GK: Yeah. Daily. It’s shifting daily, and the messages are changing hourly. So I don’t have any inside information other than what I see reported. So the latest report is that the president's asking or insisting that the senate come up with a compromised bill before they break for recess in a couple weeks.

SG: Yes. And we also had the release of the Congressional Budget Office’s report which said that there would be 17 million losing insurance next year if there is just a repeal without a replacement, and 32 by 2026. These numbers seem very big, but also very abstract at the same time. Do you want to break down who exactly would be losing their insurance?

GK: Well, the people who will be losing will be largely people who gained insurance over the course of the last four years under the Affordable Care Act, and so that would include people who buy insurance on their own in the exchanges, what’s known as the individual markets. So these are people who don’t get health insurance through their own employer. They’re not poor, they’re low-income or middle-income. They buy insurance on their own. But many of them were able to afford it previously, because unlike employment-based insurance where typically an employer will pay somewhere around 75 percent or 80 percent of the cost, when you buy insurance on your own in the marketplace, you’re paying 100 percent of the cost on your own. And so what the Affordable Care Act did is it made subsidies available to people between certain income ranges or within a certain income range, to buy insurance. And that has benefited —there are about 12 million people nationally who are buying insurance through the exchanges, and the estimate is that roughly 55 percent or 60 percent of those people previously did not have health insurance. That’s one group.

The second group are people who are below a certain poverty level, and they’ve benefited from what’s known as the Medicaid Expansion. And in California the Medicaid program is called Medi-Cal, and many states, they have their own name for their Medicaid program. But the Affordable Care Act provided an opportunity for states to expand their programs. And this has benefited roughly 14 million people nationally, and the vast of whom were previously uninsured because they were low-income.

So, and then the third mechanism, I tend to forget this myself, but there’s a third important mechanism, and that is adult children who don’t have insurance on their own can stay on their parents’ policies up until age 26. And that’s actually about 3 million people who have benefited from that. So there’s three groups that have benefited primarily as a result of the Affordable Care Act.

SG: There are other aspects of the Affordable Care Act that maybe we forget—including things like covering people with pre-existing conditions or the birth control mandate.

So I wanted to ask—so people might think to themselves, ‘Okay well, a repeal of Obamacare without a replacement. That just means we go back to how it was before Obamacare. I was in the workforce before Obamacare went into place, so how does this impact me if this is repealed?’

GK: Sure. Well, there are— first of all, the insurance market protections that were enacted as part of the Affordable Care Act, Republicans can’t repeal those because the mechanism that they’re using, or trying to use I should say, is known as budget reconciliation. And it’s a technicality. It’s a way that the Senate in particular does business. But what it means is that the Senate has something known as the filibuster rule. And generally, you can’t pass a bill through the Senate unless you can bring what's known as closure—or they call it cloture specifically—to a discussion on a bill. And you need 60 votes to do that. If you can’t bring the discussion to a close with 60 votes, then the bill doesn't move forward. So the senate doesn't have 60 votes to repeal Obamacare. So what they’re doing is using another, a technical aspect that allows them with a simple majority of 51 votes, or 50 and then—

SG: And then Mike Pence.

GK: —the tiebreaker would be, yeah, the vice president. So a simple majority. And you can pass legislation, but the requirement is that the legislation deals solely with budgetary issues. In other words, it doesn't really change an existing law. What it does is it changes the funding under an interesting law. And that’s what they’re calling repeal. They’re saying, ‘We’re going to basically turn off the funding for most of Obamacare, and then we’re gonna make some other changes that permit states the option to bypass Obamacare regulations.’ And so that is the mechanism that they’re trying to use to quote-unquote repeal the law. It’s not really a true repeal, but by turning off most of the funding mechanisms, it’s damaging.

SG: Yeah. So that was actually going to be another question I was going to have to you, the president has tweeted about this—that even if there isn’t a repeal, that there are steps that could be taken to undermine Obamacare, otherwise known as the ACA, without passing any sort of legislation.

GK: Correct.

