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Health care dominated early on June 26, with Sens. Elizabeth Warren (Mass.) and Cory Booker (N.J.) using questions about the economy to take aim at pharmaceutical and insurance companies. Sen. Amy Klobuchar (Minn.) emphasized the difficulties many Americans face in paying premiums.
But the candidates broke ranks on the details and not all of their claims stayed strictly within the lines.
Only two candidates — New York City Mayor Bill de Blasio and Sen. Warren — raised their hands in favor of banishing private insurance to install a government-sponsored Medicare for All approach.
Sen. Klobuchar, a single-payer skeptic, expressed concern about “kicking half of America off their health insurance in 4 years.” (That’s correct: In 2017, a majority of Americans had private coverage, with 49% getting that insurance through work, according to the Kaiser Family Foundation.)
Former Texas Rep. Beto O’Rourke, who also supports maintaining a private insurance system, outlined his own universal health care plan, based on a “Medicare for America” bill in Congress.
The single-payer talk set off other discussions about the role of health insurance and the cost of care. We fact-checked some of the biggest claims.
Sen. Warren: “The insurance companies last year alone sucked $23 billion in profits out of the health care system. $23 billion. And that doesn’t count the money that was paid to executives, the money that was spent lobbying Washington.”
We contacted Warren’s campaign, who directed us to a report from the National Association of Insurance Commissioners, a nonpartisan group of industry regulators. It supports her assessment.
The report says that in 2018, health insurers posted $23.4 billion in net earnings, or profits, compared with $16.1 billion a year prior.
This came up in the context of Warren’s support for eliminating private insurance under a Medicare for All system. However, the financing and price tag of such a system is unclear.
Sen. Booker: “The overhead for insurers that they charge is 15%, while Medicare’s overhead is only at 2%.”
This is a flawed comparison. Booker said administrative overhead eats up much more for private carriers than it does for Medicare, the government insurance program for seniors and the disabled. But Medicare piggybacks off the Social Security Administration, which covers costs of enrollment, payments, and keeping track of patients.
Also, Medicare relies on private providers for some of its programs, and overhead charges there are higher. Medicare’s overhead is less than that of private carriers, but exact figures are elusive.
The insurance companies’ trade group, America’s Health Insurance Plans (AHIP), reported in 2018 that 18.1% of private health care premiums went to non–health care services. That includes taxes of 4.7% and profits of 2.3%. The Medicare trustees reported that in 2018, total expenses were $740.6 billion, with administrative expenses of $9.9 billion. That comes to 1.3%, less than Booker said.