I have written several articles on the coronavirus and on masks. A series of links have been provided at the bottom of this article for your convenience. This article will, however address a different aspect of the virus.
Medicare, which has been around since 1965, is the government-run health insurance program that covers all Americans 65 and older and is funded by taxpayers. A portion taken out of our paychecks for Social Security goes toward Medicare to cover most services like hospital stays and doctors’ visits.People on Medicare can also choose to get additional coverage from Medicare-approved private insurers to cover other services such as dental, vision and prescription drugs.
Proponents of Medicare for All want to expand this program to cover more than just Americans 65 and older. Some, such as Vermont Sen. Bernie Sanders, are pushing for Medicare to cover all citizens and lawful permanent residents, while others such as Michigan Sen. Debbie Stabenow are pushing to lower the age requirement. In 2017 she introduced a bill to allow people between 55 and 65 years old to buy into the program. Earlier this year Stabenow introduced another bill further lowering the age requirement to 50.Many of those pushing for Medicare for All believe that health care is a human right, and many supporters believe that getting more people into the Medicare system can help rein in growing costs in the US health care system.
It’s worth noting that Medicare is quite popular as it stands now. In a Gallup poll from December, of those Americans publicly insured through Medicare or Medicaid (the government’s health program that covers those with limited income), 79% say they are happy with the quality of their health care and believe that they have good to excellent health coverage.
Where did this idea start, and why is it gaining traction?
The concept of a government-funded health care system isn’t new. Efforts to provide some sort of universal health coverage in the United States date all the way to 1904, when the Socialist Party endorsed the idea.In 1912, Republican President Theodore Roosevelt ran for a third term as a Progressive Party candidate; his platform included a “single national health service.” Even though he lost, the concept of a single-payer system would continue to make its way into political discussion. Some of the strongest resistance to a nationalized health care system came from physicians who feared that it would interfere with their profits.Teddy’s cousin President Franklin Roosevelt would try to pass a universal national health insurance program as part of the Social Security Act in 1935, as part of the New Deal. President Harry Truman continued to push for it during his time in office. According to the Kaiser Family Foundation, fear of socialism and a panic by Southern Democrats that a nationalized health care system would require desegregation ultimately thwarted the health care efforts.It came back to prominence when Sanders included it as part of his 2016 presidential platform. He didn’t win, but the idea took off with a number of Democrats. In fact, it also has some support from Republicans. According to a recent Kaiser Family Foundation poll, 40% of Republicans support the idea of federally provided health insurance.
In September 2017, Sanders and 16 Democratic co-sponsors introduced a Medicare for All expansion bill to cover all Americans. The co-sponsors included California Sen. Kamala Harris and New Jersey Sen. Cory Booker, who are running for president in the 2020 election. In April this year, Sanders reintroduced the bill alongside 14 cosponsors, including Sens. Elizabeth Warren and Kirsten Gillibrand, who are also seeking the Democratic nomination for president, as well as Harris and Booker.Theirs wasn’t the only bill to try to expand Medicare. In the last congressional session, there were at least eight other proposals introduced in the House and the Senate aiming to expand the program. Some would have expanded the program by lowering the Medicare age eligibility to 50; other bills added a Medicare option while maintaining private insurance choices.Last summer, Democratic Rep. Pramila Jayapal of Washington helped found the Medicare for All Caucus, which now has 78 Democratic representatives as members.
What would the program do?
Our health care system could best be described as a hybrid. About half the money comes from the private sector: people who have private insurance through their employers or who are self-insured. The other half is from the public sector: federal, state and local governments paying into Medicare and Medicaid.If the country adopted Sanders’ proposal, people who currently get their insurance from their employers would move to the government system. Sanders’ plan would provide fairly comprehensive coverage, as Medicare does now, all with no copays, premiums or deductibles. It would include inpatient and outpatient hospital care, emergency services, preventative services, most prescription drugs, as well as dental and vision coverage. His 2019 plan also covers long-term or nursing home care. The only potential for out-of-pocket fees would be for some prescription drugs and certain elective procedures.If states wanted to fund additional benefits for their residents, under the Sanders proposal, they could, but they would have to do so without federal assistance.Aside from getting more people access to health care, supporters of Medicare for All say that moving to this system would create efficiencies to help bring down costs of health care. The US health care system now costs nearly double what other high-income countries pay, per capita.
