Ahead of the largest primary debate in history, Mayor Pete Buttigieg of South Bend, Indiana, has added specifics—and teeth—to his proposed expansion of access to health care, in a white paper on pharmaceutical pricing that could help distinguish his wordily named “Medicare For All Who Want It” plan from similar proposals put forward by his Democratic rivals.
The plan, released on Monday morning, focuses on cutting prescription drug costs, which are higher in the United States than any other country in the world. Through a combination of new legislation, the creation of a public option, a tax hike on pharmaceutical companies, and aggressive enforcement of the government’s ability to declare “eminent domain” over intellectual property, Buttigieg’s plan markets itself as the first proposed that would cap monthly out-of-pocket costs for prescription drugs.
“This plan is aggressive on capping out-of-pocket costs for consumers and aims to shift the power from corporate health care to American consumers that rely on lifesaving drug prescriptions,” Marisol Samayoa, the Buttigieg campaign’s deputy national press secretary, told The Daily Beast. “Pete is the only candidate to cap monthly out-of-pocket costs for those on public plans.”
Sen. Kamala Harris’ “Medicare For All” proposal also promises “strong caps on out-of-pocket costs” at $200 per year, and Sen. Bernie Sanders’ bill to that effect also caps those costs. The Buttigieg campaign points out that its plan is the first to cap expenses per month, which would prevent the sudden onset of an expensive illness from wiping out savings.
The proposal could help set Buttigieg’s stance on health care apart from other upper-level candidates. Former Vice President Joe Biden, who has aggressively defended the Affordable Care Act passed under President Barack Obama, has called for pegging prescription drug price increases to inflation, as well as limiting prescription prices for Medicare and potential public-option consumers to an average of international prices. Sen. Elizabeth Warren (D-MA) has advocated for the Department of Health and Human Services to manufacture generic medication. Sen. Bernie Sanders (I-VT), like Warren, has called for the creation of a trillion-dollar “Medicare For All” system that would provide health insurance coverage to all Americans.
Buttigieg’s plan to cap monthly out-of-pocket costs is still a relative novelty in the crowded battle arena of Democratic health care proposals—although Harris has stated publicly that her plan would cap such expenses at $200 per month, that language doesn’t appear in the plan posted on her campaign’s website. Under the proposed plan, out-of-pocket costs for seniors using Medicare would be capped at $200 per month, and at $250 per month for those on the “Medicare For All Who Want It” public option. For seniors, those on Medicaid assistance, and public-option consumers, copays for generic medication would be eliminated.
Although most Americans don’t spend that much in a year on out-of-pocket expenses, the caps would provide major relief for the elderly and those with serious and chronic illnesses. Twenty-nine percent of Americans report not taking medications as prescribed due to cost in the past year, including one in five who have not filled a prescription because of high prices and one in 10 who have skipped doses or cut pills in half to stretch their medication.
Buttigieg’s plan, like those of his chief rivals, would also empower the government—the largest purchaser of pharmaceuticals in the world—to negotiate drug prices for consumers on government health plans, what the campaign calls “Walmart logic,” allowing for lower drug prices across the board.
For pharmaceutical companies that refuse to comply, Buttigieg puts forward a host of potential punishments, including taxes on companies that refuse to negotiate pricing or raise drug prices by more than inflation. For so-called “worst offenders,” Buttigieg proposes that the government exercise the right of eminent domain to acquire intellectual property rights from pharmaceutical companies found to be harming consumers through “irresponsible pricing.”
This sharp-elbowed approach to pharmaceutical companies, which are the most profitable companies in the entire health-care sector, also has the potential upside of dulling attacks that the mayor’s popularity with health-care industry donors might steer policy—in addition to setting Buttigieg’s plan apart from his rivals.
But the plan still has potential weak spots. Buttigieg’s plan would not be able to automatically guarantee universal coverage for all who live in the United States, unlike Warren and Sanders’ proposals, although there are provisions in the plan that would help fill the gaps of individuals who can’t afford employer-based coverage or who live in states that have refused to expand Medicaid. Those who can’t afford insurance through employers would receive income-based subsidies for the public insurance option, and those in states that have not expanded Medicaid will be automatically enrolled.
Despite its crackdown on the pharmaceutical industry’s pricing practices, the plan would also still allow for private insurance, which progressives have called to eliminate, although Buttigieg has proposed subsidizing coverage for those who are uninsured for financial reasons.
Buttigieg has also contended that the existence of a superior public option, under the government’s imprimatur, would eventually lead to more Americans ditching inferior private plans.
“We don’t have to stand up here speculating about whether the public option will be better or Medicare-for-all will be better than corporate options. We’ll put it to the test,” Buttigieg said at the Democratic presidential debate in September. “If people like me are right, then the public alternative is going to be not only more comprehensive but more affordable than corporate options around there. We’ll see Americans walk away from the corporate options into that Medicare option and it will become Medicare-for-all.”
Biden, Warren and Sanders have all joined the call for the government to be able to negotiate drug prices for Medicare with pharmaceutical companies in the same way that insurance companies do. But the South Bend mayor has said that his proposal would allow for consumers to choose health care that best fits their needs, while still reforming a health-care system where Americans pay roughly $600 more per year for prescription drugs citizens of other developed countries.
“The problem, Senator Sanders, with that damn bill that you wrote, and that Senator Warren backs is that it doesn’t trust the American people,” Buttigieg said at last month’s presidential debate. “I trust you to choose what makes the most sense for you—not my way or the highway.”