Democrat Abdul El-Sayed proposes universal health care for Michigan

Jonathan Oosting
The Detroit News
FILE - In this Aug. 8, 2017, file photo, Dr. Abdul El-Sayed talks with citizens in Detroit. Second-term Gov. Rick Snyder's impending departure under term limits has led four Republicans and three Democrats into a battle to follow him. The Democratic side features former Senate Minority Leader Gretchen Whitmer and two candidates who have never held elective office: businessman Shri Thanedar and ex-Detroit health director Abdul El-Sayed. (AP Photo/Carlos Osorio, File)

Lansing — Democratic gubernatorial candidate Abdul El-Sayed wants to make Michigan the first state in the nation with its own Medicare-for-all government health insurance system under a proposal he unveiled Wednesday.

The former Detroit health department director and trained medical doctor wants to raise taxes on large businesses and individuals to pay for a universal “Michicare” plan he says could produce significant health care savings for families and employers.

“This is an opportunity to stand up for health and human rights, to give health care to 600,000 Michiganders who have been locked out of the system," El-Sayed told The Detroit News ahead of a mid-day press conference.

The plan would “do away with things like co-pays, deductibles and premiums, which are tools the insurance companies use to extract value out of the health care system,” he said.

The plan also potentially could cost billions of dollars to implement and administer for state government. El-Sayed declined to share any cost or proposed tax revenue projections beyond what he estimates could be $5,000 a year in health care-related savings for an average Michigan family.

Single-payer health care — or government-subsidized health care — is an increasingly popular idea among Democrats, especially the progressive wing of the party. El-Sayed’s detailed proposal might help him stand out in his primary race against Senate Minority Leader Gretchen Whitmer of East Lansing and Ann Arbor entrepreneur Shri Thanedar.

Vermont U.S. Sen. Bernie Sanders, who won Michigan’s 2016 presidential primary over eventual Democratic nominee Hillary Clinton, is a leading advocate for a federal Medicare-for-All type program.

El-Sayed’s state version would cover all Michigan residents, until the age of 65, when traditional Medicare coverage kicks in, according to his campaign. But it would continue to provide additional prescription drug, vision and dental coverage for seniors.

To pay for it, El-Sayed is proposing a new 2 percent tax on gross receipts for businesses with fewer than 50 employees and a 2.25 percent tax for businesses with more than 50 employees. But first $2 million in receipts would be tax exempt, meaning about 75 percent of all Michigan businesses would not be subject to the tax, he said.

The Shelby Township Democrat also wants to move to a graduated income tax. His plan calls for raising the state's 4.25 percent personal income tax to 5 percent for the lowest earners and up to 8 percent for the state’s wealthiest residents. The increase would be administered through a payroll tax deducted from employee wages.

Moving to a graduated income tax would require voter approval for an amendment to the Michigan Constitution. Other elements of the plan could require sign off by the state Legislature, currently controlled by Republicans, or GOP President Donald Trump’s administration.

Despite the potential road blocks, El-Sayed said he’s confident it's "possible" the plan could be law and noted fall elections could dramatically reshape political power in Lansing.

“We’ve got an opportunity here to put policy ahead of politics, to present a plan that Michiganders want and that will save Michiganders money,” he said. “We’ll worry about the political reality after that.”

El-Sayed's "Michicare" coverage would be based on required essential health benefits outlined in the federal Affordable Care Act insurance law, including outpatient, emergency and hospital care, maternity and newborn care, reproductive health, mental and substance abuse care, prescription drugs and rehabilitative services.

Michigan residents could still choose to purchase private health insurance to supplement the Michicare program, and business could also offer supplemental health insurance to their employees if desired.

The average Michigan family making $48,432 a year would save almost $5,000 a year on insurance, out-of-pocket health costs and auto insurance, which could get cheaper if unlimited medical benefits are not required, according to the El-Sayed campaign.

Conservative critics, including health policy analysts at the Heritage Foundation, have warned that a federal single-payer health care system would turn health insurance into a “government monopoly” and curb competition that can control costs.

"Even if something like that gets on the ballot, it will be an even more difficult sell to the public," James Hohman, director of fiscal policy at the free-market-oriented Mackinac Center for Public Policy, said of El-Sayed's state-level plan. "I can’t imagine a lot of voters will be happy to pay higher taxes in order to pay for wealthy people’s health care costs."

Several states have considered single-payer health care proposals, but none have taken hold. Colorado voters rejected an initiative in 2016. Vermont enacted a law in 2011 but abandoned the plan in 2014, citing large tax increases that would be required to fund the plan.

Whitmer, who has locked up most union endorsements and establishment support in the Democratic primary, has not endorsed single-payer health care. El-Sayed has criticized her over a campaign fundraiser hosted by executives at Blue Cross Blue Shield of Michigan, the state's largest private health insurer.

Her campaign declined to comment directly on El-Sayed’s plan but said Whitmer believes every Michigan resident “deserves access to quality and affordable health care.” A spokesman noted she worked across the aisle with Republican legislators and Gov. Rick Snyder to expand Medicaid eligibility under the Affordable Care Act.

Whitmer is “the only candidate in the race who has actually expanded coverage for Michiganders,” said Zack Pohl. “As governor, she will take on Trump and Republicans who threaten our health coverage and protect people with pre-existing conditions. She's ready to work with anyone who's serious about expanding coverage and lowering costs for Michigan families."

Thanedar, a wealthy Ann Arbor entrepreneur, has expressed support for a single-payer health system and last week a unveiled universal child care proposal to be paid for through tax increases.

“It’s time we gave families access to affordable child care, early education opportunities and a livable wage that will open the door to women re-entering the workforce and growing our economy,” Thanedar said last week.

El-Sayed, trailing in Democratic primary polls, said his campaign has consistently proposed “concrete solutions to a real set of problems,” including health care costs and coverage.

 “We’re confident that Michiganders are looking for people who aren’t interested in talking points or serving the big corporations or their own millionaire status,” he said. “They’re looking for people who have only been public servants.”