A. The Evolution toward a Social Solidarity Ethic in American Health Care Law

Other countries have developed collective financing and administration schemes built on a principle of mutual aid.Reference Jost5 In the U.S., however, a decentralized, free-market approach highly deferential to individual choice and personal responsibility has prevailed.Reference Starr6 In the early twentieth century, health care providers organized themselves into prepaid insurance plans and employers began to offer health coverage as a benefit to workers.7 In 1965, the federal government created Medicare and Medicaid to cover three overlapping groups who were left out of our market-driven private insurance system: people of retirement age, people with qualifying disabilities, and children and some adults living in low-income households who were deemed deserving of public support.Reference Jost8 Government administrators took a relatively hands-off approach to prices and utilization, eschewing the negotiating power that publicly-administered programs elsewhere in the world exert to check rent-seeking by providers, and thereby allowing private insurers to reap substantial profits.Reference Anderson9

As Deborah Stone has argued, the private health insurance on which most Americans rely fosters in people “a sense of their difference, rather than their commonalities, and their responsibility for themselves only, rather than their interdependence,”10 leading to the fragmentation of “communities into ever-smaller, more homogeneous groups.”11 Although private health insurance is subsidized through laws that exempt health care benefits from payroll and income taxes,Reference Jost12 the relatively well-off households who disproportionately benefit from these indirect subsidies are protected from the stigma that attaches to dependence on public benefits.Reference Huberfeld and Roberts13 Moreover, reliance on private markets to dictate the distribution of health care goods and services has allowed Americans to avoid difficult public deliberations over which people and which conditions should trigger collective responsibility for health and well-being.14

In some ways, the ACA was a fairly modest extension of what came before. Its primary goal was to achieve “universal coverage” — a source of third-party funding for health care costs — rather than fully securing universal access to care. The ACA’s core compromise on coverage preserved the existing fragmentary mix of public and private sources, rather than replacing it with a truly universal and unified system.Reference Noble, Chirba and Mariner15 It excluded undocumented immigrants and (after the Supreme Court’s decision in NFIB v. Sebelius16) many people living in states that have rejected federal financing to expand Medicaid eligibility remain uninsured. The ACA subsidized private insurance rather than dismantling it.

In other ways, the ACA was a watershed moment that reflected and reinforced a general trend away from actuarial fairness in American health care. It expanded Medicaid eligibility beyond the groups who have traditionally been understood as the “deserving poor” (children, pregnant women, and people with disabilities). It offered direct subsidies to make private insurance more affordable for additional low- and middle-income households. It fundamentally altered the free-market business model of health insurance — in which each paid according to her likely needs — by sharply limiting underwriting-based factors related to health status in the individual and small group markets. These developments simultaneously signal the emergence of a new approach emphasizing a social solidarity ethic and pave the way for its fuller realization in social solidarity outcomes.Reference Baker17

B. Reforms’ Goals and Objectives

This philosophical evolution brings us to the current moment in health reform: one decade into the Affordable Care Act’s implementation, experience with the limitations of the ACA’s approach has focused national debate on how to transcend those limits. Most Americans wish to preserve the ACA’s progress.18 The populace also recognizes a need for further reform, but diverges on the best approach and the role that government should play.19

A slight majority of Americans now for the first time support the basic idea of a single national health plan, though that majority also belies a deep divide along partisan lines and varies with the terminology used to describe a national plan.20 Public support for expanded national health care finance has prompted progressive lawmakers to introduce proposals for implementing single-payer systems at the national and state levels.Reference Fuse and McCuskey21 Every Democratic candidate in the 2020 presidential race supported expanding public finance of health care either through a single-payer model (e.g., Medicare for All) or expanding access to existing public programs by creating a buy-in option (e.g., Medicaid or Medicare public option).Reference Oberlander22

The stated goals of these single-payer and publicoption proposals reflect some consensus among supporters about what needs fixing in the current system, and how they believe expanding access to publicly financed health care will help. Health reform momentum from the political left currently coalesces around three intertwining objectives: Improving population health, achieving universal and equitable access to care, and controlling health care costs — both for the country and for households.

