Centrist Democrats Keep Making Awful Health Reform Proposals

Whenever someone goes to the doctor, the bill they receive is paid either directly by them out of pocket, by their insurer, or through some combination of the two. The precise payment mix is determined by the cost-sharing rules contained in health insurance plans, which vary from policy to policy.

The Affordable Care Act established a list of ten essential health benefits (EHBs) that must be covered entirely by health insurers without any out-of-pocket cost-sharing for individuals. The Searchlight proposal would simply add primary care services as the eleventh EHB.

To evaluate the significance of this proposal, we need to know what percentage of current health spending goes to primary care services that are paid for out of pocket. The short Searchlight paper does not provide a definition of primary care services. So, for my analysis, I have adopted the definitions used in the Milbank Memorial Fund’s Primary Care Scorecard.

In the Milbank scorecard, author Yalda Jabbarpour provides both a narrow and a broad definition of primary care, which I replicate in the graph below.

Under the narrow definition — which includes general practice, family practice, internal medicine, pediatrics, and geriatrics — primary care makes up 4.5 percent of total health spending. Under the broader definition, the number goes up to 12 percent.

The vast majority of this spending (85 to 87 percent) is already paid for by insurers, not by individuals out of pocket.

When you add it all up, out-of-pocket primary care spending amounts to just 0.6 percent (narrow) to 1.8 percent (broad) of all health spending. This is a drop in the bucket, and if this proposal is implemented, households will end up paying higher premiums to make up for the increased insurer payouts, making it a wash overall with some winners and losers. This is not a bad thing to do, but it is fairly trivial in the grand scheme of things.