Presidential candidate Rep. Seth Moulton criticized Medicare-for-All Single-Payer, comparing it to his experience with healthcare at the VA (Veteran Affairs) as an Iraqi War veteran. He says that healthcare is a right and, therefore, he supports a public option that can compete with private insurance companies.
While Moulton is correct that the VA system has its flaws, his diagnosis is incorrect. This is critically important because we cannot fix our healthcare system without understanding why it is broken.
Both the Veterans Health Administration (VHA) and Medicare-for-All Single-Payer are funded through the federal government and eliminate the wasteful for-profit insurance middleman, but the two systems are very different. Therefore, the challenges that Rep. Moulton has experienced at the VHA will not happen under Medicare-for-All.
Caitlin Oprysko of Politico wrote about this story but omitted the facts around these inaccurate claims made by Moulton.
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What You Need to Know
- Medicare-for-All providers are private sector.
- Medicare-for-All is comprehensive.
- Medicare-for-All is automatically funded to meet the needs of patients.
- Medicare-for-All has a large, balanced risk pool.
- While the VHA is not single-payer, it is still a laudable system.
FACT 1: Medicare For All providers are private sector, but publicly funded vs. the VHA’s public funding and public delivery.
Medicare-for-All providers are private sector: Unlike the VHA, healthcare delivery under Medicare-for-All remains largely private sector, so patients have broad choice of providers throughout the entire country. It’s public funding with private delivery.
- The main similarity between the Veterans Health Administration (VHA) and Medicare-for-All Single-Payer is that the federal government provides all of the funding for the programs and develops the policies, procedures and guidelines to carry out the law’s requirements. However, the delivery of healthcare under each system is very different.
- The Veterans Health Administration (VHA) is one of the world’s purest models of “socialized medicine” in which the hospitals and clinics are owned and run by the federal government, and the doctors, nurses, etc are employees of the federal government. It’s public financing with public delivery.
- By contrast, under a Single-Payer system like H.R. 1384 Medicare for All Act of 2019, the federal government pays virtually all the medical bills, but the delivery of healthcare remains largely private sector. It’s public financing with private delivery. Therefore, patients have much broader choice of providers than under the VHA.
- Under Medicare-for-All, you simply go to any doctor or hospital in the U.S. that you choose, as 96% of all doctors, and virtually every hospital in the country, “accepts assignment” (i.e., 96% of healthcare providers and virtually every hospital would be “in network”).
FACT 2: Medicare For All automatically includes full benefits for all U.S. residents vs. the VHA’s complicated eligibility requirements.
Medicare-for-All is comprehensive: Everyone who is a resident of the U.S. is automatically entitled to full benefits with no premiums or cost-sharing under Medicare-for-All, thereby avoiding the complicated, lengthy process that determines eligibility for VHA benefits.
- The VHA is not a universal system — not even for all the Americans who previously served on active duty in the military. Instead, a complicated formula is used to determine which veterans are eligible for VHA benefits and how much if any cost-sharing they are required to contribute.
- According to Veterans for Peace, of the more than 20 million Americans who served in the military, only about 9 million are eligible for VHA services:
- “Congress has never authorized adequate funding to provide healthcare needs to all who have served in the U.S. military. Therefore the responsibility of determining who receives care and to what extend falls to Veterans (Benefits Administration). VBA administrators categorize veterans into eight priority groups, based on factors such as service-connected disabilities, their income and assets.” (Pp. 5-6).
- “Veterans with a 50% or higher service-connected disability as determined by a VA regional office ‘rating board’ (e.g., losing a limb in battle, PTSD, etc.) are provided comprehensive care and medication at no charge.” (P. 6)
- “Veterans with lesser qualifying factors who exceed a pre-defined income threshold have to make co-payments for care for non-service-connected ailments and prescription medication.” (P. 6)
- “The VBA enforces eligibility rules mandated by Congress that restrict care to the sickest and poorest veterans while excluding more affluent and healthy ones.” (P. 6)
- “The greatest cause of delays in scheduling healthcare services has to do with cumbersome and difficult eligibility requirements that Congress has imposed to limit the number of veterans who are eligible for VA healthcare benefits. Many veterans wait for years while their eligibility is determined, not by the VHA, but by the Veterans (Benefits Administration). So, what the VA bureaucracy is doing most of the time is trying to adjudicate questions like: if someone who is 68 years old and is losing their hearing, is it because of artillery fire they heard while deployed in Vietnam in 1969 or because of all The Who concerts they went to in 1970?” (P. 9).