SG: So I know that earlier this year, they stopped— or the Trump administration stopped doing any sort of advertisements encouraging people to sign up, and that hurts— that makes the pool smaller, and you know—

GK: Yeah, it doesn't look like it affected this year, but with all of the ongoing publicity about the repeal efforts, it sends the message that the markets might not be around or they might not be stable or things might not work so smoothly. And so we have another— you know, every year there’s an open enrollment season. There’ll be one this fall. And entering the next enrollment season, with all of the drama that’s been going on, it might scare people out of the market. And it’s certainly scaring insurers out of the market. Insurers are dropping out of markets around the country.

The president actually has two mechanisms at his disposal that he doesn't need Congress to do damage. He can damage Obamacare two ways. One is he can say —and he’s already basically said this—that we’re not gonna enforce what’s known as the individual mandate. It’s the requirement in the law that if you either show that you have insurance, or—

SG: Where you have to pay a tax, right?

GK: You pay a tax. And the first two years of the program, the tax is relatively small. So people chose to pay the tax. The tax has gotten larger and now is $695 a year for an individual, and up to $2,085 dollars for a family. So now the penalty is bigger, and if the president is saying ‘We’re not gonna collect this tax. I’m going to authorize the IRS to not try to collect this tax from people who don’t pay it.’

Then it might push, you know, especially younger healthier people out of the market and say ‘Well, I don’t have to pay a penalty. Maybe I’ll just— And the insurance company has to offer me insurance when I do get sick or if I change my mind later. So maybe I'll just put that money in my pocket for a while. I don’t go to the doctor that often, and I'm pretty healthy.’ And it may not just be young people who do that. I've met plenty of people who are approaching Medicare eligibility in their late 50s and early 60s who say ‘I’ve never been seriously ill a day in my life. I don’t really know why I need health insurance.’

The second thing he has, and this is in a sense even more powerful. Right now, the government subsidizes insurance policies for people at the bottom—not Medicaid eligibility, but within the marketplaces like Covered California. They subsidize people at the lower end of the income scale to reduce their co-payments and their deductibles, but only if they choose what’s known as the Silver Plan. And right now, the two thirds of people in California and nationally overall buy the Silver Plans and it’s mostly because of these additional reductions in their out-of-pocket costs. Well, the president has the authority to stop making those payments because they’re being challenged legally, and there’s some uncertainty about whether or not they were.. Their legality, let me put it that way. The original law was vague about the authorization of these additional payments. So even though they’ve been made, Congress sued President Obama to say that they were illegal. And even though President Trump has continued to authorize them, he has the authority to say ‘Look, we’re going to stop making these payments.’

SG: Wow, okay.

GK: And if that happens, that’s going to drive a lot of other people out of the market because they’re lower income to begin with, and then it’s going to—their insurance is going to cost more, and they’re going to have higher out-of-pocket costs.

SG: And if there isn’t a mandate, then there’s no penalty for even not paying the higher out-of-pocket cost. So I think that the big thing that people may not understand is like, if the maybe the healthier people who decide not to buy insurance, then you’re left with a pool of people who are sick. And that— does that drive up— that drives up costs, right?

GK: That’s, yes. That’s exactly right. That’s the way insurance works.

SG: Insurance companies would not want to participate in the program?

GK: Well, they either—insurance companies are not charities, even if they’re organized as a nonprofit company, they still don’t want to lose money. And so they charge a premium that’s intended to cover their costs as well, meaning how much they have to pay for the medical benefits of the people that they’re covering as well as to cover their costs of doing business. And so if they have a sicker or higher-cost mix of people who are buying their policies because lower-cost people decided they’re going to drop out of the market, they’re not going to just eat that cost, they’re going to capture it by charging higher premiums to people who are still buying the policies.

SG: Gotcha.

GK: And by increasing the premiums, it will drive some more people out of the market because now, some people say ‘Wait a minute. I could afford $300 a month, but I can’t afford $350 a month,’ or ‘I can’t afford $400 a month.’ And then you get into a little bit of a spiral.

SG: So what happens with that spiral? Does that mean more people are just showing up to hospitals, if fewer people can afford insurance?