The highlights of the plan
- A single-payer, government-run health care program in which all Americans are covered and which replaces almost all other existing public and private plans.
- Many Democratic presidential candidates back some version of “Medicare for All,” although there are differences in their approaches.
- Supporters say it’s the best way to cover all Americans and hold down the costs.
- Critics say the cost will be astronomical, ask how it will be paid for, and question whether the government can effectively manage such a massive undertaking.
Under Sanders’ plan, would I be able to keep my doctor?
As long as your doctor was state-licensed and a certified Medicare provider, your visit would be covered. But if your doctor chose not to participate in Medicare, you would have to either pay out of pocket or see a participating doctor.
What wouldn’t the program cover?
Under the comprehensive Sanders program, the only things you would probably have to pay for would be certain elective and cosmetic procedures. It could eliminate much of the private insurance system as we know it. Private plans could exist to cover the few procedures not included in the plan.Other proposals aim to keep the private insurance system and add an expanded Medicare or public option.
Also, keep in mind that Medicare pays doctors and hospitals less than private insurers for services, and not all hospital systems or doctors accept Medicare. The American Hospital Association found that private health plans pay hospitals about 45% more than treatment costs, while Medicare and Medicaid pay about 12% less than costs, a difference of 57 percentage points If we moved to a Medicare for All system, would all hospitals and doctors agree to this pay cut? Would they organize to demand more? These are the kind of questions that architects of an expanded system have to wrestle with.If Sanders’ Medicare for All were to become law, it wouldn’t happen overnight. It would roll out over four years.In the first year, Medicare would grow, with the eligibility age dropping to 55 and with all children 18 and younger added to the rolls. Over the next two years, the age would drop to 45 and then 35. By the fourth year, it would truly become “Medicare for all.”
How would this be paid for?
This is where the rubber hits the road and one of the reasons it’s such a contentious issue.The graph below illustrates the federal Centers for Medicare & Medicaid Services’ projections for health care spending from 2017 to 2026.
There are several numbers to consider when we think about health care costs.1. National health care spending: That’s the yellow line in the graph. It represents how much we as a country spend on things like drugs, doctors visits and hospital care; including all sources of funding, both public and private. In 2017, the cost of health care was $3.5 trillion. Over the decade from 2017 to 2026, the cost is expected to be $45 trillion.2. Federal health care spending: This purple line represents the federal government’s share of national health care spending, which includes Medicare and Medicaid. Much of this comes from taxes. In 2017, federal health care spending was $974 billion. Over 2017 to 2026, federal health care spending is projected to be $13 trillion.3. Total government spending: That’s the green line, federal health care spending plus what states and local municipalities pay. It represents about half of total national health care spending; the other half comes from the private sector. In 2017, total government spending was $1.56 trillion. Over the decade from 2017 to 2026, total government spending is projected to be $21 trillion.Sanders’ Medicare for All plan analysisSanders’ analysis was based on the initial Medicare for All proposal he ran on in the 2016 campaign, which did not include coverage for long-term care. That analysis used 2016 Centers for Medicare & Medicaid Services health expenditure projections. Sanders’ 2019 proposal doesn’t detail exactly where money will come from, or how much it will require, but his office did suggest some potential options, which focused on more progressive taxing.To get the clearest economic picture of how to pay for this, CNN used Sanders’ 2016 assumptions and applied the same savings ratios to the most current projections in this analysis of Sanders’ data.1. National health care spending: Using Sanders’ assumptions, under Medicare for All, national health care spending for 2017 would have been just about $3.2 trillion. Over the decade from 2017 to 2026, Sanders’ total national health care spending would have been close to $39 trillion.Keep in mind that Centers for Medicare & Medicaid Services projected that national health care spending under our current system is about $45 trillion from 2017 to 2026. If Sanders’ assumptions are correct, Medicare for All would lower national health care spending by about $6 trillion over the decade.Sanders believes that those savings would largely result from reduced administrative costs, reduced payments to physicians and lower prescription drug prices resulting from a single-payer system.2. Government spending: Sanders doesn’t make a distinction between federal and state spending in his analysis. All of his spending is considered federal or public, since under the Medicare for All plan, the federal government is largely the single payer.