- According to journalist Suzanne Gordon, in her book The Battle for Veterans’ Healthcare, one large group of veterans excluded from VHA services is the more than 125,000 who received “other than honorable” discharge from the armed forces. (Pp. 28-29)
- According to Veterans for Peace, of the more than 20 million Americans who served in the military, only about 9 million are eligible for VHA services:
- By contrast, under a Medicare-for-All Single-Payer system, every individual who is a resident of the United States is entitled to full benefits, with no premiums, no cost-sharing (deductibles, copayments, coinsurance) and no balance billing.
- Comprehensive benefits include: hospital/inpatient, doctor/outpatient, emergency services and transportation, preventive, prescription drugs, medical devices, mental health, lab work, reproductive, maternity, pediatrics, dental, hearing, vision, rehabilitation, dietary and nutritional therapies, and transportation to receive health care services for persons with disabilities or low-income individuals. (Section 201)
FACT 3: The Medicare For All budget will automatically rise to meet the needs of patients vs. the VHA’s annual risk of underfunding.
Medicare-for-All is automatically funded to meet the needs of patients: As part of the mandatory portion of the federal budget, spending for Medicare-for-All will automatically rise as needed to meet the law’s mandate, rather than being constrained like VHA funding is during the annual appropriations process.
- The VHA falls under the discretionary part of the federal budget and is therefore subject to the annual appropriations process in Congress.
- As the Congressional Budget Office describes this difference, “Another unique feature of VHA is that it is funded through annual appropriation acts, so unlike an entitlement program — in which the government would be obligated to provide all of the health care that enrolled veterans demanded — VHA’s budget and subsequent outlays are determined by lawmakers. In an effort to keep its spending within its budget, VHA has restricted the enrollment of some higher-income veterans who do not have service-connected disabilities. By contrast, payments for most health care services outside VHA, whether provided through public or private insurance programs, are generally triggered whenever care is delivered and are not subject to formal budget constraints.” (P. 3)
- In comparison, Medicare-for-All (like existing Medicare, Medicaid and other federal health programs) is an “entitlement” program and falls under mandatory spending. Therefore, spending automatically rises to meet the law’s mandate. See Congressional Budget Office’s “The Budget and Economic Outlook: 2019-2029” (P. 64)
FACT 4: Medicare For All serves everyone, making it equitable, cost-effective, and robust vs. the VHA’s limited risk pool.
Medicare-for-All has a large, balanced risk pool: in contrast to the VHA, which specializes in caring for a relatively small group of older, sicker and poorer patients, Medicare-for-All gets everyone into the same system and risk pool — old and young, sick and healthy, poor and wealthy. Not only is this both equitable and cost-effective, it ensures that Medicare-for-All enjoys broad support to keep benefits robust.
- The VHA specializes in caring for a unique patient population— former members of the armed services who served on active duty — and many of whom now suffer from myriad complex, chronic conditions, including PTSD, traumatic brain injuries and amputated limbs (P. 2) .
- The VHA population skews older and poorer: In 2012, the average veteran patient was 62 years old (P. 6).
- According to Veterans for Peace, “The VBA enforces eligibility rules mandated by Congress that restrict care to the sickest and poorest veterans while excluding more affluent and healthy ones.” (P. 6)
- By contrast, Medicare-for-All Single-Payer is a program that gets everyone in the same system and risk pool — old and young, sick and healthy, poor and wealthy (See Section 102 of H.R. 1384). Not only is this both equitable and cost-effective, it ensures that Medicare-for-All enjoys broad support to keep benefits robust.
- Per Health Over Profit, “National Improved Medicare for All (NIMA) [single-payer] would create a national health insurance that covers every person living in the United States with comprehensive benefits from birth to death. It’s that simple. One set of rules. One pool of people. And one network of health professionals. This is the most efficient system.”
FACT 5: Despite sabotage and underfunding, the VHA remains popular among veterans.
While the VHA is not single-payer, it is still a laudable system: Despite continued sabotage and underfunding by the privatizers and anti-government politicians, the VHA has many commendable features and enjoys wide support among veterans.
- For those veterans who qualify to be in the highest priority groups, the VHA guarantees a robust set of comprehensive benefits with little or no cost-sharing. These include hospital/inpatient, emergency, preventive care, prescription drugs, mental health, labwork, physical therapy, rehabilitation, prosthetics, dental, hearing, vision, assisted living and home health.
