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Government health care is overtaking private coverage

·Senior Columnist

A surge in Medicaid enrollment during the coronavirus pandemic is pushing the United States near a momentous tipping point: More people getting health care coverage through a government plan than through the private sector.

US President Joe Biden delivers remarks on the American Rescue Plan in the State Dining Room of the White House on May 5, 2021. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
US President Joe Biden delivers remarks on the American Rescue Plan in the State Dining Room of the White House on May 5, 2021. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)

Here’s the math. A record 80.5 million Americans now get health coverage through Medicaid and a related program for children. Another 64 million are Medicare enrollees. The Affordable Care Act covers about 13 million Americans, the Pentagon’s Tricare system 9.6 million, and the Veterans Administration another 9 million. There are some duplicates, such as 11 million people who get both Medicaid and Medicare, and others who have coverage through the military as well as another plan. At a minimum, about 150 million Americans get coverage through a government plan, and the number could be several million higher.

Private-sector companies covered 158 million Americans in 2019, but job losses during the coronavirus pandemic probably cut that to around 153 million, including dependents. So the number of people covered through a company plan is very close to those covered by the government. Another 5 million or so buy private coverage on their own, with no government aid, but new federal subsidies in this part of the market will probably cut that number, too.

“Our system is not nearly as private as people might think,” says Larry Levitt, executive vice president at the Kaiser Family Foundation. “The government plays a huge role in our health care system. We’re at or very close to the point where more people are getting coverage sponsored by the government than by employers.”

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Government-backed health care is not the “socialized medicine” critics associate with endless waits and shoddy care. Private-sector doctors and nurses still provide most of the care in the United States, even when Uncle Sam covers the cost. Managed care providers and health insurers still operate as middlemen in programs such as Medicare Advantage and the Affordable Care Act exchanges. The government increasingly foots the bill, however, as policymakers have offered new programs for the millions who fall through the cracks of the traditional employer-based health care framework.

The Affordable Care Act, which Congress passed in 2010, now provides coverage to 31 million Americans, through the federal and state exchanges and also through broader eligibility for Medicaid. Three Republican-backed lawsuits trying to kill the law made it to the Supreme Court, where all three failed, including the latest smackdown on June 17. The law’s durability, along with its increasing popularity, may embolden Democrats to try enacting other government health care plans.

The American Rescue Plan, which Congress passed in March, included new health care subsidies for higher-income families buying an ACA plan. That benefit will run through 2022, but President Biden and most Democrats hope to make it permanent. Other Democratic proposals include lowering the Medicare eligibility age from 65 to 60 and creating a new federal law overruling the policies of 12 Republican states that prevent low-income adults from enrolling in Medicaid, so they’d be able to join the program, as the ACA entitles them to do.

WASHINGTON, DC - APRIL 10:  Sen. Bernie Sanders (I-VT) speaks while introducing health care legislation titled the
WASHINGTON, DC - APRIL 10: Sen. Bernie Sanders (I-VT) speaks while introducing health care legislation titled the "Medicare for All Act of 2019" with Sen. Kirsten Gillibrand (D-NY) and Sen. Jeff Merkley (D-OR), during a news conference on Capitol Hill, on April 9, 2019 in Washington, DC. (Photo by Mark Wilson/Getty Images)

Incremental enhancements to existing government plans are more likely than a huge new program along the lines of Medicare for all, which would completely replace private health insurance with a government plan covering everybody. Sen. Bernie Sanders made Medicare for all a rallying cry during two presidential campaigns, but he lost, obviously, while Joe Biden in 2020 endorsed a more modest “public option” that would be a last resort for people unable to find affordable coverage anyplace else. As president, Biden has slow-rolled his public option idea, while focusing on green energy and other social-welfare programs. If Democrats mash up a huge spending bill later this year, some form of expanded health coverage could be in there. But not Medicare for all.

More government health care seems to be fine with voters. A recent Morning Consult poll found that 68% of respondents favor Biden’s public option, which, notably, leaves private insurance in place. Voters generally want new programs only if they’ll offer new benefits without taking away existing ones. Though nobody planned it that way, that’s how government-sponsored health care has evolved during the last 20 years or so.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.

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