Schrödinger's CAT Scan: Bernie does/doesn't change his M4All plan to accommodate union contracts

Last night, the Washington Post posted a story with a headline which made top campaign representatives for both Bernie Sanders and Kamala Harris go nuts on Twitter:

Sen. Bernie Sanders changes how Medicare-for-all plan treats union contracts in face of opposition by organized labor

Sen. Bernie Sanders announced a key change to his Medicare-for-all insurance plan Wednesday, a move meant to assuage fears on the part of organized labor, whose support is being heatedly sought by all of the candidates for the Democratic presidential nomination.

Labor representatives have expressed concerns to candidates publicly and to campaign staffs privately that a single-payer system could negatively affect their benefits, which in many cases offer better coverage than private plans. The change announced Wednesday would effectively give organized labor more negotiating power than other consumers would have under his plan by forcing employers to pay out any money they save to union members in other benefits.

Tommy Christopher of MediaITE has a pretty good summary of the Twitter sh*tstorm which immediately followed:

A bit of a feud broke out Wednesday over a Washington Post report claiming Sanders changed his M4A plan in a way that was a “seeming acknowledgment of a role for private coverage by a campaign that has railed against others for not taking a hard enough stance against such plans.”

Several senior staffers for California Senator Kamala Harriswho has been viciously attacked by Sanders staffers for changing her positions on M4A and introducing her own versionquickly leaped on the Post article as evidence of hypocrisy. Harris National Press Secretary Ian Sams and Communications Director Lily Adams led the charge...

...Sanders campaign officials pushed back, insisting that there was no actual change to Medicare for All, and deriding “The Amazon Post” for their reporting.

The good news is that everyone gets to be a little bit right in this three-way feud, although The Washington Post‘s share of rightness is minuscule.

OK, so here's the deal: The Sanders campaign is technically correct that there's been no changes of any sort to the actual wording of the legislative text of S.1129, the Medicare for All Act of 2019, since Sanders introduced it back in April.

What has changed is an addition to Sanders' official labor proposal:

A fair transition to Medicare for All: Bernie will require that resulting healthcare savings from union-negotiated plans result in wage increases and additional benefits for workers during the transition to Medicare for All. When Medicare for All is signed into law, companies with union negotiated health care plans would be required to enter into new contract negotiations overseen by the National Labor Relations Board. Under this plan, all company savings that result from reduced health care contributions from Medicare for All will accrue equitably to workers in the form of increased wages or other benefits. Furthermore, the plan will ensure that union-sponsored clinics and other providers are integrated within the Medicare for All system, and kept available for members. Unions will still be able to negotiate for and provide wrap-around services and other coverage not duplicative of the benefits established under Medicare for All.

Here's the problem in a nutshell (vastly simplified):

  • Let's say a union negotiated a contract last year which sets total compensation for their members at $60,000/year: A $50,000/year salary plus a Platinum-level healthcare plan worth, say, $12,000/year, with the employer covering $10,000 of the premiums.
  • Medicare for All eliminates the need (in fact, eliminates outright) that healthcare plan, since everyone would be shifted over to a universal single payer system.
  • The employer saves $10,000/year (with their corporate taxes going up, say, $5,000 to cover their portion of the Medicare for All tax) for a net savings of $5,000.
  • The employee saves $2,000/year in premiums (with their income tax going up, say, $1,000 to cover their portion of the Medicare for All tax) for a salary net savings of $1,000.
  • HOWEVER, from the union worker's perspective, they actually just lost around $9,000/year...because they negotiated away a $60,000 salary in the first place for what amounts to nothing a few years later.

The actual situation is more complicated than that, of course, and many union workers would presumably still come out ahead, but this is the crux of the controversy.

Sanders' labor rule appears to require that the employer increase the base salary from $50K to $55K (or possibly the full $60K? I'm not sure whether the increased corporate tax would be subtracted first or not) to make up for the portion of their compensation which has been eliminated.

At first, it may sound like the Harris and Sanders campaigns fought this debate to a draw: There was a change made, but it wasn't technically part of the M4All bill itself, so it doesn't really count as a change.

HOWEVER, over at The American Prospect, Jon Walker made a very good catch regarding the second part of the paragraph from Bernie's labor plan:

Furthermore, the plan will ensure that union-sponsored clinics and other providers are integrated within the Medicare for All system, and kept available for members. Unions will still be able to negotiate for and provide wrap-around services and other coverage not duplicative of the benefits established under Medicare for All.

Whoops. That's a whole different story. As Walker explains:

Either these are mostly meaningless promises without actual policy implications, intended to trick voters, or Sanders’s past statements about banning duplicate insurance don’t really hold up.

Sanders’s Medicare for All bill is entirely comprehensive, fully covering everything. It is also meant to aggressively focus on equality by denying everyone, except the rich who can afford concierge medicine, a way to pay for faster treatments by banning duplicate insurance. Those are big moral and practical selling points for the law, but inconsistent with these union promises.

Sanders’s bill is so comprehensive that there is no possibility for “wrap-around services and other coverage” that Medicare for All wouldn’t cover. For example, one of the only theoretical additional pieces of coverage Sanders even mentions is plastic surgery insurance, but that does not exist in the real world and won’t ever make sense. The whole point of Sanders’s argument up until now is that there would be nothing for unions to negotiate on health care, since the government would do it all.

I've written about this exact point many times before: The Sanders campaign has pushed the "It covers EVERYTHING and GETS RID OF private insurance!" as a major selling point for months...while at the same time insisting that "no, no...it does allow private supplemental coverage, really!"...except that it covers so much there's almost nothing left to be "supplemental" coverage. Walker's point here is that Bernie's M4All proposal is so comprehensive there'd be barely any room for "wrap-around" services to negotiate over in the first place.

More importantly, there is also no way to really square keeping “union-sponsored clinics” open for members with the principles behind his ban on duplicate insurance. If union-sponsored clinics need to treat everyone equally, regardless of union status, they effectively would become community health clinics, offering nothing special for union members. If, on the other hand, employers can pay for union-sponsored clinics where union members get special privileges for faster appointments, that would be for all intents and purposes duplicate insurance.

As I've noted before, and as Walker notes here, there's nothing wrong with Bernie's plan allowing for union-specific perks...the problem is with his (and his supporters) insisting that anyone else who deviates from his "Pure Single Payer With No Exceptions Period" edict is by definition a Neoliberal Corporatist Sellout®...but when he does so, all of a sudden it's a brilliant and reasonable idea:

...either these promises are meaningless claims to placate confused voters, or Sanders has effectively endorsed in all but name the duplicate insurance we see in countries like Norway, Sweden, and New Zealand.

If it is the former, it is strange that Sanders doesn’t just make the simple argument that health care shouldn’t be tied to your employment at all and unions will have nothing to do with health care. If it is the latter, it makes Sanders’s rhetorical insistence that he is “banning private insurance,” while allowing duplicate insurance in all but name, a strange political decision given how poorly banning private insurance polls.