- The VHA is the largest integrated health care system in the U.S. According to Veterans for Peace:, “Patients are treated in a holistic, whole person manner, rather than as a collage of disparate clinical conditions… The primary care team may refer a patient with diabetes or PTSD, for example, to talk to a nutritionist about a diet, a pharmacist about how to correctly administer insulin, or a mental health professional, all of whom are just a walk down the hall. Services like audiology, physical therapy or dermatology may be provided the veteran on the same day, in the same place.” (P. 4)
- The VHA pays approximately half the price for prescription drugs compared to existing Medicare, which was expressly prohibited from negotiating the price of prescription drugs when Medicare Part D was passed in 2003.
- Per the 2018 Univ of Mass PERI study: “According to one recent study, the VA pays, on average, 40 percent less than the price paid by the Medicare Part D prescription drug plan. Another recent study has estimated the VA discount to be 80 percent relative to Medicare Part D.” (P. 48)
- The 2018 Univ of Mass PERI study estimated that Medicare-for-All would save $214 billion per year from negotiating lower drug prices (2017) — almost half (40%) of what the U.S. currently spends on pharmaceuticals. (Pp. 7 & 49)
- The VHA saves money and improves quality of care by eliminating the profit motive and the private insurance middleman out of healthcare. So does Medicare-forAll.
- Per Public Citizen’s February 2019, report: Private insurers spend around 12 percent of their annual budgets on administration. Traditional Medicare is much more efficient, spending only around two percent on administrative costs.” (P. 12)
- Per UMass PERI November 2018 report, “The costs of administering the U.S. health insurance system — both public and private insurance — amount to 8.5 percent of all health care spending at present… A study of insurance administrative costs in other high-income countries shows that insurance administration costs as a share of total expenditures were lower compared to the U.S.: 1.9 percent in Finland, 2.8 percent in Australia, 3.3 percent in the U.K., 4.1 percent in Canada, and 5.6 percent in Germany. The average administrative costs as a share of total health care expenditures for these five comparison countries is 3.5 percent.” (Pp. 44-45)
“VHA physicians and other healthcare providers are salaried and don’t have a financial incentive to overtreat nor do they make money by providing unnecessary or ineffective treatments or tests. There are no for-profit middlemen… and there are no high executive salaries or expensive marketing and advertising costs.”According to Veterans for Peace,
“[The VHA] actually has an incentive to invest in prevention and more effective disease management. When it does so, it isn’t just saving money for somebody else. It’s maximizing its own resources. In short, it can do what the rest of the health care sector can’t seem to, which is to pursue quality systematically without threatening its own financial viability.”Phillip Longman, Washington Monthly
“Private hospitals, which make their money treating people who come to them sick, don’t profit from heavy investments in preventive care… But the VA, which is funded by tax dollars, ‘has its patients for life,’ notes [Kenneth Kizer, a hard-charging doctor and former Navy diver]… So to keep government spending down, ‘it makes economic sense to keep them healthy and out of the hospital.’”Douglas Waller, Time Magazine and Newsweek
- VA Choice Program of 2014 is an effort to privatize the VHA by redirecting public funds to the private sector instead of using those funds to fill the more than 36,000 vacancies at the VHA (P. 9). Congress extended and expanded the expiring three-year Choice Program in the VA Mission Act of 2018 (P. 11)
- Per Veterans for Peace,“This Act will drain more money from the VHA by allowing veterans to use private sector providers. It also sets up an unaccountable Commission that will decide if VHA hospitals and facilities should be closed. It is entirely unfunded and every dollar that goes to private sector care will lead to staff cuts and facility closures…
- “The ideological goal of such attacks is to cripple the VHA, turn public opinion against the VHA and support outsourcing of veterans’ care to the private, for-profit healthcare system.” (P. 11)
- Rick Weidman, the policy director of Vietnam Veterans of America, points out: “There are people constantly banging on the VA, but this was the private sector that made a total muck of it.”
- ProPublica reports that “beyond what the contractors were entitled to, audits by the VA inspector general found that they overcharged the government by $140 million from November 2014 to March 2017.”
- Congress has also failed to fill the more than 36,000 vacancies at the VHA, instead opting to divert veterans and public funds into the for-profit private sector.
For additional reading, Veterans for Peace recommends: Suzanne Gordon’s The Battle for Veterans Healthcare: Dispatches from the Frontlines of Policy Making and Patient Care  and Phillip Longman’s Best Care Anywhere: Why VA Health Care WouldWork Better for Everyone (2012)
- Rep. Moulton to support Medicare-for-All
- Politico to produce a follow-up story with the facts
- Legislators to stick to the facts during committee hearings
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