How Tom Steyer would secure universal health care coverage

Billionaire Tom Steyer's health care plan plants him among the centrists in the 2020 Democratic primary. He promises to expand access to health care through more Obamacare funding and a public option, while still envisioning a large role for private insurers — in contrast to the "Medicare for All" plans proposed by rivals like Sens. Bernie Sanders and Elizabeth Warren.

What would the plan do?
Steyer's plan for a public option is a little different from other candidates. He envisions it as a new program where the federal government would negotiate payment rates for providers and hospitals. It would operate separately, but similarly to, traditional Medicare and Medicaid.

Medical providers would have to participate in the public option or lose their contracts with Medicare or Medicaid. The rates would be set like Medicare, with some flexibility to accommodate differences in regional costs — especially for rural areas.

Steyer also wants the government to negotiate prices with drug companies and would extend those prices to the private insurance market.

How would it work?
Anyone could enroll in the new government insurance program, including those with commercial coverage and those who are uninsured.

And poor adults who are currently left out of Medicaid because their state hasn't expanded the program could join, fully funded by the government.

Steyer stresses that he wouldn't change popular provisions of the Affordable Care Act, particularly the coverage mandates for people with preexisting conditions, and letting young people stay on their parents’ insurance until they’re 26.

He would bolster the ACA markets by extending Obamacare's “sliding scale” financial assistance to people who currently earn too much to qualify for premium subsidies, with a cap to guarantee enrollees don't pay more than 8.5 percent of their income for insurance.

Like other candidates’ health care plans, Steyer's would eliminate “surprise” medical bills — Washington's most fraught health care issue. His policy would set a hard limit on allowed emergency expenses and a requirement for all clinicians and labs contracted by an in-network hospital to accept the same insurance as that hospital.

What are the flaws in the proposal?

It (mostly) ignores provider costs: Like most of the Democratic candidates, Steyer blames insurers more than medical providers for spiking costs, and his plan says that with a public option as competition, prices will go down.

While providers are sure to lambaste any alternative to commercial insurers — where they can glean higher payments than from a government program with set rates — the Steyer plan says the public option payment system would run on fee-for-service. That's where hospitals and clinicians are paid for each service separately, as in traditional Medicare and Medicaid.

The government and insurers have been trying to get away from that model, since it motivates providers to overdiagnose and overtreat to run up payments — and government spending.

Potential bad blood for Medicaid expansion states: The plan doesn’t account for the people in states that expanded Medicaid who might want the public option suddenly available to those whose states didn’t expand Medicaid. The campaign contends that states that have already expanded could move those enrollees to the public option, but they'd have to sustain the same share of funding as they do now.

How much would it cost?

$ 1.5 trillion

Steyer says the plan would cost $1.5 trillion over a decade.

What have other Democrats proposed?

Sanders and Warren are headlining the Medicare for All push. Joe Biden and Pete Buttigieg both have a public option available to people in the employer market, while Amy Klobuchar's public option would be offered through Medicaid or Medicare.

Who would it help?
Steyer’s plan would offer coverage to poor adults in the 14 states that haven't expanded Medicaid under Obamacare, as well as those in the individual market who can’t afford premiums but who are shut off from subsidies.

Who opposes it?
The health care industry is largely opposed to any proposal that could lure people from the commercial insurance market — and conservatives don’t want any expansion of public coverage. But Steyer’s plan for the public option is aligned with mainstream Democratic candidates now, representing the party’s overall shift to go beyond Obamacare.