"Medicare for All": The Left’s drive to “repeal and replace” Obamacare is based on a lousy definition of "underinsured"

If you have been paying attention to the presidential campaign or the health care debate at all, you have most assuredly heard this argument from the proponents of a single-payer, government-only “Medicare for All” system, championed by Bernie Sanders and Elizabeth Warren on the campaign trail.

They don’t want to talk about just the uninsured anymore. Thanks to Obamacare, the uninsurance rate among adults is still in the single digits, even though Trump has managed to nudge it up from 2017 to 2018. That is not a statistic commensurate with the three-alarm, all-consuming emergency Medicare for All advocates seem to believe health care in America is, so a new statistic was needed. And one came along.:

87 million adults are uninsured or underinsured!

It’s a claim Bernie Sanders has made over and over again, and Elizabeth Warren has repeated in her Medicare for All plan.

That is eyepopping, especially given that of that number, only 23 million are uninsured. On the surface that number would seem to say that Republicans were right in their critic all along that Obamacare made things worse for most people. If you believe that, no one can blame you for getting on the “repeal and replace” of the Left, single-payer Medicare for All.

Except the number is as nuts as it sounds.

The number comes from a survey published by the Commonwealth Fund in February 2019. The report states that, indeed,

Of the 194 million U.S. adults ages 19 to 64 in 2018, an estimated 87 million, or 45 percent, were inadequately insured.

That’s a stunning claim, especially given the fact that the report also clearly concedes that Obamacare has massively improved health care coverage by drastically reducing the uninsured rate, significantly shortening the coverage gap (the time between losing one type of coverage and gaining another), and cutting down on the number of people who miss care because of cost.

So what gives? How can it be that fewer people lack coverage, coverage gaps are shorter, fewer people are missing care because of cost and still the number “inadequately insured” somehow keeps going up?

That is because the definition it uses for “underinsured” - the category that comprises more than two-thirds of those who have insurance but are considered ‘inadequately insured’ - is stunningly bad.

The sole criteria for this classification is non-premium out-of-pocket expenses, real or potential. Under this definition, among other things, anyone who has a deductible of 5% or more of their income is automatically considered “underinsured.”

Let’s think about what this means. Someone who makes $100,000 a year and whose employer pays a 100% of premiums for a plan with a $5,000 annual deductible is, under this definition, underinsured. A couple in the top 2% of income earners making $250,000, paying no premiums and carrying a family plan with a deductible of $12,500 would be considered ‘underinsured’ even if the deductible is covered by a health savings account covered entirely by an employer. Wealthy individuals using multiple tax loopholes to reduce taxable income and buying a high deductible plan would, absurdly, qualify under this definition of ‘underinsured’.

It’s no wonder that under a poor definition like this, the ranks of the “underinsured” have been rising under the Affordable Care Act. Obamacare bans the sale of junk insurance and requires that plans cover essential benefits (the lack of one or more of which would be a much better definition of ‘underinsurance’, but then, the numbers won’t quite have the same theatrical effect), including no-copay primary care. Prior to Obamacare, insurance companies could sell “cheap”, low-deductible plans which either didn’t cover anything major or went away when something major happened, or both.

Astonishingly, under the definition today’s single-payer Medicare for All advocates are using, the people who had junk insurance prior to Obamacare - or who have it now thanks to Trump’s expansion of “catastrophic coverage” - would NOT be counted as underinsured, because although the plans didn’t cover anything important, they had the nomenclature of an insurance plan and the deductible is low.

Additionally, the report also counts those who have had any coverage gap in the past year - regardless of how good their coverage is presently or how short the gap was - as “inadequately insured.” 10% of adults 19-64 are in this category, or 19 million people. The report also confirms that the vast majority of coverage gap that falls in category 2 above seems to be transitional. 61% of those who have had a coverage gap in the past year have had it for less than six months. Fewer than one in three have had a coverage gap of more than a year. The latter is much closer to “inadequately insured” than the former.

There are certainly people who are underinsured in this country, whether because they are forced to choose a cheaper plan with a narrower network because of premium increases, or because the premiums and out-of-pockets add up, or because the coverage is grandfathered and doesn’t cover all essential benefits. We should address these issues and expand both the depth and reach of the framework Obamacare to cover everyone and to lower costs.

But this is no case for the constant drumbeat of ‘repeal and replace’ coming from the Left in the form of single-payer. Certainly not based on a number so completely made up that it doesn’t even come close to resembling the problem, let alone be used for a solution.