GK: No, it’s not that more people are showing up. What it means is that the pool of people in the insurance market are just the people who are sicker, and the high-users of healthcare. People with chronic illnesses, people who have to go to the doctor on a regular basis, people who have high-cost medications to manage their health.

SG: But what if those people can’t pay anymore? Will they, is that sort of where the healthcare bankrupting people comes in? Or just stopping to—

GK: Yes, that’s one reason for bankruptcy. And then the other is that if you become uninsured but you have regular medical expenses, that’s when you depend on public hospitals and public clinics. And there are community health centers all over the country that serve people regardless of their ability to pay. But it means that, you know, if you’re one of those people it means if you go from being insured and being able to go to let’s say go to see the doctors at UCLA hospital, because they’ll ask before they make an appointment, ‘What insurance do you have?’ And you say, ‘Well, I don’t have insurance.’ And they’ll say, ‘Well sorry, we can’t see you.' So you know, ‘There’s a free clinic in Venice. Maybe you should go there.’ Now if you’re hit on the street and UCLA is the nearest hospital, by law they have to take you regardless of whether you have insurance or not, if you have a life-threatening injury. But not everybody who goes to the hospital is in immediate danger of dying. And if you're not in immediate danger of dying, they can turn you away if you don’t have insurance.

SG: Wow. Yeah, these are all things that I guess as a person who has always had employer insurance or school health insurance, I'd never thought about.

GK: I agree. And I’m in the same situation. I’m nearing Medicare eligibility in a few years, and I think about the consequences that these decisions have on people’s lives. I’ve had a preexisting condition since I was seven years old. And if I had to buy insurance at any point in my life on my own, if I hadn't worked for a company that provided insurance, I would’ve had a really hard time and I would have been turned down because of the preexisting condition. And it’s nothing that I have any control over. It’s a genetic birth defect that doesn't necessarily result in high medical expenses, but it could. And I have to claim it when I apply for insurance. I’ve always put it down on my applications, and I haven’t had any complications over the course of my life except when it was discovered initially when I was seven. But the point is is that if I were in a different line of work, I could’ve been uninsured.

SG: So that actually brings me to another question I was going to have. Because with Obamacare, there— and correct me if I'm wrong, but from my understanding, it meant that people who did have preexisting conditions couldn't be turned down for health insurance.

GK: Correct.

SG: And with a repeal, that would mean again, we have people who have preexisting conditions who might not be able to be insured. And I mean, I was shocked to learn all the different things that count as preexisting conditions, and suddenly being like oh wow, I’ve seen a therapist before. Mental health can be a preexisting condition. Or you know, I’m a woman. If I were to get pregnant, that could also be one.

GK: Correct.

SG: What is the overall impact on a repeal for this issue? And if there’re any preexisting conditions that you know off the top of your head, that a lot of people are not aware of?

GK: Well, I’m not sure that I can answer the preexisting conditions that people aren’t aware of, but you mentioned a few. And you know, pregnancy can be considered a preexisting condition. So that immediately creates a bias, a gender bias that seems completely unfair. But any number of things, including childhood diabetes, certainly adult onset diabetes, hypertension, I mean any number of things that people have can put you into a preexisting condition category, and as a result can potentially— Now, it’s not automatic, if there was a repeal of Obamacare through the mechanisms that we talked about, that states would automatically go back to the old way of doing things. Because again, those provisions are still in the law. What the Republicans would do is they have to pass a new law that gives states the opportunity or the option of bypassing the Obamacare insurance market regulations.

SG: And that was attempted in the AHCA, correct? With the waivers?

GK: Yeah, and also the BCRA as well. And this is one of the points of contention, because at least some Republican senators don’t want that to happen. They don’t want other things in the bill as well, but this is where the Republicans themselves can’t agree what should be in the bill.