Sanders’ analysis assumes that if Medicare for All had been implemented in 2017, in that year, federal spending would have been approximately $2 trillion, and total public or federal spending would have been about $27 trillion for the decade 2017-26. But again, Sanders estimates that total national health care spending under Medicare for All would have hit $3.2 trillion for 2017 and about $39 trillion over the decade, meaning Sanders still would need an additional $12 trillion to $14 trillion to cover national health care spending for the decade.
To pay for the newest version of his plan, Sanders has suggested several potential options, which his office listed as:
• Creating a 4% income-based premium paid by employees, exempting the first $29,000 in income for a family of four
• Imposing a 7.5% income-based premium paid by employers, exempting the first $2 million in payroll to protect small businesses
• Eliminating health tax expenditures
• Making the federal income tax more progressive, including a marginal tax rate of up to 70% on those making above $10 million, taxing earned and unearned income at the same rates, and limiting tax deductions for filers in the top tax bracket
• Making the estate tax more progressive, including a 77% top rate on an inheritance above $1 billion
• Establishing a tax on extreme wealth• Closing the “Gingrich-Edwards Loophole”
• Imposing a fee on large financial institutions
• Repealing “corporate accounting gimmicks”
Sanders argues people would save money because they would no longer have to pay copays, monthly premiums or deductibles.
Some experts believe that Sanders’ picture is too rosy, overestimating how much savings would result from the single-payer system.
Critics also worry that he has underestimated the increased cost from more people using health services. There are now about 28.5 million uninsured Americans, and it shouldn’t come as a surprise that providing insurance for that many more people will be expensive.
A recent Pew Research Center poll found that 6 in 10 Americans believe that it is the federal government’s responsibility to make sure all Americans have health care coverage.
The left-leaning Urban Institute estimated that, over the same 10-year period, under the Sanders plan, national health care spending would increase by more than $6 trillion over what we are projected to spend by 2026. It also projected that national health care spending would be closer to $51 trillion, instead of Sanders’ projection of $41 trillion. That means an additional $32 trillion in new federal spending, according to the Urban Institute’s estimate.
Other experts, including Kenneth Thorpe, chair of health policy and management at Emory University’s Rollins School of Public Health, also take issue with Sanders’ estimates. No matter how the cost is cut, everyone will be affected, Thorpe said, and Sanders’ proposed tax hikes couldn’t cover the $32 trillion increase.
Thorpe believes that sales taxes would have to increase, on top of the other tax hikes Sanders has called for, to get to the needed $32 trillion. And that would affect everyone. Sales tax is a regressive tax, meaning it will affect the poor more than the rich.
Thorpe knows this not just because he’s an economist and has analyzed Sanders’ 2016 plan but because he was chosen by the Vermont legislature in 2005 to analyze potential blueprints for a single-payer system in the Green Mountain State.
“There will be winners and losers,” he explained. And who may end up paying more might surprise you.According to Thorpe, someone already on Medicare or Medicaid who is paying very little, if anything, in premiums would probably start paying more taxes and potentially see no relief, or offset, on premiums. The reason is that what they are paying in taxes is potentially greater than their current premiums.
Small-business owners could be in a similar boat. If they have fewer than 50 employees, they are currently not paying premiums for their employees. But they would pay more in payroll taxes and not see any relief, or offset on premiums.
Are there other places that do this?
Canada and Taiwan are often cited as examples of other places that have single-payer health care systems under which all residents are insured. Those governments pay for health care through taxes on their citizens. In Canada, the federal government provides only health care, and dental, vision and prescription drugs may be covered by the province or through private insurers.
Britain’s National Health Service is also often used as an example of a single-payer system. But in the English system, the government not only pays for services, it contracts with and employs doctors and hospitals directly. This is considered socialized or nationalized health care.
In Canada and Taiwan, and under Medicare in the United States, the government doesn’t own or contract the providers. The British system is more akin to the US Veterans Administration.