Proponents of federal Medicare and Medicaid expansions point to evidence that America spends more on health care than its economic peer nations, but does not deliver better health outcomes at the population level.23 The version of Medicare for All introduced in the U.S. House in January 2019 would require annual data collection and reporting on population health outcomes and disparities, state-bystate. 24 State-level reforms also target better health outcomes at the population level.25

Focusing on improvement in population health outcomes and identifying the social determinants that influence those outcomes points to the related objective of establishing meaningful, equitable access to good health care. Universal coverage for all Americans is a top priority for supporters of a national health plan,Reference Starr26 and was a goal of the ACA.27 The stated objectives of single-payer and public-option reforms push beyond universal coverage toward solidarity, often expressed in terms of a universal right to health care,28 not merely universal access to health insurance.

Proponents of expanded national health care highlight cost-control as a primary goal of reform. Controlling health care “costs” requires effort on two fronts: national and household.Reference Reinhardt29 On a broad scale, health reforms aim to reduce the drain of health care spending on the national economy by lowering the net costs of health care from all sources, especially spending through government programs. Relatedly, proposals seek to reduce the financial drain of health care on individuals and households by lowering out-of-pocket spending on premiums, deductibles, copays, coinsurance, and uninsured care. The ACA’s multi-payer reforms slowed the growth in health care spending for the first time in decades, but its very limited progress controlling costs for individuals and households has opened the door to wider support for single-payer reforms.30

Even before the ACA, the American public was concerned with similar objectives for reforming the health care system: expanding coverage, decreasing individual and governmental costs, while maintaining quality and choice in care.Reference Berk, Gaylin and Schur31 The new post-ACA majority, which favors some version of a national health plan, reflects a long evolution toward the ethic of social solidarity in health care.32 At the same time, frustration with the U.S. health care system — from surprise medical bills to health policy instability to pandemic preparedness — makes for a zeitgeist in which Americans generally agree on ends but struggle to find consensus on means.

A. Federalism

Health care regulation in America must account for both state and federal policymakers and their fluid, regionally-sensitive political relationships. In particular, the sovereign powers of states within the American federal system — and the prevailing narratives of deference to them — have shaped the trajectory of health care regulation in ways that divide (and thereby undermine social solidarity) on a national scale and diverge from other countries’ experiences. This “federalism” fixture we have identified refers to both the American system of dual sovereignty between the national and state governments established by the Constitution,33 and the political and jurisprudential narratives of comity and deference to state authority that drive federal policies and their implementation.Reference Gluck and Huberfeld34 The duality and malleability of American federalism arms opponents of solidarity in health care with legal weapons to challenge both the establishment of nationwide reforms in the name of deference to states, and to challenge the establishment of individual state reforms in the name of preemptive national uniformity.

Solidarity and federalism can coexist, as they do in other countries, and the U.S. Constitution’s federalism structure is not unavoidably antithetical to social solidarity.Reference Resnik35 The Constitution’s enumeration of federal legislative power ostensibly limits the federal regulatory spheres,36 while the Tenth Amendment reserves the mass of un-enumerated regulatory powers to state governments.37 When Congress makes federal law within its enumerated spheres, the Supremacy Clause subordinates conflicting state laws through preemption.38 Modern constitutional jurisprudence comfortably extends federal legislative power to cover the establishment of a universal, nationwide health plan and the levy of various taxes to fund it.Reference Leonard39 On that same constitutional foundation, federal law has built the dominant share of the existing health care regulatory infrastructure since World War II, through Medicare, Medicaid, ERISA, HIPAA, and the Affordable Care Act.Reference McCuskey40

American federalism’s delicate political accounting for state autonomy has obstructed the path toward a full embrace of social solidarity. Federal reforms do not necessarily need to cede power to state preferences or rely on state implementation, but Congress frequently does so voluntarily to achieve limited political consensus.41 Even with such concessions, resistant states or other opponents of federal policies have not been shy about challenging the boundaries of federalism through litigation. Courts’ inconsistent reliance on a narrative of comity and deference to states has further complicated efforts to establish national protections.42