You’ve got Rand Paul on the one extreme who said, ‘I don’t want any replacement. I just want us to get rid of Obamacare, because it’s too much regulation, and the government should not be regulating health insurance markets. Markets function fine on their own.’ Now he’s wrong, but that’s his belief. So he doesn't want any replacement. And then you’ve got on the other end, you’ve got Senators Murkowski and Collins who are saying, ‘Repealing without an adequate replacement just hurts the people of my state as well as people all over the country, and I can’t vote in favor of that. That doesn't make sense, to take away people’s health insurance in my state for no good reason.’

GK: You know, this is a country of about 320 million people. And 160 million, roughly 165 million get health insurance through their place of employment or they’re dependent on somebody who has employment-based insurance. Another 55 million have Medicare. Another 70 million have Medicaid. And so people in the exchanges are, there are about 12 million people in the exchanges across the entire country. And 12 million is about 3 percent of the population. And yet, for eight years it’s Obamacare, Obamacare, Obamacare.

SG: Yeah.

GK: It’s 3 percent of the population. And I’m not saying that we should not pay attention, but you know, those exchanges and the premiums in those exchanges are one piece. I talked before about the Medicaid expansion, that’s even a bigger piece. It’s been about 14 million people. But Medicaid was a big program before Obamacare. It was roughly 55 million people, almost as much as Medicare. Now it’s grown to over 70 million people. So there’s all this media, and it’s on the news every night and it’s on the talk shows every night. And I'm on the phone all day long talking about health insurance coverage for or premiums that affect 3 percent of the US population.

I’ll tell you, there’s an organization, just FYI for background information, you should be aware of if you’re not already, it’s called the Kaiser Family Foundation.

SG: Yes.

GK: Yeah, kff.org. So you already know about them. So one of the things they do is they do public opinion polling monthly on issues related to people’s attitudes about healthcare and healthcare reform and all kinds of different and interesting topics. And I use their polls and their slides in a lot of the talks that I give to students and to the public audiences. They ask people: Where do you think the majority of people get their health insurance? And 30 percent of people who responded to the question said through the Obamacare exchanges.

SG: Wow.

GK: And I thought ‘Wow. 30 percent of people think that that’s where the majority of Americans get their health insurance.’ Well, not only is it wrong, but it also makes sense to me that people would be confused and think ‘Well of course that’s where people get their health insurance, because it’s been in the news constantly for eight years.’ It must be affecting at least 150 million people, and maybe 200 million people. No, it’s affecting 12 million people.

SG: Wow, yeah.

GK: But we’re fighting. We’re fighting over it. We’re almost you know, at the point of going we’re having the equivalent of a nonviolent civil war over Obamacare.

SG: Yeah. I mean, this is—I mean, we’ve had the 2010—

GK: Talk about losing perspective.

SG: Yeah, the 2010, the 2012 and the 2016 elections have all seemed like referendums on it.

GK: And we’ve had two major Supreme Court cases that were referendums on it. And there may be another one coming down the pipe, and yeah. No, it’s a remarkable sample of case study of a law representing something way, way bigger than what it actually in reality is affecting. In other words, it is tapping into deeper emotions and deeper principles that have nothing to do with the number of people who are impacted.

SG: A much deeper anxiety about health care and the fate of it in this country, I think.

GK: Well, and I think for Republicans the reason there’s a bloodbath about this is that I think that they feel they drew a line in the sand 20 years ago under Clinton administration when they were able to dismantle welfare and turn it into a block ramp program that’s been basically frozen for 20 years. And I think they not only celebrated that victory, but said ‘Never again will we allow a government program to benefit mostly poor people, because we were able to, after 60 years, because Aid to Families with Dependent Children was passed by FDR in 1935. You know, it took us 60 years to get rid of it, but never again will we allow an expansion of government programs targeted to just help poor people.’

SG: So is this a deeper anxiety about spending as a whole? Or do you think specifically spending on poor people?

GK: Yeah, spending and big government.

SG: And big government, yeah.

GK: And spending on poor people. All of those things wrapped up together.