Another country that frequently comes up as a model in the health care debate is France, which has a mix of public and private insurance. Although most of France is covered by one of the three not-for-profit health insurance funds financed by the government and covers between 70% and 80% of costs, there are private supplemental insurers, as well.All of these countries provide almost universal health care, through which insurance is either provided or mandated by the federal government.
How it’s different from Obamacare
President Barack Obama pursued a different approach with the Affordable Care Act, which focused on covering people who were unable to get insurance through their job or existing federal programs.
Under the ACA, the government offered subsidies for individuals and families to buy private plans through a government exchange. It also expanded Medicaid, the program for low-income people, to cover more Americans.
Supporters of Medicare for All argue the ACA’s approach didn’t go far enough. While the law broadened coverage to millions, about 27 million people are still uninsured, according to the Kaiser Family Foundation, and there are signs that number is growing. The ACA’s exchanges have struggled to attract insurance companies, leaving many areas with few choices of plans, although none with zero options. Customers who make too much money to qualify for subsidies have sometimes found the plans unaffordable, while others have complained that deductibles, while capped under the law, are still too high.
Why is health care so expensive in the first place?
In the United States, for every one doctor, there are about 16 staff members — but only six of those staff members actually have clinical roles, like nurses’ aides or medical assistants.That’s more than $800,000 in labor costs per doctor. Unlike in countries that have a nationalized or single-payer system, the United States has hundreds of health insurance providers, with different codes and different rates all for the same procedures. It’s administratively inefficient if the same knee replacement can be processed and charged in dozens of ways.
The cost of lifestyle diseases, such as obesity, is staggering in the United States. There are estimates that 80% of diabetes, heart disease and stroke and 40% of cancer cases are preventable. By 2050, as many as 1 in 3 US adults is expected to be diabetic.
We also spend way more on technology and drugs. Pharmaceutical drugs are particularly costly in the United States, partly because the largest user of prescription drugs — Medicare — can’t negotiate prices down with drug manufacturers. Under Sanders’ plan, the government would come to the table to broker pricing.
Patients in the US health care system tend to have a lot more unnecessary tests and procedures than patients in other countries, and that all adds up to a high price tag. It’s in part due to profit motivation, as well as a phenomenon known as “defensive medicine.” That’s when doctors and hospitals are overly cautious and perform tests and scans out of fear of ending up out of the operating room and in the courtroom. In 2008, defensive medicine cost the United States $55.6 billion in health care costs.According to the nonprofit National Academy of Medicine, in 2009, one-third of all health care costs was a complete waste and did nothing to make Americans actually feel better.
What do most people think about Medicare for All?
This proposed expansion isn’t just popular with politicians; it has a lot of support from their constituents. A CNN poll from July 1 found that 56% of Americans support a national health insurance program for all Americans, even if it would require higher taxes. An earlier Kaiser Family Foundation survey from January found that 56% of Americans support Medicare for All.Get CNN Health’s weekly newsletter
Public support also depends how you qualify the program. Remind people that it will eliminate health insurance premiums and reduce out-of-pocket health care costs for more Americans, and according to a January Kaiser Family Foundation survey support for the program spikes to 67%. If you tell people that Medicare for All guarantees health care as a right for all Americans, approval for the program jumps to 71%.But remind them that it could eliminate private insurance, and support flips. According to the CNN poll, 57% of respondents said that a national health insurance program should not completely replace private insurance.
Why supporters like Medicare for All
Proponents of a single-payer Medicare for All argue that health care is a right and that enrolling all Americans under one plan is the best way to ensure universal coverage, especially for economically vulnerable populations.
For those who do have insurance through their job or through an individual plan, deductibles are rising faster than wages and customers can face surprise hospital bills from out-of-network doctors and specialists. By ending the use of employer-sponsored insurance as a primary source of coverage, Medicare for All would also free Americans to change jobs without losing their existing plan and health care network. Americans spend far more on health care per person than other developed nations and supporters of a single-payer plan argue it could hold down costs by negotiating or requiring lower payments to doctors, hospitals and drug companies, while eliminating overhead associated with private insurance.