Deference to states’ autonomy, even within a federally-funded regulatory infrastructure, can entrench existing disparities between states and the populations that inhabit them. The Medicaid program, for example, employs a cooperative federalism design in which states choose whether to implement the program and may negotiate states of some of the terms on which they will receive funding. Statutory waivers enabled some states to pursue more expansive solidarity models and extend coverage to all low-income residents. The federalism narrative of state autonomy versus federal coercion in NFIB v. Sebelius, by contrast, enabled states governed by those hostile to solidarity to reject the ACA’s federal Medicaid expansion and emboldened them to negotiate waivers that undermine social solidarity goals, such as imposing work requirements.Reference Watson43

Other key features of the ACA intentionally deferred to state authority in the process of national reform,44 diluting the statute’s universal coverage strategy. Reliance on state implementation of the exchanges and the provision of a waiver for states to deviate from certain national protections in the name of “State Innovation” serve as two prominent examples,Reference McCuskey45 while the resort to state definitions for federal essential health benefits represents another.Reference Bagley and Levy46 Political bargains struck in the spirit of voluntary deference to the states have spurred opportunistic variations in policy and exacerbated some interstate disparities,Reference Griffith, Evans and Bor47 offsetting gains in health equity produced by more durable federal baselines.48 For example, in 2018 HHS issued guidance stating that it would base state waiver decisions on a measure of whether the state plan would preserve a level of “access to” coverage, rather than actual enrollment in coverage.49 Those solidarity-diluting concessions do not insulate federal statutes from direct attacks through state litigation, either, as illustrated by state attorney general litigation against the ACA.50

These developments illuminate the federalism fixture’s pliability. Federalism can be wielded in ways that reinforce state autonomy or deny it.Reference Nathan51 Similarly, state power does not act intrinsically for or against social solidarity, but depends on the preferences of those wielding it. State autonomy may frustrate federal law’s efforts to establish nationwide protections. But the preemptive power of federal law can hinder state experimentation with solidarity-enhancing policies. For example, the federal Employee Retirement Income Security Act of 1974 (ERISA) preempts states from enforcing regulations that impermissibly “relate to” the employer-sponsored health benefits, a major deterrent to states wishing to pursue their own solidarity-enhancing reforms.52

B. Fiscal Pluralism

Fiscal pluralism is another distinctive fixture of American law that influences the attainability and shape of social solidarity when it comes to Americans’ health. By “fiscal pluralism,” we mean a tendency to divide costs associated with Americans’ sickness and health into separate, fiscally disintegrated categories. Sometimes referred to as “fragmentation,” we refer to this phenomenon as “pluralism” to highlight the underlying tendency toward division, which produces fragmentation. Fiscal pluralism impedes the realization of solidarity by giving decisionmakers — providers, patients, caretakers, and policymakers — economic incentives to ignore the impact of their choices on benefits and burdens in fiscal categories for which they are not responsible. (In economic terms, it creates positive and negative externalities.)

Consider the division of responsibility for health care costs incurred by individuals who become sick. States pay a share of health care costs incurred by Medicaid enrollees and lose income tax revenues not paid by sick residents or caretakers who forego paid work in favor of care work.53 The federal government pays a large share of health care costs for Medicare enrollees54 and pays a significant share of health care costs for Medicaid beneficiaries, TRICARE beneficiaries, ACA enrollees, and employees enrolled in group health plans (which are subsidized in part by federal tax expenditures).55 Private companies pay a large share of health costs for employees and their dependents via health benefits. Though employers pass much of this cost on to employees in the form of reduced wages, the employees subsidize each other’s costs. Patients pay a significant share of their health care costs through cost sharing, in addition to secondary costs of illness including lost wages and reduced resources for housing, transportation, or nutrition.Reference Hoffman56 Finally, loved ones of patients pay a significant share of health care costs through unreimbursed care work, as well as contributions toward financing uncovered or unaffordable treatments.57