Because I see [health care and welfare] all as being— it’s all linked in terms of why this is such a bloody battle, and why the intensity of the effort to get rid of Obamacare, why is it so intense. Because there’s a bigger principal I think at stake for Republicans and for conservatives that this was an attempt to go back to increasing the role of government, increasing spending, and specifically targeting benefits mostly at people at the bottom of the income scale. And for all those reasons. Any one of them alone would be reason to fight it, but when you put them all together, it makes—I think it helps explain some of the intensity of the battle.

SG: So right now obviously we’re talking a lot about health care and we’re getting down to even just the general philosophies of the different parties. And I think on the left right now there’s a shift now and you hear the terms ‘public option,’ you hear the term ‘single payer’ thrown around. They seem to be buzzwords that I'm not sure people necessarily even know what they mean.

GK: Sure.

SG: What would be your, in your perfect world, your type of health care program that you would implement?

GK: Yeah. Sure, there are lots of different varieties.

SG: There’s so many different, yeah, varieties.

GK: Yeah. But, the one commonality is that all these other countries, essentially every other country with the exception of one or two, is to figure out how to provide health insurance to everybody. And whether there’s lots of different varieties of what this national health insurance might look like and how it’s structured, and not all of it’s provided by the government. But anyway, I'll come back to that. So you know, public option single-payer Medicare for all, I think what you’re seeing is we’re seeing in Congress and in the elections the conservative backlash to Obamacare. On the other side what you're seeing is the liberal backlash to Obamacare. And that’s what I think the Bernie Sanders campaign, presidential campaign identified, that there are a lot of people on the left who were dissatisfied with Obamacare because they felt that it was too much of a compromise, and it was, the words that I've heard used is ‘sellout’, a sellout to the insurance industry. And that really what we should have done is we should have expanded either the medicare program or some sort of public option. Now the question is: What does the public option really look like? In the original design for Obamacare, in the house version which never got anywhere, there was a public option that within each exchange there would be an option to buy into— basically to buy into Medicare.

SG: Gotcha.

GK: Another version of the public option was recently discussed and rejected, but at least it was discussed and put forward as an option in Nevada, which was to allow people to pay to get into the state Medicaid program. So basically the idea is that rather than buying insurance from on the market, you expand existing public programs to allow people to join them, even though they don’t currently meet the eligibility criteria. So you know, like Medicare. Medicare, you can’t just join Medicare. You either have to become disabled, that’s one way you can join before age 65, or have a horrible disease like ALS or kidney failure. And those are the ways you can join before age 65. You know, Hillary Clinton was talking about opening up medicare to people after age 55, but they would have— they could buy into it. But rather than buy insurance provided by the insurance company you’d be buying Medicare, and you’d be a Medicare recipient. So the public option’s one way to do it. And you know, single-payer systems and Medicare for All, which was what the Sanders campaign used to sell the idea, seems to have a lot of appeal. You know, he’s got a lot of support in the 2016 campaign.

SG: Yeah, and now you have Senators like Jeff Merkley who are coming out in favor of it. 

GK: Yeah. So you know, that single payer idea, there are lots and lots of different ways to do it. And that’s part of the irony here, is that one of the ways that countries like the Netherlands and Switzerland do their government insurance is they basically have an Obamacare-like system for everybody. But it’s for everybody, it’s not for 3 percent of the population. So they have, you know, mandates. You have to have insurance. They subsidize insurance for people who are below a certain income level. Private companies offer the insurance, but things are regulated. So what doctors and hospitals are paid is regulated by the government.

SG: Oh, interesting.

GK: So that helps keep the cost of insurance down, because you’re not just paying doctors and hospitals whatever you can negotiate. The government says ‘No, this is what you’re gonna get paid from an insurance company.’ In Israel, they have four HMOs that compete against each other, and everybody is entitled to join one of the four HMOs. And then you can buy private insurance insurance on top of your HMO government coverage.

SG: Very interesting.

