COVID-19 and Medicare for All

Heritage Explains

COVID-19 and Medicare for All

This week, on the “ Heritage Explains” podcast, Sally Pipes, president and CEO of the Pacific Research Institute, explains why Medicare for All is not an answer to COVID-19 care.



MICHELLE CORDERO: From my makeshift home studio in a closet in Northern Virginia, I'm Michelle Cordero and this is Heritage Explains.

CORDERO: As we fight this new invisible enemy, COVID-19, Americans are scared. They're worried about their health and their family's health and millions have lost their jobs as businesses have been forced to temporarily close their doors and the state of the economy is uncertain to say the least. And in the middle of all this suffering, the call for government run healthcare is getting louder. In fact, a survey taken in late March by the morning console found that 55% of voters support Medicare For All.

Its biggest advocates, Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez say that it's more important than ever that we extend Medicare and Medicaid coverage to all Americans.

BERNIE SANDERS: If you have lost your job, you may not have any income and now you're worried about healthcare. What Medicare For All does, it's not a radical idea. It does what every other major country on earth does. It guarantees healthcare to all of our people, not tied to employment. You lose your job, you got coverage. You're a small business person, you've got coverage, no deductible, no copayments.

CORDERO: When you put it that way, it's easy to understand why Americans might take hold to the idea of seemingly free healthcare right now. Thankfully, we have empirical evidence in these other countries that prove government run healthcare is not the answer.

Today, we'll explain what's happening in Canada, Italy, and Great Britain when it comes to fighting this virus. Why price controls on vaccines would be a really bad idea and what solutions exist for Americans who get sick with COVID-19 but have no health insurance.

Healthcare expert Sally Pipes is president of healthcare policy at the Pacific Research Institute. Today, Pipes, who is also a Canadian explains.

CORDERO: Sally, thank you so much for chatting with us today. We really appreciate it. Can you help me understand the argument out there, and we know it's out there, that Medicare For All or free government healthcare would make treating the Coronavirus easier?

PIPES: Well, it's exactly the opposite. Coronavirus is the worst argument for Medicare For All and you've probably seen Alexandra Ocasio-Cortez says COVID-19 absolutely an argument for a Medicare For All. Bernie Sanders, of course, who is out of the race now, COVID makes it abundantly clear that healthcare is a human right and why it should be. Well, these are arguments from people who believe that government should fully run the healthcare system. If you look at the countries that have a single payer system, Medicare For All or a near single payer system, they are having tremendous problems in dealing with the Coronavirus. And government has to set budgets and they have to allocate what's going to be spent. And so if you look at Canada, if you look at the United Kingdom. And in particular if you look at Italy, these countries are having tremendous problems because the government is in charge and that there are real problems with the facilities that are available, having the latest vaccines, the latest antivirals, the latest everything that is so important in America, so available in America.

CORDERO: Let's get into that a little bit more. In one of your op-eds in the Washington Examiner, you talk specifically about some of the trouble that they had in Canada, for example. What were some of the problems specifically with Medicare For All Coronavirus in Canada?

PIPES: Well, in Canada, which is the country where I'm from, they have a tremendous shortage of masks. They have tremendous shortage of beds. The hospitals, which in Canada, everything is owned by the government. There's no private health coverage in Canada for anything considered medically necessary. So the hospitals are full of people that either have the flu or have some other situation. And so there's no spare capacity to take on people with Coronavirus. So if you look back to 2003, 2004 when SARS was the big issue, Canada had 375 cases of which 44 people died. Here in the US, there were only 27 cases and no one died. People in Canada, particularly in Ontario in the hospitals, were sitting in the emergency rooms for up to 16 hours and while sitting there infecting other people which spread SARS and the same thing is going to happen today. Canada's being a bit late in coming to the Coronavirus, but prime minister Trudeau has said it is a real problem. They're very, very worried and I think we're going to see particularly in Ontario and Quebec rising deaths from Coronavirus.

