Michigan Democrat Bets Governor's Race on Universal Health Care

(Bloomberg) -- A Democrat running for governor in Michigan is supporting a tax increase to pay for a statewide government-run health-care system, going further than his party’s candidates in other parts of the country who are also calling for expanded coverage.

Abdul El-Sayed, a physician and former Detroit health director running in a three-candidate Aug. 7 primary, said he’ll unveil a detailed plan Wednesday that seeks to place residents with private health insurance or Medicaid into a single-payer system run by Michigan. Recent polls show El-Sayed in third place among Democrats in the primary.

The plan comes as single-payer insurance, an issue once confined to the fringes of the left, moves into the mainstream of the Democratic Party. A number of the party’s congressional candidates are embracing it, as are some of the party’s highest profile senators -- including Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont, Kamala Harris of California and Kirsten Gillibrand of New York. Liberal activists are working to make it a litmus test for Democrats seeking high office.

El-Sayed is doing what many other candidates have avoided by spelling out his plan and saying which taxes he’d raise to finance it. He said it would be disruptive to the health-care system and move many off existing plans, but emphasized that it would save money on health care for businesses and families.

“The system needs to be disrupted,” he said in an interview, describing his plan publicly for the first time. “The people that I talk to every day are deeply frustrated with the fact that the system’s forgotten about them.”

Health care is a “human right,” he said, and families shouldn’t live in fear of falling into dire financial straits to cover the cost of a serious illness.

The issue has become a flashpoint in some other Democratic gubernatorial primaries, though other major candidates have stopped short of releasing a plan to achieve it. In New York, Governor Andrew Cuomo, challenged from the left by Cynthia Nixon, has signaled support for single-payer insurance. In California, gubernatorial front-runner Gavin Newsom has championed the idea, while Democratic rival Antonio Villaraigosa has questioned its viability.

In Michigan’s race for governor, the other two Democrats are backing expanded health coverage but don’t go as far as El-Sayed. Entrepreneur Shri Thanedar vows on his website to “fight for universal health care coverage” without getting specific, while former state Senate Minority Leader Gretchen Whitmer says she’ll “work with anyone who wants to expand coverage.”

Two-term Republican Governor Rick Snyder is barred by a state term limit from seeking re-election.

In a move sure to draw fire from his Republican rivals, including front-runner and state Attorney General Bill Schuette, Ed-Sayed’s plan would raise billions of dollars from a tax on business earnings and a surtax on incomes across the spectrum, but heavier on top earners.

The single-payer plan would face opposition in the state legislature, controlled by the GOP. Democrats would have to win control of the state House, and possibly the Senate, for his plan to have a chance, he said. If the state were to approve the plan, the Trump administration would have to grant waivers from federal rules; President Donald Trump opposes single-payer health care.

“This is a serious plan, and it’s upfront about the tax increase required, which is often just an asterisk in single payer proposals,” said Larry Levitt, senior vice president at the nonpartisan Kaiser Family Foundation. “A single payer plan like this has the potential to provide universal coverage while saving money.”

Levitt said financing the program would mean paying higher taxes in place of premiums, deductibles and co-pays. Low income residents would probably pay less and wealthier families more, he said.

The proposal is unlikely to succeed given a maze of obstacles, especially at the state level, said Timothy Jost, a professor emeritus of health law at Washington and Lee University School of Law. He said that any single payer system would probably need to be implemented at the federal level, where it’s opposed by Republicans and many Democrats.

El-Sayed said advocates of single payer systems in Vermont and California haven’t succeeded because they weren’t upfront about the tradeoffs and "failed to properly message this and build public support."

He said the success of his plan will depend on whether he and his supporters could successfully counter criticism from conservatives, industry groups and Michigan residents skeptical of losing their plans.

“It will take time," El-Sayed said. "It will take a steady push to move this public conversation.”

To contact the reporter on this story: Sahil Kapur in Washington at skapur39@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Justin Blum, Laurie Asséo

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