Mike Bloomberg announces his healthcare plan: Basically ACA 1.5...but also includes a good PO

Well, for good or for bad, billionaire and former New York City mayor Michael Bloomberg is actually registering in the mid-single digits for the Democratic primary in recent polling, so he's a force to be reckoned with whether I'm a fan of his literally buying his way onto the national stage or not.

Anyway, he rolled out his official healthcare platform the last week, and it's not bad, it just looks less impressive compared to most of the field. In all honesty, it pretty much amounts to a somewhat weaker version of Joe Biden, Pete Buttigieg & Amy Klobuchar's "ACA 2.0 w/Public Option" proposals (which are already considered "weak tea" by the more progressive members of the Democratic base, although I'm actually pretty impressed by each of them myself).

Here's Bloomberg's plan verbatim from his campaign website:

Public option

The first step is to create a Medicare-like public option — health insurance that would be administered by the federal government but paid for by customer premiums. In rolling out this option, priority would go to the uninsured, including low-income people who are in states that haven’t expanded Medicaid under the ACA. A public insurance option would improve consumer choice and increase competition in the private insurance market, pushing down everyone’s premiums. People of modest means who buy the public option would be eligible for the same subsidies that would apply on the health insurance exchanges.

Build on the Affordable Care Act

The ACA made great strides in helping people who don’t get health insurance through an employer afford coverage in the individual market. Mike would reverse the Trump administration’s attempts at sabotage: He would expand enrollment efforts, restrict the sale of health plans that don’t meet ACA standards, and defend the law against politically motivated lawsuits. He would expand subsidies to cap premiums at 8.5% of a household’s income. He would create a permanent reinsurance program that, by helping insurers with the largest claims, would reduce customer premiums roughly 10%. Finally, because about a third of Americans choose not to see a dentist regularly because it is too expensive, Mike would expand Medicare to include an optional policy covering dental, hearing, and vision care, and would require all states to cover oral health services for adults in Medicaid.

Cap health care prices and ban surprise medical bills

Expanding insurance coverage is not enough to protect Americans from high medical bills. The U.S. health care market has been unable to restrain costs. And this problem has been compounded by provider consolidation. To bring prices down, Mike would cap out-of-network charges at 200% of Medicare rates. (Medicare does something similar; beneficiaries enrolled in private plans, known as Medicare Advantage plans, have capped prices for out-of-network providers. This cap protects beneficiaries, and, at the same time, gives private insurers greater leverage in negotiating rates with hospitals and clinicians.)

Lower drug costs

Mike would work with Congress to authorize the secretary of Health and Human Services to negotiate drug prices with pharmaceutical companies. The government would cap drug prices at 120% of the average in other advanced nations — and this cap would apply to consumers with public or private insurance. Mike would ban drug company payments to the people who make decisions at pharmacies so that drug makers compete on the cost and value of their products — not on the amount of money they pay to get preferential treatment. Mike would also reform the Medicare Prescription Drug Benefit to encourage greater competition, and cap beneficiaries’ annual out-of-pocket costs at $2,000.

Taken together, these changes would lower health care costs, insure millions more Americans, and promote competition and efficiency in the health care market.

Bloomberg says that "additional details" will be released soon, so...fair enough. In the meantime, let's look at what he's laid out above:

  • Public Option: Like Biden, Buttigieg and Klobuchar, Bloomberg is calling for a "Medicare-like" PO, starting with non-expansion states. He says that "people of modest means" would be eligible for "the same subsidies" that apply on the ACA exchanges...except I can't tell from that wording whether he's talking about removing the 100% lower-bound subsidy cut-off (which leaves those under 100% FPL in the Medicaid Gap in non-expansion states) or if he simply means the existing subsidies available to those earning more than 100% FPL in non-expansion states (or 138% FPL in expansion states). He also doesn't go into many specifics about what the "Medicare-like" Public Option would include in terms of scope of coverage. He mentions an optional supplemental Medicare policy for dental, audio and vision care, for instance...but apparently those wouldn't be baked in to Medicare itself.
  • Build on the ACA: Like Biden, Buttigieg and Klobuchar, Bloomberg too would #KillTheCliff...removing the upper-end 400% FPL income cap on ACA subsidy eligibility, while also making the upper benchmark premium cap 8.5% of income instead of the current 9.8%. He doesn't specify what the subsidy formula beneath 400% FPL would be, but I'd bet almost anything it's the exact same formula being proposed by Biden, Buttigieg and Klobuchar...as well as by Elizabeth Warren for her proposed "transitional" period...which also happens to be the same formula proposed in H.R.1884 and H.R.1868 which I've been pushing so hard. That's the good news.
  • The only problem with this is that it doesn't sound like he's calling for upgrading the ACA benchmark plan to be indexed with Gold plans instead of Silver, which would substantially reduce deductibles and other out of pocket expenses, as Biden, Buttigieg and Klobuchar (and Warren, in the short term) are calling for.

As an aside: The permanent reinsurance program is fine, but I'm honestly not sure that it would accomplish that much in terms of what people actually pay after the (expanded) subsidies are applied. Let's say you're single and earn 500% FPL (around $63,000/year). Let's further say that the benchmark Silver plan at full price would cost you, say, 12% of your income ($7,560/year, or $630/month).

Right now you don't qualify for subsies at all, so a reinsurance program which reduces the full-price premium by 10% would indeed save you $756/year or $63/month. It would also cut the premium cost down to 10.8% of your income.

Under Bloomberg, Biden, Buttigieg or Klobuchar's plans, however, you'd receive subsidies which would reduce your premiums down to 8.5% of your income anyway ($5,355/yr or $446/mo), which means Bloomberg's reinsurance program wouldn't make any additional difference to them anyway (Klobuchar is the only other one of these four who specifically lists reinsurance in her plan). It's not a bad thing, mind you, and it would probably help some people in certain areas where the full price subsidy would fall below the 8.5% of income mark, but that would likely be around the edges.

  • Capping surprise/out-of-network bills at 200% of Medicare rates is a reasonable idea...and is exactly what Buttigieg calls for in his plan. I'll have to read Biden & Klobuchar's plans in more detail but I assume they're calling for something similar.

So...yeah. Overall, Bloomberg's proposal is...OK. It's the weakest of the plans being proposed by any of the major candidates, but it would still be a substantial improvement over the current situation, so...good for him, I guess?