Public Option Would Be a Pay Cut for America’s Frontline Health Care Workers

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America’s frontline health care workers continue to demonstrate incredible resilience and strength as the nation battles the COVID-19 pandemic.  We will win this fight, but as we do so, we cannot ignore the extreme strain placed on health care workers nor lose sight of our responsibility to ensure these heroes have what they need to succeed and thrive in their demanding profession. 

We must prioritize their needs as we consider any major reforms to America’s health care system. It’s no exaggeration to say that the health of our nation depends on it.

One of the policy proposals being discussed today would introduce a “public option” into the commercial health insurance market.  Some propose creating a new government-run plan and some propose allowing people under 65 to buy into Medicare.  Both of these Washington directed public options would impose tremendous strain on the health care workforce and diminish our ability to handle future health care crises.  However implemented, the public option, like its close cousin Medicare-for All, poses a grave threat to America’s beleaguered health care workers.

A public option may seem new and innovative, but the truth is it’s more of the same. Government-run plans like Medicare and Medicaid can offer lower-priced health plans appear to be cheaper because they pay doctors, nurses, and other health care workers less than private plans.  In a review of 19 recent studies, the Kaiser Family Foundation found that Medicare on average pays about half what private insurers pay for hospital services and 30 percent less for physician services. Medicaid generally pays still less. 

Make no mistake: like Medicare and Medicaid, a public option would rely on government rate-setting to lower provider reimbursement.  In light of the pandemic, that’s the last thing health care workers need. 

Providers already struggled to serve Medicare and Medicaid patients prior to the pandemic. In fact, many opt out of serving these populations because they lose too much money, which also means they lose out on serving a substantial pool of patients. During the pandemic, providers are now struggling through major revenue losses as patients delay or avoid receiving care altogether, which has pushed countless medical practices to the brink. Paying them even less threatens their very survival.

Further, providers who do serve Medicare and Medicaid patients must charge private payers higher rates to stay in business. The data noted above make this point abundantly clear. Of course, there is a limit to what private payers can and will pay; a portion of those low government rates inevitably fall on the provider and squeeze the wages paid to America’s health care workers.  

While a public option relies on the same government rate setting strategy as every other government-run health plan, it adds a twist that poses a particularly a serious threat. Medicare and Medicaid limit enrollment to only people who qualify based on their age, income, or disability.  public option, however, would have no such limit.  Anyone, regardless of their current insurance status, would be eligible, greatly increasing the financial pressures bearing down on the American health care workforce.

With the power of the federal government behind it, a public option would become a competitor that couldn’t lose.  This would steadily erode the private market and leave only public plans with lower government rates.  Soon enough, the seemingly innocuous public option would ultimately lead to a single payer system, putting the government in complete control of the health care system. Where does that leave America’s health care workers when only government rates remain? 

It leaves them with lower pay, for the same demanding work.

Our health care heroes deserve better. The pandemic has already taken a devastating toll on them. Long hours, heightened exposure to the disease, separation from family, emotional strain from watching patients struggle – sometimes unsuccessfully – for life, and acting as intermediaries between patients and family has demanded incredible sacrifice from these workers.

America owes them a debt of gratitude – not a pay cut.

Seema Verma is administrator of the Centers for Medicare and Medicaid Services (CMS).

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