CORDERO: You also mentioned examples in the UK. Can we talk a little bit about some of the problems they're having there? I have lots of friends from the UK, even a friend who recently lost his father to the Coronavirus. Why are they struggling so much?

PIPES: Well, 90% of people in Britain are covered under the National Health Service. 10% of people have private coverage, but they would also have National Health Service Coverage. The problem is in a country like the UK, their government determines what's going to be spent on healthcare. You get rationed care, just like in Canada. You get a long waits for care, just going back to Canada. The average weight last year from seeing a primary care doctor to getting treatment by a specialist, 20.9 weeks, that's over five months. In the UK, last year, 4.6 million people were on waiting lists for hospital care, the highest number ever. And 15% of the people that were waiting more than 18 weeks. And a recent survey of doctors in the UK, only eight doctors out of 1600 said that the National Health Service was prepared to deal with the Coronavirus and we're seeing an increasing number of people dying in the UK with Corona virus.

CORDERO: Okay then, so what should Americans do if they spike a fever or start to show symptoms of this virus but they don't have insurance?

PIPES: Well, I think this is something that we really need to talk about. Well, one of the things is President Trump, under his administration, they approved short term limited duration plans. These plans can be signed up. You can sign up for a year, they're renewable for up to three years, and they're not subject to the 10 essential health benefits under Obamacare. So the plans are really reasonable. They're bare bones plans, but particularly for younger people who probably don't have a coverage through their employer or have a health savings account, they are terrific. And yet, so few states are actually allowing the short term limited duration plans. But for these people who don't have coverage, this is the perfect way for them to have coverage. And should they come down with COVID-19, they would be covered. We need to promote so many market solutions like health savings accounts for those people who have HSA.

PIPES: If they set those up, they'd be able to use that to pay for their care. But one of the things that's interesting and that people don't talk about is the census bureau. The US census bureau found that of the estimated 27 million non elderly people who are uninsured in 2017 and it's probably about the same now, 25% of them were people who were eligible for Medicaid or CHIP and didn't sign up. 30% were eligible for Obamacare subsidies but didn't enroll. 14% declined an offer of employer sponsored coverage. So really there were very few people who have difficulty getting coverage today. And a lot of them make the decision, they don't want to spend the money getting coverage, but we have to... If we can achieve universal coverage in this country, if we offer universal choice, things like a short term limited duration plans, a fee for service medicine, all of these things. People need to be able to get the kind of coverage that suits their needs and those of their families.

PIPES: And so you know, people... And of course in America people turn up at emergency rooms, which was one of the things because emergency room care is so expensive. One of the things that President Obama wanted to get rid of with Obamacare, and of course it hasn't happened because people on Medicaid, the low income people, people earning below 138% of the federal poverty level, many of those people find they can't find a doctor because doctors are reimbursed at rates about 40% below what they get paid for treating private patients. So you know, we really need to open up our system. And as I say, promote things like short term limited duration plans, health savings accounts. Give people the kind of coverage opportunities that fit their own needs.

CORDERO: Backtracking just a little bit to the short term duration plans. You said that states aren't allowing these, why not?

PIPES: Well, Speaker Pelosi has said, short term limited duration plans are junk insurance, their sabotaging Obamacare. And of course what she really means to say is by not allowing them, you're sabotaging the care of many young people in particular who could get coverage and afford coverage. And particularly if this lock down in most of the states, so many particularly young people are applying for unemployment insurance, huge numbers applying for UI. But you know, these people would be able to afford these plans and get care if they had the short term limited duration plans. But as I say, Pelosi, Governor Newsom in California has banned them saying, again, sabotaging California, junk insurance, but it is not junk insurance for people that don't have coverage and that could afford these plans.

CORDERO: I'm thinking about right now some opinions I've read that advocate for price controls on a COVID-19 vaccine when one comes out so that everyone can afford it. And I think it's easy to understand why liberal policies could be appealing. It sounds fair and maybe even necessary, especially with millions of people out of work. Can you explain as simple as possible why price controls on a vaccine would be a bad thing?