GK: There are lots of different ways to do it. Canada is another model. Most people think of Canada or England and point out the flaws in those two systems, and say ‘That’s why we can’t have it here.’ But as I’ve been telling people for the last few months, we can have the system that we want. It’s up to us. We don’t have to adopt somebody else’s system, let’s figure out what makes it work here so that everybody’s covered. So to answer your question what would I do, I would take— I mean, one thing is to say we’ll start from scratch because that’s difficult to do. We have 200-some years of history in this country, that even though we haven’t had health insurance for 200-some years, we’ve only had health insurance for 100-something years. Actually that’s not true. About 90 years we’ve had health insurance in the United States. First policy was in 1929. But I think that the next step that we could take that would work in this country would be to say ‘Let’s figure out a way to cover people who are the most expensive. And but rather than label individual people, let’s try to figure out how to cover the most expensive things that we do to treat people. And one of the most expensive things we do is when somebody goes into the hospital. And so I would say that we could start with a national system of guaranteeing that everybody has access to hospital care, and that would be Medicare for All, but it would be technically Medicare part A. It’s the hospital insurance piece of Medicare. That’s the piece that when you look at your paycheck and you see the deduction for Medicare on your paycheck, that’s what you’re paying for. You’re paying for hospital care for your— Well, what you’re doing technically is you’re paying for your grandparents if they’re on Medicare. You’re paying for their hospital care. I’m paying for my mother’s hospital care.

SG: That’s great.

GK: But the idea is that when I’m 65, which is a few years away, then I'm gonna be covered because I've been paid into the system since I was 16. And I get my statement from Social Security. And I had a summer job when I was 16 that paid me $500 or $600. And it shows how much I paid into Medicare that year. And it was $40 or something that summer. But that was my first contribution, and it shows every year how much I paid into the system. And at this point it’s about $200,000 I think. And all it would take is one hospitalization for that to pay for itself.

SG: Yeah.

GK: And hopefully I won’t have that, but you know, that’s the point. That’s the way Medicare hospital benefit works. And I think we could open that up to everybody, to guarantee that everybody has their hospital care treated. And then you buy insurance to cover your non-hospital expenses. And the people that I've talked to about this idea say, ‘Well, the other thing though that you have to recognize is that it wasn’t true when Medicare was created in 1965, but is certainly true today, the second —and in some cases the most expensive- healthcare cost or expense that people have have, would be a drug that they need.’ So if you have hepatitis C and you need one of the drugs to cure that, that’s as expensive as a hospitalization. So I think my proposal would have to be modified to say yeah, hospital care but also anything that crosses a certain dollar threshold. So let’s make sure everybody’s hospital care is covered, and anybody who has the medical expense of more than —I’m gonna pick a number out of my hat. $50,000 in a year, that would be covered by the government program.

SG: So this is so interesting. This is great. This is— Because yeah, I will be totally honest. My grandmother was hospitalized last week, and every time I've gone to visit her, I've been thinking, oh my goodness, this must be so expensive.

GK: And it is.

SG: And it is. And I had never really connected the dots to the fact that yeah, there is this little bit of my paycheck that comes out and it goes towards that. And she was a nurse for 40 years, and a little bit of her paycheck went out and went into this pot as well, so yeah.

GK: Yeah. 1.45 percent every paycheck, that’s what goes into that. And you can double-check that. It’s 1.45 percent. And your employer contributes 1.45 percent, so it’s a total of 2.9 percent of what you’re being paid is being paid into the trust fund. And that money you know, it doesn't— It’s not an IRA. It’s not a savings account for you. It goes and pays for current people. Like your grandmother, and my mother was in the hospital last October. But what it means is that my mother’s health is not bankrupting me. She’s taken care of because she paid into that system for 30 years. And when I qualify, if I get sick I’m not gonna bankrupt my daughter because I paid into the system. And I think that that’s— we can expand that idea to include everybody. Maybe not every healthcare service or every healthcare treatment right away, but we could start with the most expensive things that are likely to bankrupt people.

SG: That’s smart.

GK: Yeah. I like the idea too, and I think that it can gain traction. And you could pay for it with payroll taxes, and maybe with a sales tax, but it would reduce insurance premiums that people buy on their own, or the insurance premiums that employers pay, because you’d be taking a big chunk of the expense out of the insurance market. And you’d be seeing now everybody’s getting coverage for this separately. In order to pay for it, we’ve got to charge more than that 1.5 percent, it’ll have to go to 4 percent. But you’re paying for it in your paycheck. It’s no longer part of the premium that your employer pays, or that you helped to pay. So that part would go down. So basically, it’s like swapping one for the other.