As a result, even though the government would spend much more on health care under Medicare for All than it does now, supporters argue that a single-payer system might reduce total national health spending by some estimates and that money currently going to premiums would help offset the new taxes on individuals and families. Similarly wealthy countries tend to have both universal coverage (though not always a pure single-payer system) and healthier populations than the U.S., suggesting there’s a workable path to guaranteeing health care. Medicare for All plans in the House and the Senate would be more generous than universal plans in other countries, where citizens are often expected to shoulder more out-of-pocket spending or take on supplemental private insurance, which would raise its cost to the government.
In the meantime, what can I do to lower my own health care costs?
Take control of your health. Eat better. Exercise.Chronic conditions such as heart disease, cancer, diabetes and obesity are among the most prevalent and costly in the United States. Six in 10 Americans has at least one chronic disease; 4 in 10 have two or more. Americans with five or more chronic conditions make up 12% of the population but account for 41% of total health care spending. These Americans spend 14 times more in health care than those with no chronic conditions.According to the US Centers for Disease Control and Prevention, chronic diseases account for 90% of all health care spending. These conditions are the leading factors of our nearly $3.5 trillion in health care spending.
Here’s why it’s going to be Medicaid for All.
- Medicaid for All will spread the cost of universal coverage across states, reducing federal financing requirements.
Medicaid is a state AND federal program; States provide a lot of the funding for Medicaid; on average the Feds contribute 63% and states 37%. This is critical, as Congress will want to spread the cost of a Single Payer solution and there’s no better way to do this than require states to pony up big dollars [State contributions vary based on a state’s average personal income relative to the national average; states with lower average personal incomes get more federal dollars.]
- Medicaid is already built to cover everyone.
Medicare covers people of all ages, Medicare is very much elder-care focused.
Adapting Medicare to handle everyone from newborns to elderly, maternity care to pediatrics will be difficult, time-consuming, and expensive. Medicaid does all this and more – today.
- Generally, Medicaid is less expensive than other “systems”.
This is due to much lower provider payment and significantly lower administrative costs. Yes, this means providers are going to be paid less.
- Medicaid member satisfaction is pretty good; access to care is not much of an issue.
- Medicaid-based Exchange programs are much more successful in the Exchanges than commercially-based plans.
The Centenes et al [Medicaid-based plans] understand the demographics of the uninsured, have lower medical costs, and already have provider networks, customer relations operations, workflows and processes set up and operational. At the end of the day, lower cost wins – and their costs are lower.
- Medicaid is a simple, fully-integrated healthplan.
Medicare’s alphabet-soup of Parts A B C and D is confusing and convoluted, with different payers often covering the same individual. This increases administrative costs, member hassles, and decreases quality of care (co-ordinating pharmacy and medical care between different payers is problematic at best.
- Managed Medicaid plans are working.
These plans currently exist in most states, and many have been able to deliver excellent care at lower costs through innovation and very tight focus on outcomes. One example is using paramedics to deliver care. [disclosure – I sit on the board of Commonwealth Care Alliance, a Massachusetts healthplan that serves dual-eligible members]
What the critics have to say
The high cost is one of the most common arguments against Medicare for All. The nonpartisan Congressional Budget Office has not yet determined how much single-payer legislation would cost, but some outside analysts have tried to gauge its potential impact.
One 2018 study by the RAND Corporation estimated that federal spending on health care would increase from $1.09 trillion per year to $3.5 trillion under a single-payer plan similar to legislation in Congress. Politicians backing single-payer bills have so far been reluctant to explain how they would pay for their plan and it’s difficult to tell which individuals would pay more for care and which less without more details.
Leading health care industry groups have formed an umbrella organization called the Partnership for America’s Health Care Future to lobby against Medicare for All, both single-payer and more incremental proposals, and they warn that cutting payments to providers could affect hospital care and attract fewer doctors and specialists. Private insurers currently pay more, sometimes much more, for medical services than Medicare does. Setting payment rates under a single-payer plan could be a tricky balance: too low and they might make services worse, too high and they’ll make the new system even more expensive.