PIPES: Well, price controls on pharmaceuticals in this country would be a disaster. America is a country where most of the new pharmaceuticals, biologics, vaccines are developed for the very reason that we don't have price controls in this country. It costs about $2.6 billion to bring a drug through all the trials to get it through the FDA. Only about 12% of drugs actually make it through the FDA. And so, it was a very expensive process with very high rates of failure. But most of the companies, whether it's a GlaxoSmithKline, a British company, or Santa Fe, a French company, they don't do R&D in France or in England or even in Canada because these countries do have price controls and so there's no incentive for them.

PIPES: So America as a country, you just look in the mainstream media every day. Where is all the work? Automakers are now... General Motors is published is manufacturing ventilators. We have Moderna, a biologic company based in Boston that within 42 days, they identify the [inaudible 00:12:55] compound in Coronavirus. They launched clinical trials almost immediately. GlaxoSmithKline is working on potential vaccines. So much is happening and it's all happening in this country and we don't want to have price controls, which will reduce research and development and innovation. You don't want to have an international price-

CORDERO: So you're saying it would limit the incentive?

PIPES: Absolutely. The incentive with would go away and we wouldn't be having... It's a private sector in America is bringing the new solutions to the fore, not countries with price controls. And these people in these countries free ride off our innovation.

CORDERO: So then can you explain what we can do then? What's the solution for Americans to get a break at pharmacy counters without government price controls?

PIPES: So one of the big reasons that drugs can be expensive is because of a pharmacy benefit managers. These are middlemen that negotiate with insurance companies to provide the discounted rates that are going to be offered in the pharmacies. The problem is that the returns from the savings from the negotiated price, those savings are not returned to the consumer. And so we need to reduce the role of PBMs and we need to make sure that consumers are getting these savings. Another thing is that most of the drugs that are used in this country are generic drugs. We need to make sure that generics are approved quickly. We need to support generic drugs. We need to support biosimilars, the generic brand of biologics. And with the FDA, the Food and Drug Administration, we're seeing some movement there. Generics getting approved quickly.

PIPES: The anti-malaria drugs, the two, Hydroxychloroquine, these things have been approved. They were moved through the FDA almost immediately. We need to make sure that the FDA starts approving drugs quickly and efficiently. Of course, they have to be safe and they have to be effective, but if they have long, long delays, that's harmful to people. So we need to have faster FDA approvals. We need to support generics and biosimilars. We need to get the middlemen, the pharmaceutical benefit managers out of the taking the savings that should be going to consumers. And also a number of drug companies have very good programs, patient programs that help those people that can't get or can't afford their drugs. So all of these things will open up the market and allow us to get access to the best drugs at affordable prices. We don't need an international price index tying our drug prices to other average prices in other countries. We need to let the market work.

CORDERO: Sally, the COVID-19 crisis really is testing our healthcare system. As a closing word, if you had the ears of our Congressman or the President of the United States, what would you say to them about how to deal with this from a healthcare perspective?

PIPES: We need people in government to understand that government bureaucracies put a brake on innovation. It's the market economy that's producing the test kits, the masks, the new drugs, all of these things. So we want to take away government control and allow the market to work because in that way, we will have access to, as I say, the very best antivirals, the vaccines that will be produced by the private sector, not by government drug companies that are set up by government. So that is what we need. We don't need price controls. We need to allow the market to flourish.

CORDERO: I think that's exactly right and that's exactly what we saw in the very beginning of all this with the tests. Thank you so much, Sally, for joining us and connecting with us and we appreciate your work.

PIPES: Well, thank you so much.

CORDERO: That's it for this week's episode. We hope you are well. I would love to hear from you. Email me at managingeditor@heritage.org. Let me know what topics are most important to you right now that we could break down. Tim is up next week and talking about how we're going to safely vote through this pandemic.