Consider also the different division of responsibility for upstream health investments which might reduce the costs of cure and sickness among numerous actors and categories. Although governments (state and federal) may fully fund health care investments, they choose piecemeal which investments to pursue. Government costs are often further fragmented at the level of individual actors or programs. Federal budgeting rules, for example, treat “mandatory” expenditures on programs like Medicare and Medicaid as distinct from “discretionary” expenditures on programs like the SUPPORT Act’s funding for substance use disorder treatment and recovery.Reference Schick58 These rules require that increases in mandatory spending be offset by decreases in mandatory spending, and that increases in discretionary spending similarly be offset by discretionary decreases.59 Similarly, state spending is often separated by department and program; Elizabeth Weeks’ recent work has shown the many different dimensions on which states and localities have been impacted financially by the opioid crisis.Reference Weeks and Sanford60 Moreover, individuals, families, employers, and charitable organizations pursue a variety of health investments.Reference Nichols and Taylor61

This fiscal pluralism encompasses byproducts of other fixtures of American law. Federalism divides between federal and state; privatization divides between government and the market; emphasis on individual rights and responsibilities facilitates the continuing invisibility of care work relative to other more visible components of patient care.Reference Fineman62 Fiscal pluralism nonetheless takes a form distinct from the other fixtures and captures a descriptive account of the health care finance system that opponents of single-payer reforms raise as normative support for the status quo. Pluralism can be desirable in certain contexts: in a market where unification means competition- stifling monopoly; to particularly vulnerable populations, who may benefit from distinctive treatment and a separate “risk pool” in order to receive care tailored to them and promote equity; to classical liberals who favor the idea of an autonomous, independent individual as a societal building block; and to experimentalists who see in pluralism the potential for continual learning and improvement through diversity.Reference Dorf and Sabel63

C. Privatization

Preference for private markets over government intervention is the foundation of the US economy, a fixture of American law, and an obstacle in the path of social solidarity in American health care. Collective choice of the goods and services essential for human well-being, and collective financing to secure such goods and services, is typically viewed as an exception requiring justification, rather than the norm.

Most Americans are covered by private health insurance,64 and most of them pay for coverage jointly with an employer as a fringe benefit. The longstanding favorable tax treatment of these benefits subsidizes private insurance.Reference Gruber65 ERISA also encourages large private employers to offer health benefits by shielding them from state regulation.66 The ACA doubled down on private health insurance as the predominant model. Rather than further extending public programs, the ACA established new tax credits for the purchase of private coverage on the exchanges.67 In addition, the ACA’s employer mandate68 and restriction of premium-assistance tax credits to households that lack access to affordable employer-based coverage strengthened the link between health insurance and employment.

Private health insurance companies play an important role in public programs, too. From its inception in 1965, Medicare has relied on private insurers to issue coverage determinations governing which goods and services are covered for which patients and to process claims for reimbursement.69 The Balanced Budget Act of 1997 took privatization of Medicare further by giving beneficiaries the option of enrolling in one of many government-contracted private health plans.Reference Connelly, Healy, Melnick and Roosevelt70 When Medicare benefits were expanded to include prescription drugs in the Medicare Modernization Act of 2003, Congress dictated that these benefits could only be provided through fully privatized plans.71 Currently, about one-third of Medicare beneficiaries are enrolled in private Medicare Advantage plans. And for the two-thirds of beneficiaries enrolled in traditional Medicare, day-to-day coverage decisions are made by private insurance companies.

Private health insurance companies play an even bigger role in Medicaid, with about 70% of all Medicaid enrollees covered by Medicaid Managed Care plans,72 the vast majority of which are run by private insurance companies.73 States first began to experiment with privatization via administrative waivers under Section 1115.Reference Buck74 The Deficit Reduction Act of 2005 gave states the option of offering alternative Medicaid benefit packages — all of which are subject to far more flexible federal oversight and most of which are privately administered — for specified groups of Medicaid beneficiaries without any need for a waiver.75 When the ACA expanded Medicaid eligibility, it specified that the expansion population must be covered through alternative benefit plans.76

Our fragmentary system of private and public administration has allowed lucrative and highly segmented private markets for health care goods, services, and coverage to thrive. By relying on private companies to make coverage determinations — even in public assistance programs — lawmakers have eschewed opportunities for deliberative, democratic, collective problem-solving on the essential question of which individuals will be allowed affordable access to which treatments for which conditions. Although underwriting reforms that restrict individualized rate-setting and eligibility determinations by private insurance companies have shifted us closer to collective financing based on a principle of mutual aid, the multitude of privately administered risk pools and reimbursement arrangements stymies the realization of true solidarity in American health care.

