Idea for the working class #1: Mandate Medicare prices for private plans

Part of the Washington Monthly's new print issue package: Ten New Ideas for the Democratic Party to Help the Working Class, and Itself.

The newly published edition of the Washington Monthly magazine features Ten New Ideas for the Democratic Party to Help the Working Class, and Itself.

The need for fresh ideas is urgent. The Democratic Party’s historic bond with working class Americans has eroded. The false hope some have invested in Donald Trump and the Republican Party is sure to be dashed.

In the pages of the new Washington Monthly, potential leaders will find innovative policies which would deliver concrete benefits to long suffering working Americans.

Over the next several days in the Washington Monthly newsletter, we will be spotlighting these ten solutions.

In our first installment, today we want to focus on a health care reform proposed by our senior editor Phillip Longman which would dramatically lower health costs for most workers:

Mandate, going forward, that all employer-sponsored plans pay providers the same, or close to the same, prices Medicare does. And further mandate that employers share the enormous resulting savings with their workers.

How would this help? Longman explains:

Since 2010, health care costs for the average family of four with an employer-sponsored plan have risen by more than $13,000, or over 71 percent. Currently, the cost for individuals covered by such plans is rising by 6.7 percent a year, roughly double the official rate of inflation. No wonder so many Americans, even those “privileged” enough to have employer-sponsored health insurance, feel like the economy is not working for them.

…

It turns out that in addition to all their other faults, employer-sponsored plans are terrible at negotiating with health care providers for lower prices. That’s supposed to be one of their key functions. They are supposed to go to hospitals, doctors, and drug companies and say, “If you want to be part of our network of preferred providers, you have to give us discounts.”

Yet it turns out that on average, when people on these plans go to the hospital to have a specific procedure done, the hospital charges an average 254 percent more than they do when they perform the same operation on a Medicare patient. Hospitals also charge commercial plans more than 100 percent more for any drugs they administer, according to a massive ongoing survey conducted by the RAND Corporation.

For more on how cracking down on health care provider prices would help the working class, click here.

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