How We Define ‘Cheapest Health Care’ Radically Shapes Policy Discussions

On “Meet the Press,” Senate Minority Leader Chuck Schumer dodged a question on Medicare for All by saying he will support “a plan that can pass and that can provide the best, cheapest health care for all Americans.”

This non-answer shows that the battle to define what “cheapest” means in the context of health care is going to shape the entire agenda of the Democratic Party in the coming years.

In health care, “best” is an inescapably nebulous term around which there will never be agreement. There are hundreds of different ways to define and measure it. But in health care policy, “cheapest” can only really be interpreted four ways: cheapest for the government, cheapest for the country as a whole, cheapest as in most cost-effective, and cheapest for regular individuals.

How “cheapest” is defined has radically shaped health care policy in the past and will shape it in the future.

Cheapest For The Government

This definition has unfortunately dominated most health care policy discussions until recently. It is the definition all opponents of progressive health care reform (Republicans, insurance companies, hospitals, drug makers, etc.) want to make sure every future conversation is based upon.

This is the definition President Barack Obama and other Democrats used for the Affordable Care Act in 2009 and it profoundly shaped the law, mostly for the worse. For example, the decision to have the federal government provide most of the funding for Medicaid expansion was made to make the law merely appear “cheaper.” But it gave Republican state lawmakers an excuse to refuse to expand Medicaid and left states scrambling to pay for it.

Mostly depressingly, Democrats in 2009 knowingly chose to make the Affordable Care Act (ACA) significantly worse and more expensive for individuals purely so they could claim it was “cheaper” under this narrow definition.

Democrats were originally planning to require insurance companies to spend at least 90 percent of all premiums dollars on actual care. Yet this idea was heavily watered down when the Congressional Budget Office (CBO) decided that 90 percent would cross their imaginary threshold of too much regulation, concluding that the “health insurance market should be considered part of the federal budget.”

In effect, the CBO said if this regulation was included they would consider all premiums paid to insurance companies by individuals part of the official federal budget. While this taxonomic shift would have zero impact on real people, it was enough to quickly cripple one of the law’s most promising ideas because it would make the ACA not “cheap” under this one misguided framing Democrats let define the debate.

This is why opponents of reform are so aggressively pushing this one-and-only definition of “cheapest.” It not only creates a huge problem for big plans like Medicare for All but also for more modest reforms like added regulation. It is why the Koch Brother-backed Mercatus Center so aggressively focused on Medicare for All’s total cost to the government. It is why they so desperately tried to work the “fact checkers” as the left pointed out the study shows Medicare for All would actually reduce overall health care spending by trillions.

All Other Frames Show Medicare For All Is Cheapest

Under any other framing of “cheapest,” Medicare for All is clearly cheaper than our current system. Even conservative think tanks admit it would result in the county spending less overall on health care. It would also obviously be more cost-effective since it would cover more people for less money. And most individuals would spend less overall—both in premiums/taxes and out-of-pocket costs.

Whether the main framing of “cheapest” is about national expenditure, cost effectiveness, or average cost to individuals would have some policy implications around cost-sharing and benefit design but overall the difference would be modest. For progressives to win, “cheapest” must always be framed in the media and in the political debate around one of these three more holistic concepts of cost.

If we let the way the country talks about “cheapest” health care solely revolve around the federal budget, progressives will lose. Such a focus will make big sweeping reform and even minor improvements dramatically harder. Shifting this framing should be a goal that unites everyone on the left, regardless of their particular policy preferences.