D. Individual Rights and Responsibilities

The emphasis on individual rights and its converse, personal responsibility, are another foundational aspect of American law. Both forms of individualism challenge the realization of social solidarity in health care; assertions of individual liberty have been used to limit the government’s ability to effectuate universal health reforms, and notions of personal responsibility have enshrined individual cost-sharing as a central feature of health care consumption despite limiting access and affordability.

Without a positive right to health care under the U.S. Constitution, individual rights are expressed as the negative right to be free from government interference in health care decisions. The focus on individual liberties as a limitation on governmental regulation, however, has proven a formidable obstacle to health reform efforts intended to promote solidarity.

The fixture of individual liberty manifests as legal limits on Congress’s ability to require individuals to participate in commerce, including the purchase of health coverage. In NFIB v. Sebelius, the Supreme Court held that Congress lacks the power under the Commerce Clause to enact the ACA’s individual mandate, which required most people to purchase a minimum level of insurance coverage or else pay a penalty,77 concluding, “The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce.’”78 Although the Court upheld the individual mandate as a tax, Congress in 2017 effectively nullified the individual mandate by zeroing out the penalty.79 The saga over the ACA’s individual mandate illustrates the view that an individual’s right to be free from federal governmental coercion supersedes Congress’s authority to provide for comprehensive health coverage through commercial regulation.

In a similar vein, the clash between individuals’ religious liberty and comprehensive health reform has generally been resolved in favor of the right to opt-out of health care obligations based on religious objections. In Burwell v. Hobby Lobby, the notion of individual religious liberty was extended to include the rights of closely held private corporations to opt-out of compliance with the ACA’s so-called contraceptive mandate,80 when covering contraception conflicted with the corporate owners’ religious beliefs.81

Both NFIB and Hobby Lobby illustrate how an expansive notion of individual liberty, particularly in the commercial sphere, complicates and limits the regulatory mechanisms available to the federal government to achieve social solidarity in health care. Like vaccination’s herd immunity, efficient health care financing and optimal population health are undermined by fragmentation and improved through universality, so recognizing a strong right for natural or corporate persons to opt-out of components of a national health care system — whether for ideological, commercial, or religious reasons — limits the ability of the federal government to effectuate solidarity in health care.Reference Sepper82

The flipside of individual liberty is an emphasis on personal responsibility that has driven a push for consumerism in health care. Giving individuals more “skin in the game,” so the theory goes, will make them more frugal consumers of health care and encourage them to make healthier choices.Reference Pauly83 Doing so also perpetuates anti-solidarity norms of actuarial fairness, even in government-financed health coverage that requires cost sharing. The ACA encouraged consumerism by continuing to fuel the rise of high-deductible health plans.Reference Wharam and Rosenthal84 A consumer approach, however, ignores the realities that patients are largely unable to act as consumers due to widespread market failures and non-shoppability of health care and that many illnesses or conditions are not manageable with lifestyle changes.Reference Hall and Schneider85 As a result, though insurance coverage increased under the ACA, a growing number of people are underinsured, driving a health care affordability crisis.86 Public opinion may be turning against consumerism as a panacea to health system dysfunction, but the narrative of personal responsibility and a stubborn faith in markets remain embedded in debates over how to distribute health care resources and control system costs.

A. State or Federal Control

Any legislation seeking to establish universal health care will confront the fixture of American federalism in deciding what ratio of federal and state authorities should administer it and what mix of regulatory baselines and regional variations to employ. A high degree of confrontation in federal legislative design relies heavily on federal authority and control, cedes little to state variation, and explicitly preempts or supplants existing spheres of state regulatory power. For this uniformity, a highly-confrontational design trades away some of the accountability, adaptability, and potential for experimentation from shared state-and-federal control. Reforms with a low degree of confrontation with the federalism fixture, by contrast, mitigate their expansions of federal authority with state implementation, expressly preserve existing state authority, and fund state variations on federal policy by encouraging them to negotiate statutory waivers. For this cooperation and adaptability, a minimally-confrontational design trades away some of the solidarity-enhancing potential of national standards.