Conservative critics are more skeptical of the government’s ability to administer coverage on such a large scale, pointing to longer wait times for certain care in some countries with single-payer systems. Moving to a single-payer system would also require decisions about whether the new Medicare plan would reimburse providers for abortion (which federal programs are currently barred from covering) and whether it would include undocumented immigrants.
Many liberal-leaning critics are concerned that the transition to single-payer would be too disruptive, given that about 155 million people receive health coverage through their employer, an issue a number of Democratic presidential candidates have raised. Most people who get employer insurance report being satisfied with their plans and could be upset if they’re required to join a new government program instead.
Democrats who oppose single-payer tend to favor making a Medicare-like plan optional instead. There are numerous competing bills and proposals for a “public option” plan or “buy-in” to Medicare or Medicaid that differ in how many individuals or businesses would be eligible to participate and how the government plans would function.
In order for the universal medicare program to be affordable, we have to cut the cost of medicine. The reason medical care is so expensive is multi-fold. Hospitals and doctors have to charge extra money to cover for the no pays. So if their is a guarantee that they would receive compensation for every patient they cared for, they could drop the prices. The next big expense is malpractice insurance, you can thank lawyers for that. If the government mandated the amount of compensation in the lawsuits that would help reduce the cost of the insurance. The cost of medicine is too high. President Trump is working on that aspect. The US has been getting fleeced by the pharmaceutical companies for years. Hospitals have to buy all their supplies from designated medical supply companies that charge excessive prices for supplies and equipment. As you can see there are many areas that medical costs can be reduced. If these actions are taken the cost of universal medical care will drop as well.
joepadud.com, “The case for Medicaid for All,” By Joe Paduda; cnn.com, “What ‘Medicare for All’ means, politically and practically,” By Sanjay Gupta; factcheck.org, “The Facts on Medicare for All,” By Lori Robertson; nbcnews.com, “What is ‘Medicare for All’ and how would it work?” By Benjy Sarlin and Jeremia Kimelman;
Sen. Bernie Sanders introduced the latest version of his Medicare for All legislation on April 10, with 13 Democratic co-sponsors. Four of them, plus Sanders himself, are running for the Democratic presidential nomination.
Sander says the bill, S. 1129, “would provide comprehensive and cost-effective health care for everyone,” while the White House has said the plan would “mandate a decrease or elimination of choice and competition.” Once again, health care is shaping up to be a focal point of the presidential campaign. Let’s look at the details of this proposal.
What is the overall plan?
As the name indicates, the plan would expand Medicare, which now covers primarily those age 65 and older and some with disabilities, to everyone, creating a new universal, single-payer health care system in the United States. The country would move from a fragmented system — in which nearly half the population has employer-sponsored, private insurance with the rest a mix of Medicaid, Children’s Health Insurance Program, Medicare, private individual market coverage and no insurance at all — to a system in which everyone’s insurer is Medicare. Or nearly everyone. Under the plan, the Veterans Health Administration and Indian Health Service would remain.
What health care services would be covered?
The new “universal Medicare program,” as the bill calls it would cover: hospital inpatient and outpatient services, ambulatory services, primary and preventive care, prescription drugs and medical devices, mental health and substance abuse treatment, lab and diagnostic services, reproductive and maternity, newborn care and pediatrics, dental/hearing/vision services, short-term rehab, emergency care, transportation for low-income and disabled individuals to receive these services, and home and community-based long-term care. The bill would eliminate the Hyde amendment, which now restricts federal funding of abortion to only cases of rape, incest or endangerment to the mother’s life. The secretary of the Department of Health and Human Services could change or expand the benefits.
Current Medicare benefits would be expanded, since they don’t include dental, hearing or vision coverage now. Also, Sanders’ bill calls for virtually no out-of-pocket costs at the point of service for these benefits. There would be no copays, deductibles or premiums, with the exception of prescription drugs and biologics (such as vaccines and gene therapy), which could carry copays totaling no more than $200 a year per person, indexed for inflation.
Would private insurance still be available?
Potentially, but it would be limited. Once the bill is fully implemented, it would be “unlawful” for “a private health insurer to sell health insurance coverage that duplicates the benefits” provided under Medicare for All, and employers couldn’t provide such benefits either. However, private insurance could be sold to cover additional benefits that the new universal system didn’t cover — perhaps cosmetic surgery or other non-medically necessary care.