SG: Yeah, a shifting of what kind of comes out of your paycheck.

GK: The private insurance premium goes down, but your payroll tax goes up, or maybe the tax that you pay. If we finance it partially with a sales tax, now you’re paying an extra penny for every dollar at the store, but that’s helping to pay for everybody’s hospital care. 

What also makes Medicare work really well is that we do pay, almost all of us pay into it during the course of our life. And if you haven’t paid into it, you wouldn’t be able to qualify for it. Or if you’re not dependent, meaning a spouse or a former spouse, you know because people do get divorced. So there are people who haven’t worked but they’ve been married to somebody who worked for the minimum number of years. You have to work at least 10 years to qualify for Medicare, or have been married to somebody who worked for 10 years. And what we see is that almost 99 percent of people age 65 have either qualified for Medicare, or a couple percent qualify for programs that predated Medicare, back— you know, these are people who worked for state government for example. For years, state government had their own retirement systems, they were— if you worked for a state government, you didn’t pay into Medicare and the state would take care of you. But the point is that the number of people aged 65 who don’t have insurance in this country is minimal. It’s miniscule. It’s not zero, but it’s as close to zero as you can get. That’s because over the course of our lifetime, everybody works enough to pay into the system to qualify for it one way or the other. And that’s the beauty of it. And as a result, you don’t see people squabbling and saying ’Wait a minute, you don’t deserve Medicare. I paid into it, you didn’t do anything.’ You don’t see those arguments. You don’t see people fighting about whether they deserve it or not, because there’s this sense that everybody’s paid into it, so of course we deserve it.

SG: But we also hear about, okay Obamacare itself, it’s not perfect. You know, you do see some states where people are left— people in the exchanges are left with just one insurance option. What, if we were to make very slow incremental changes, you have any ideas of like Obamacare fixes that you think would work better than, let’s say, a repeal and replace?

GK: Yeah. But they would require— there are ideas that Republicans at this point are not going to agree to whatsoever. I mean their intent on ripping this down and —you know, they basically want to dismantle the, they wanna blow up the building and start over. And I’m not sure that they really do wanna start over, I think they just wanna blow up the building. I mean I'm genuinely convinced that that’s what they want. They’re not really interested in stabilizing insurance markets or expanding the Medicaid programs. I think what they’re most interested in is shrinking government. And this was the— It’s easier. You have to realize the historical context here. And you’re way too young to know this, but you know I actually saw it as a kid and as a teenager, that when Medicare was enacted, there was still this kind of Republican opposition to Medicare. This was socialized medicine. This was government takeover of the healthcare system. But it was doctors and hospitals who were convinced that it would benefit them. And then once people started receiving benefits and saw how the program worked, this kind of political opposition went by the wayside. But you had members of Congress saying the same things they say about Obamacare about Medicare. ‘This is the wrong thing for the country to do. This is— The government is getting in between doctors and their patients, and government should not be in the business of healthcare.’ And today this program, we won’t call it sacrosanct, because I know that the Republicans wanna do— wanna shrink Medicare as well. Especially Paul Ryan, who is intent on changing Medicare.

SG: Yes.

GK: But even Paul Ryan would not say that we need to get rid of Medicare.

SG: Yeah. Well I mean, it’s mostly older people who vote.

GK: Even he’s smart enough politically— Yeah, he’s smart enough to know politically that’s not, that’s a completely dead-on-arrival idea. But the next best thing from a conservative or a Republican perspective is well, okay. So you can’t get rid of Medicare now, it’s entrenched. Millions of people have benefited from it, we know it works. But we can shrink it, or we can— because shrinking government spending is always the underlying principle that guides Republican thinking. And so yeah, you can’t get rid of this program. It’s not feasible to do it politically. But we can do something to keep it from being so big. So we’ll convert it to a voucher program and then say that vouchers are gonna grow at a relatively, at a rate that’s less than medical costs. So the voucher gets smaller over time.