The ACA’s incremental approach to the existing multi-payer system internalized federalism’s prevailing narratives, largely demurring to the federalism fixture, even as it enacted some important nationwide reforms. The portions of the ACA that confronted federalism by establishing strong nationwide rules — like the availability of subsidies to purchase insurance and the requirement that commercial insurers offer policies to anyone who can pay for it on the exchange — have had the greatest impact on overall population health and household cost-control. Those portions that invite state variation and negotiation, such as the Medicaid expansion (after NFIB v. Sebelius) and the waiver provision for “State Innovation,” have curtailed those gains in some states.90

The national single-payer system contemplated in Medicare for All proposals confronts the federalism fixture directly in ways the ACA declined to do.91 Medicare for All would make federal finance and administration the sole source of health care payment.92 This would subsume most, if not all, of the Medicaid program and thereby eliminate a cooperative-federalism program in favor of a fully-federal one. “In addition to transferring fiscal responsibility” from state to federal control by shuttering Medicaid, “the [Medicare for All] proposals would shift the role of designing and implementing much of health policy from states to the federal government.”93 Further, Medicare for All extends federal financing authority and control over the entire commercial market for health insurance, still regulated in significant part by state authorities. By eliminating private insurance, Medicare for All proposals directly confront federalism by eliminating this longstanding area of state regulation and source of state-by-state variation.94

Proposals that preserve the multi-payer system, but add an option to buy into a public program confront federalism to a lesser degree by retaining the heavily state-regulated private insurance, while potentially expanding the portion of the population covered by programs under federal control. The choice of which government program to expand — Medicare buy-in versus Medicaid buy-in — also has implications for the degree of federalism confrontation. Medicare buyin confronts federalism to a higher degree because it expands public participation in a program that is entirely under federal control. Medicaid buy-ins offer slightly more concession to state variability because they extend a program that already admits state-bystate variation. Federal legislation could alter the baseline structure of the Medicaid program to make a buy-in a mandatory feature of Medicaid, though such a provision would have to contend with the anti-state coercion precedent from NFIB v. Sebelius.95 Medicaid buy-in proposals that would make a buy-in an optional feature for participating states96 additionally accede to the federalism fixture and dilute the solidarity- enhancing effects of a public option.

To be feasible, universal reforms enacted at the state level — as illustrated in Figure 2 — must adapt to the strictures of federalism, rather than confronting them directly.97 Federal legislation may invite state participation through funding programs and by delegating implementation of other aspects of federal law. State legislation, however, generally has no mechanism to invite additional federal control except by incorporating existing federal standards. Similarly, states have few mechanisms to diminish federal control, except by complying with federal law. When state regulation treads on spheres of federal authority or contradicts duly-enacted federal law, preemption negates the state law.Reference Wiley98 State-level proposals for single-payer systems or state Medicaid buy-ins thus tend to work within of existing federal programs, using existing federal waiver provisions to “repurpose” federal funding streamsReference McCuskey99 and seek federally-authorized variations.Reference Brooks100

B. Federal, State, or Private Financing

A central question in designing a health care system is “who pays?” Potential payers include individuals and families, employers, providers, the community, states, or the federal government. For example, most Americans are today enrolled in employer-sponsored insurance that is paid in part by them and in part by their employers.101 Meanwhile, half of births and nursing home stays are paid for in part by the states and in part by the federal government through the Medicaid program.

The “who pays” question is incomplete without also asking “and for what?” Our system separates health care coverage costs by types of risk and divides riskbearing among entities. With high deductibles, individuals bear the risk for routine medical care. The risk of illness is divided between the insurance plan (which pays for most medical care, less cost sharing) and the sick individual and her family (who pay for cost sharing, lost wages, and home care as needed), and providers (to the extent that they cannot collect on patients’ bad debt). The risk of catastrophic illness, meanwhile, can be carved off and borne by another entity like a state or federal government, as seen in the ACA’s reinsurance program.

