Sally Pipes: Biden's radical health care plans – here's what they mean for you

When Democrats gather – virtually – for their nominating convention this week, health care is sure to take center stage. Not only is the world in the midst of a historic pandemic, but Democrats have spent the last few years making health care reform their flagship issue.  

Yet for voters who value things like choice, lower taxes and high-quality treatments, the proposals that Joe Biden, Kamala Harris and their surrogates champion this week won't provide much to cheer about.   

The former vice president may not have joined his party on the "Medicare-for-all" bandwagon, but he's still proposing to ultimately dismantle America's market-based health care system. 

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Take the Biden camp's vision for Medicare. The health care entitlement for seniors has been teetering on the brink of insolvency for much of its 55-year history. The latest report from the program's trustees projects that its hospital insurance fund, Part A, will be exhausted in just six years. 

That calculation was made before COVID-19 led to the biggest wave of unemployment since the Great Depression. With fewer workers paying into the system, some estimate the Part A trust fund could be insolvent in as soon as three years. 

Biden has no real plans to address these shortfalls. Instead, he wants Medicare to spend even more money. He intends to lower the enrollment age to 60. That proposal would make more than 22 million Americans newly eligible. And it could add as much as $100 billion to Medicare's annual costs. 

Such a vast expansion of Medicare wouldn't just impose unprecedented new burdens on American taxpayers in a time of economic turmoil. It would also leach valuable resources out of the health care system and reduce the quality of care around the country. 

That's because Medicare underpays health care providers. According to the American Hospital Association, the program reimburses hospitals at a rate of 87 cents for every dollar of care provided. 

This public option would condemn the private insurance industry to a swift and certain collapse.

To recoup these losses, providers often raise prices on private insurers. A recent review of 19 different studies concluded that private health plans pay 143 percent of what Medicare pays for physician services. For hospital care, private insurers pay double the Medicare rate. Research from the RAND Corporation has found that private insurers pay hospitals 241 percent of what Medicare pays, on average.  

In other words, privately insured patients subsidize Medicare. 

Nearly three-quarters of Americans who'd be newly eligible for Medicare under Biden's plan are currently insured in the private market. If these folks switch over to the entitlement, there will be far fewer privately insured patients to help make up for Medicare's underpayments. Providers' revenues would plummet. Some doctors and hospitals would respond to the pay cuts by seeing fewer Medicare patients – or even closing their doors.  

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Biden's Medicare proposal isn't the most ambitious health care reform voters will learn about this week. That honor goes to his plan to create a public insurance option available to all Americans through ObamaCare's exchanges. 

This government-run health plan wouldn't just resemble Medicare. It would be administered by the Center for Medicare and Medicaid Services. And according to Biden's health care task force, it would keep costs down by "negotiating prices with doctors and hospitals, just like Medicare." His plan would even include an option with no deductible.   

This public option would condemn the private insurance industry to a swift and certain collapse. It's impossible for private plans to compete with a government alternative that underpays providers and never needs to break even, much less turn a profit. 

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Given its unfairly low cost structure, the public option would be able to underprice private plans – and attract customers in droves. Providers would likely respond to the influx of low-paying public option patients by raising rates on what few private insurers remain. Insurers would pass those hikes onto consumers, who will respond by fleeing to the public option. Eventually, the public option would be the only health plan left standing.  

The Biden campaign's health care plans would deprive the country of vital resources during a public health emergency. They'd add crippling new financial burdens to our already precarious entitlement state. And they'd do all this in a way that gradually eliminates private health coverage. 

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