SG: So then another question I have for you is: We just talked about how it would be difficult to completely scrap Medicare, that even Paul Ryan would know that, you know, it’s helped other people. In this repeal and replace effort, it’s ultimately going to be taking away a benefit that a lot of people have received. Do you, I guess—

GK: Yeah, so the key question you have to answer is: Who’s losing the most? Again, it gets back to the program has helped people in two different ways. One is through the Medicaid expansion, and one is through the subsidies in the exchanges, mostly for lower-income people. But not completely poor, more low-income to middle-income. So the poor people, Republicans I can say confidently, they just don’t care. In fact, the number of hostile statements that I've seen from Republican politicians about poor people makes it abundantly clear that they don’t really care if poor people lose their health insurance.their solution or their response is, nobody deserves health care for nothing. If people are sick, it’s because they’re not taking care of themselves. And if you got a better job, you’d get health insurance benefits through your place of employment.

SG: A personal responsibility/bootstraps argument.

GK: Exactly, yeah. So that’s— they just don’t care about that portion of the population. Now, there are a lot of people in sort of that low-income to middle-income are getting subsidies who are gonna lose out. And they are somewhat concerned about that group. So you know, that’s why they’re trying to say, ‘Well look. We’ll give states the option to create risk pools and then you can push people who are sick into the high-risk pool, and then everybody else’s premiums will be lower. So we’re not taking your insurance away, we’re just gonna go back to the old market rules, or at least give states the option to adopt the old way of doing things. And if you live in one of those states, your premiums could go down if you’re lucky enough to be relatively healthy and never had a pre existing condition. You premiums will go down, and the sick people would be shunted off into the high-risk pool. And you know, hopefully you’re not one of them. And if you are, it’s Obama’s fault anyway. So don’t blame us.’

SG: So my next question is— And I know that this is really looking into a crystal ball, but because you know, I think that a lot of people who have been following this this week were sort of breathing a sigh of relief, like okay this looks dead for now. But it could rise from the ashes at any time. Do you think it will pass?

GK: I think so. They’re calling it ‘the zombie bill’. They’re calling it ‘the zombie bill,’ and I didn’t get that at first. But then I realized oh of course, it’s because it’s not dying. It’s the undead bill. So I don’t know. I honestly, I'm so perplexed by what’s going on. The part of me that wants this to die is hoping that they’re going to run out of patience and say, ‘Look, we just can’t do it now.’

SG: ‘We can’t do it right now, let’s move on to tax reform or something.’

GK: Yeah, move on to the next thing and— that we can do.’ I don’t know. What I— The reason I just feel that there’s no way forward, despite Trump’s telling them earlier that —or yesterday- that ‘All right, well we’re gonna lock you in a room and we're not gonna let you out until you come to a decision.‘ It’s like a hung jury, right? ‘Go back and, you know, it’s unacceptable that you haven’t reached a verdict, so we’re gonna lock you in a room until you do.’ The problem is I can’t see how you reconcile the two sort of wings of the senate that disagree with each other. So if you try to satisfy Rand Paul, you guarantee that you’re gonna lose three or four on the other side. So just the pure numbers, I would say you just write off Rand Paul and say he’s extreme, and he’s only gonna— there aren’t other people who are gonna join him.

So you have to try to reach Lisa Murkowski and Senator Collins and you know, those few that are moderates. And the senator from Utah and the senator from Nevada. And the senator from Kansas. So what can you do to reach them? Well I tell you, I think they could say ‘Look, we’re not gonna blow up the markets. We’re gonna make the subsidies even more —try to make them even more generous. We’ll do—’ In other words, not really dismantle Obamacare as much. And they’re still gonna cap Medicaid, because again, I don’t think the Republicans care about losing people who are on Medicaid. I think they believe that those are mostly democratic votes anyway, so if 13 or 14 million low-income Democrats lose their health insurance, they don’t give a damn.