And that is just the risks related to individual illness. A health care system must account for still more risks and, again, divides these risks among entities. The risk that the individuals who enroll in a particular insurance plan will be unexpectedly unhealthy (known as adverse selection risk) is borne by default by whoever operates that plan (and so paid for by whoever pays for it). But this adverse selection risk can be carved off and borne by another entity; for example, the ACA’s risk corridors program put some such risk on the federal government.Reference Silver and Hyman102 More broadly, the risk that an economic downturn will simultaneously increase demand for services and reduce revenue to pay for it by reducing individual incomes and the state and local tax revenues they support (known as business cycle risk) drives the design of federal and state health care programs.

The fixtures of American law generally favor this division of responsibility for health care costs, though they do not do so uniformly. Standing alone, the individual rights and responsibility and privatization fixtures both tend to favor giving individuals full responsibility for their health care costs rather than dividing such costs among individuals, employers, states, and the federal government. Professors Silver and Hyman endorse a proposal grounded in these two fixtures: give each resident a voucher reflecting federal and state health care subsidies, but then leave it to the individual to bear full responsibility for how they choose to spend those subsidies and bear the costs associated with illness.103 By contrast, the federalism and pluralism fixtures favor the dispersal of responsibilities evident in our current financing system, which assigns costs as well to states, employers, and providers.

Potential reforms all confront the fixtures by concentrating financial responsibility for health care costs to greater degrees than the status quo, though some fragmentation remains under all existing proposals. The most unitary proposal, Representative Jayapal’s Medicare for All proposal, would concentrate responsibility for all direct costs of medical care in the federal government.104 State contributions, employer contributions, and contributions by sick individuals through cost sharing would all be eliminated. Indeed, even provider responsibility for patient bad debt and costs incurred by the uninsured are eliminated, as the plan eliminates cost sharing and covers all residents, regardless of citizenship status or prior enrollment.105

That said, the proposal’s confrontation with the fixtures is incomplete in two ways. First, Jayapal’s proposal leaves sick residents and their families responsible for lost wages and care work costs, in deference to the pluralism and individual rights and responsibilities fixtures. Second, again in deference to fiscal pluralism, Jayapal’s proposal leaves fragmented responsibility for financing investments in the social determinants of health, concentrating only responsibility for the downstream medical costs that result from a lack of such investment.

Senator Sanders’ similar Medicare for All proposal accommodates the fixtures to a greater degree than Jayapal’s proposal in two ways. First, the Sanders proposal retains a role for states in financing health care costs; certain existing state contributions are locked in place through a maintenance of effort provision.106 Second, the Sanders proposal includes nominal cost sharing in the form of limited copays for certain services.107

Where the financing structure for Medicare for All confronts fiscal pluralism, the structure for the Affordable Care Act largely accommodated it by adding to the complex division of responsibility for health care costs in the American health care system. The law left in place the underlying multi-payer system and created in the exchanges a new financing mechanism paid for in part by individuals, administered in part by states, and operated largely through private insurance markets. The ACA sought to finance the costs of insurance in the individual market in part by forcing healthy individuals into risk pools with less-healthy individuals, but the individual mandate that facilitated this broader risk pooling also brought the law in conflict with notions of individual liberty.

The ACA’s framework also maintained numerous institutions that disperse responsibility for health care costs: reliance on employer sponsored insurance to cover a plurality of residents, division of federal and state responsibilities and liabilities, cost sharing borne by sick individuals (and providers when bills go unpaid), and a significant uninsured population (including non-citizen residents) whose care costs would be borne by providers (and perhaps reimbursed by the federal government indirectly through disproportionate share hospital payments). Current “public option” proposals would build on that framework, increasing the level of confrontation with the individual responsibility fixture somewhat by increasing the generosity of federal subsidies for premiums and cost sharing, without making any fundamental changes.108

C. Public versus Private Administration

Survey questions and political campaigns typically assume a stark distinction between “private insurance” and “government administered health plans.Reference Halpin and Harbage109 In reality, the line between the two is not always clear. What does “government administered” mean in a market where about one-third of Medicare enrollees and nearly 70% of Medicaid enrollees are covered by private health insurance plans? Proposals to provide public health insurance modeled on expanding Medicare or Medicaid to all must grapple with the role of private insurers, especially in light of how deeply embedded they are in our existing public programs.

