NOTE: At the end, the author raises concerns about reimbursement rates. The proposed Medicare for All system would allow physicians to negotiate with the system for reimbursement. And, it would significantly reduce what physicians are currently spending on billing as well as the headaches of dealing with so many different insurance plans and rules. If a physician opts out of the system, they can’t also operate inside the system, so it is expected the opt-out number would be low.
By Dave Roos for How Stuff Works
In the 2016 presidential race, Senator Bernie Sanders (I-Vermont) was the first candidate to float the idea of “Medicare for All,” a massive expansion of the popular government-funded health program to cover all Americans, not just those 65 and older. While hailed by Sanders’ progressive supporters, the proposal failed to gain traction with mainstream Democratic voters and was ridiculed as a wildly expensive “socialist” takeover by Republican critics.
But as the crowded field of 2020 Democratic hopefuls swells to 12 official candidates (including the 77-year-old Sanders), “Medicare for All” is now being embraced by a larger swath of politicians and voters alike. According to recent polls, 56 percent of Americans (including 23 percent of Republicans) now support the creation of some kind of “national health plan” and Sanders is no longer the only congressperson trying to pass comprehensive “Medicare for All” legislation.
In February, Representative Pramila Jayapal (D-Washington) and progressive colleagues in the U.S. House of Representatives released their own Medicare for All Act of 2019, which goes even farther than Sanders’ original 2017 bill. Not only would the Jayapal proposal do away entirely with private health insurance and require absolutely no premiums or co-pays of any kind, it would significantly extend Medicare to cover comprehensive dental, vision and long-term care.
“Our bill will cover everyone. Not just those who are fortunate enough to have employer-sponsored insurance. Not just children. Not just seniors. Not just those who are healthy,” wrote Jayapal in a statement. “It’s time to ensure that health care is a right and not a privilege, guaranteed to every single person in our country. It is time for Medicare for All.”
What ‘Medicare for All’ Is
Medicare was created in 1965 as a safety net health insurance program for older Americans. All Americans over 65 years old qualify for Medicare health coverage regardless of preexisting conditions, and Medicare covers a significant portion of the costs of doctor’s office visits, treatments and surgeries, and prescription medications, although Medicare recipients also pay annual premiums and out-of-pocket costs.
“Medicare for All” proposals like Jayapal’s would make three monumental changes to the current Medicare system:
- First, there would be absolutely no age limit — every American from newborns to centenarians would be covered by the same government-funded health insurance.
- Second, private health insurance carriers would be barred from offering plans that compete with Medicare for All. That potentially spells doom for the $1.2 trillion private health insurance industry.
- Third, patients would pay absolutely nothing — no premiums, deductibles, co-pays, co-insurance — for all covered health care services, which under the Jayapal bill include just about everything under the sun, including expensive long-term care insurance to cover nursing home stays.
Karen Pollitz, who studies health care reform and private health insurance for the Henry J. Kaiser Family Foundation (KFF), jokes that “Medicare for All” would put her out of business.
“The ‘Medicare for All’ proposals that have been discussed are very comprehensive, would cover everything you’re used to having covered in private health insurance today plus dental, vision, hearing, long-term care, nursing home care,” says Pollitz, who co-authored a 2018 policy brief on competing “Medicare for All” schemes. “You would get this red-white-and-blue ‘Medicare for All’ card, show that when you go to the doctor, and you’d get taken care of. Simple.”
What ‘Medicare for All’ Isn’t
“Medicare for All” is not “socialized medicine” like the United Kingdom’s National Health Service. Under that system, the government is not only the sole insurer, but it also runs most of the medical clinics and hospitals. That’s not the case under any of the proposed “Medicare for All” plans, which more closely resemble Canada’s health care system (also called Medicare). Doctors and hospitals would remain private businesses, but all insurance coverage — and therefore all reimbursements paid to doctors and hospitals — would be provided through Medicare.
Canada’s health care system, by the way, doesn’t cover vision, dental, prescription drugs or long-term care. Those are covered by private insurance.
And Who’s Paying for This?
“Medicare for All” is what’s also known as a “single-payer” health care system. Technically, the “single payer” will be the federal government, but where will the government get its money? New taxes, of course. Not only income taxes, but also payroll taxes, corporate taxes, excise taxes, etc.
In 2017, Medicare alone cost American taxpayers $597 billion, or nearly 15 percent of the entire $4 trillion federal budget. The projected cost of Sanders’ 2017 “Medicare for All” bill, which didn’t include expensive add-ons like long-term care, is $32 trillion over 10 years.
“That’s a lot of money,” says Pollitz. “Right now, the federal government and states together are paying almost half of the nation’s health care bill. But if we all stop paying premiums and deductibles and co-pays, there would have to be a new way to raise revenue.”
When Americans learn that the switch to “Medicare for All” would almost certainly mean higher income taxes, support for the national health care scheme drops by 23 percent. But while the exorbitant cost of “Medicare for All” is a favorite talking point of its critics, the numbers are deceiving. Americans will certainly pay more in taxes under such a plan, but they will pay absolutely nothing in premiums and other out-of-pocket health care costs.
“[American households and the government combined] are currently spending $3.5 trillion a year on health care, more than any country on the planet,” says Pollitz. If you multiply that out by 10 years, it’s $35 trillion, even greater than the cost of Sanders’ “Medicare for All” proposal. So a switch to a single-payer system could actually save money overall.
Will ‘Medicare for All’ Mean Worse Health Care?
There’s no doubt that a massive overhaul of the U.S. health care system like “Medicare for All” would be hugely disruptive. Most private insurers would go out of business. Pharmaceutical companies would lose profits as drug prices are capped. And since Medicare typically reimburses doctors and hospitals at lower rates than private insurers, there would be “winners and losers” in private medical practices, says Pollitz.
That said, there’s no indication that switching to a “Medicare for All” system would result in fewer covered treatments — in fact, Jayapal’s proposal promises the opposite — or that the new insurance scheme would result in long waits for life-saving procedures and medications.
“We don’t currently have that in Medicare,” says Pollitz. “You don’t see senior citizens queuing up for doctor’s appointments and prescriptions. It’s all quick and easy. The key question is what will those payment rates be for doctors and hospitals. The Jayapal bill doesn’t really say. That’s still a key question to be addressed and debated.”
Currently, a growing number of doctors don’t accept Medicare patients because of the low reimbursement rates and large amount of paperwork required for reimbursement. The Medicare for All Act of 2019 does allow doctors and patients to “opt out” of the single-payer system and simply pay in cash for medical services.