Could Medicare-for-All Work?

With the elections behind us and a new Congress forming, the idea of Medicare-for-All may be eating up space in newspapers and newscasts in the coming months. It’s hard to argue with the goal of providing basic health care for every American, however, the debate about how to achieve that goal calls for clear thinking.

One reason Medicare-for-All is popular is because the cost of health insurance continues to rise – and rise dramatically for people who buy their own coverage because they don’t have a health plan at work or don’t qualify for Medicare or Medicaid.

Medicare-for-All would continue the work of the Affordable Care Act which was intended to make sure every American has health insurance. About 8.8% of people, or 28.5 million individuals, still lack coverage. Medicare-for-All would close that gap.

In theory, a single payor system would cut waste, streamline care and empower the federal government to negotiate drug prices. And, the debates over covering pre-existing conditions as well as birth control would undoubtedly be resolved because the federal government would decide what constitutes ‘basic’ care and both topics were addressed in The Affordable Care Act.

MEDICARE COVERAGE IS NOT COMPELTE COVERAGE

While there may be real advantages, it’s important to understand that our Medicare program is really nothing like the single-payer programs in other countries. It is a combination of government and private programs because Medicare does not provide complete healthcare for all seniors – prescription drugs, dental and vision are not covered. Medicare beneficiaries supplement their coverage by buying Medicare Advantage plans, Medigap plans and prescription drug plans from private insurance companies.

Expanding Medicare coverage to include all of the basics literally takes an act of Congress because Congress decides on eligibility and benefits. This process creates inefficiencies – for example Medicare has a limited ability to require doctors and hospitals to get prior authorization before performing certain procedures – a process which is routine in the private sector that saves money and reduces fraud and abuse.

While leads to the idea of innovation. Can a large, federal program be innovative? Critics say Medicare-for-All would stifle innovation because a government-run system would focus largely on reducing costs and tamping down research expenses. They say many cost-saving initiatives have come from private insurers and employers. However, others say Medicare has had a key leadership role in the areas of payment reform and adding services like adult day care, in-home support services and meals to Medicare Advantage plans.

WHO WOULD OBJECT?

If the federal government created a single-payer system, many Americans might buy supplemental private plans. British citizens buy private coverage to gain access to providers and procedures not available from the government system. But supplemental plans would clearly not generate the revenue healthcare insurers enjoy today from the variety of plans they offer to individuals and through employers. The industry would obviously lobby Congress to keep their piece of the pie.

Doctors and hospitals might also object. One way Medicare controls costs is by paying doctors and hospitals up to 40% less than private insurers pay. If healthcare providers were asked to accept less for the care they provide to every patient, they might be forced to cut staff in order to maintain their income .

FUNDINGUnder a single-payor system, no one would pay insurance premiums – the federal government would pick up the tab. As an individual you would no longer pay health insurance premiums, but your taxes would go up.

While Medicare-for-All might cut health care spending by $2 trillion over a decade, it would require the federal government to collect an additional $33 trillion in taxes over that time period --- the State of Vermont abandoned a single-payer plan over cost concerns.

New York’s proposed Medicare-for-All will cost $173 billion a year; the current new York budget is $75 annually.

Trying to preserve the current system while expanding it to “all” would mean even higher taxes and/or reducing more benefits.  So, while the benefits of a single-payer system might create a utopia years from now, Americans -- especially seniors -- might object to the sacrifices required to get there.