The ACA took a highly deferential stance toward the dominance of private insurance. It expanded eligibility for Medicaid, but specified that the newly-eligible population must be covered by alternative benefit plans, the vast majority of which are operated by private insurers. For people earning between one and four times the poverty line, the ACA offered subsidized private insurance, rather than public coverage. A proposal to create a public option that would compete for enrollment against private plans on the exchanges was dropped from the ACA in a political compromise.Reference Abelson110

In contrast, some Medicare for All proponents confront privatization head-on by promising to eliminate private insurance.111 But what does that mean in a system that currently relies on private insurance companies to administer public benefits? Would the traditional Medicare program continue to rely on private insurance companies to administer local coverage determinations and process claims? Would the (currently privatized) Medicare drug benefit be converted to a publicly-administered plan? Would Medicare Advantage plans continue to be offered to enrollees as an alternative to traditional Medicare?

More moderate reformers propose to open access to public programs while preserving — or even expanding — the role of privatized public coverage.112 These approaches would technically enroll everyone in a single program while allowing private insurance plans to thrive within that program. Reform modeled on “Medicare Advantage for All” could allow any citizen or lawful permanent resident to enroll in the privatized Medicare plan of her choice. It could do so with or without giving enrollees the option of choosing traditional Medicare. “Medicare Advantage Buy-In” could allow privatized, government contracted Medicare plans to be offered on the health insurance exchanges alongside direct-purchase private insurance. Private insurers would bid on contracts with the federal government to offer coverage in exchange for a combination of risk-rated, capitated payments by the government and premiums paid by enrollees. Similarly, proposals to open up privatized Medicaid coverage to all state residents (“Medicaid Managed Care for All”) or as an alternative to direct-purchase insurance on the state health insurance exchange (“Medicaid Managed Care Buy-In”) would be operationalized through a bidding process at the state level, followed by an open enrollment period in which residents choose from among multiple private plans and pay a premium to supplement state funding. Indeed, “public option” reforms scheduled to be implemented at the state level within the next two years direct state agencies to contract with private health insurers to offer privatized public coverage — not traditional Medicaid benefits — to buy-in enrollees.113

Proposals to open access to privatized public coverage to all or more Americans raise crucial questions. Foremost among them: what difference would it make? Does privatized public coverage offered pursuant to a government contract offer any advantages over directly-purchased private insurance with subsidized premiums? Can privatized public coverage serve the goals adopted by single-payer and public-option proponents? Can it move us closer to social solidarity in American health care? Perhaps the most promising aspect of privatized public plans is that they could allow state agencies or CMS to use the contracting process to take a more hands-on role in shaping how health care providers are paid by private health plans. Washington state’s public option legislation, initially specified that the state-contracted plan would compensate providers at Medicare rates, which are considerably lower than payments offered by most direct-purchase and employer-based plans. State lawmakers eventually “watered down” the proposal by adopting a cap at 160% of Medicare rates, but that still represents a significant change from the status quo.114 Setting aside the potential cost savings, in terms of social solidarity, public debate over appropriate reimbursement rates brings us closer to collective problem-solving regarding unsustainable health care price increases. But caps on the reimbursement rates government-contracted private health plans can pay to providers would be a far cry from universal enrollment in a single, publicly administered, shared risk pool.

D. Degrees of Choice and Cost-Sharing

Health reforms must contend with the two sides of individualism — individual liberty and personal responsibility. The primary policy manifestations of this confrontation are the degrees of choice left to individuals to select their form of health coverage or optout altogether and of cost-sharing for individuals to retain some personal skin-in-the game for their health care consumption.