Private insurance would be available during a transition period (see the next question). The bill calls for funds to be set aside for workers in the insurance industry who lose their jobs because of the legislation.
There’s also the potential for direct-pay private contracts. One provision in the legislation allows for private contracts between health care providers and individuals for services for which the provider will not seek reimbursement from the government. The provider, however, must file an affidavit with the HHS secretary saying he or she won’t seek payment from the government for any service to anyone for one year. So, doctors would have to operate outside the universal Medicare system, with patients who could afford to pay out of pocket.
Sanders has made clear that private insurance would be eliminated. “You are not going to be able, in the long run, to have cost-effective, universal health care unless you change the system, unless you get rid of the insurance companies,” he said in an interview on MSNBC. Other Democratic presidential candidates haven’t fully embraced that part of the plan. When asked in a CNN town hall whether private insurance companies would go away, Sen. Kirsten Gillibrand said, “You’ll have to see whether they want to compete or not. I don’t think they will.”
After Sen. Kamala Harris said the plan would eliminate private insurance, also on CNN, her press secretary noted that she backed other legislation that wouldn’t go that far, as well. “She has co-sponsored other pieces of legislation that she sees as a path to getting us there, but this is the plan she is running on,” Harris’ national press secretary Ian Sams told CNN.
Gillibrand and Harris are co-sponsors of the legislation, as are Sens. Elizabeth Warren and Cory Booker, who also are running for the Democratic presidential nomination. Candidate Sen. Amy Klobuchar hasn’t signed on to the legislation and instead has co-sponsored a bill that would provide a Medicaid buy-in option and another that would allow those age 50-64 to enroll in Medicare.
How would the transition to Medicare for All occur?
Four years after enactment of the legislation, everyone would get a Universal Medicare card, and the new system would be in effect. Leading up to that fourth year, traditional Medicare benefits would be expanded — adding dental, vision and hearing aids — and the eligibility age would be slowly lowered, allowing people to buy-in to Medicare if they chose to do so. In year one, for instance, the eligibility age would be 55 and by year three, it would be 35. A Medicare transition plan would be available through the Affordable Care Act exchanges, but open to anyone who wanted to enroll. Children could be enrolled in the first year after enactment.
People could choose to keep other insurance coverage during this transition period.
Could people decide to opt out?
No, though they could enter into private contracts with health care providers and pay for those services themselves (see the private insurance question above). However, the bill says every resident of the United States would have the universal health care benefits, and people can’t opt out of paying whatever taxes will be assessed to finance the plan.
How would health care providers be affected?
They would have to meet minimum national standards and sign participation agreements, barring them from charging extra fees to patients. They would be paid according to a fee schedule, established by the HHS secretary. A new Office of Primary Health Care would set goals for increasing access to primary care and promote an increase in primary care practitioners.
The HHS secretary also would negotiate prices paid for pharmaceuticals and medical devices.
What about access to care?
The plan includes a “freedom of choice” provision stipulating that people can choose any health care provider, and Sanders has highlighted this part of the plan, saying, “you’ll go to any doctor that you want, you’ll go to any hospital that you want.”
That’s what the bill proposes. But with universal coverage and zero copays, demand for health care services would likely increase. “[T]he Sanders plan would increase demand for health services by eliminating individuals’ direct contributions to care (i.e., by eliminating deductibles, co-payments, and coinsurance), but not all increased demand could be met because provider capacity would be insufficient,” the Urban Institute said in a 2016 analysis of Medicare for All, which was similar to the current bill. The Urban Institute incorporated “provider supply constraints” in its estimates. Similarly, a RAND analysis published this year said that “providers’ willingness and ability to provide health care services—including the additional care required by the newly insured and those benefiting from lower cost sharing—would most likely be limited.” The extent of this issue would depend on the change in individual providers’ payments and their responses. RAND said: “As a result, some patients might experience longer wait times for care or face unmet needs.”
How much would the plan cost?
There’s no firm price tag, as many details need to be filled in, but several organizations have produced estimates using varying assumptions.
To put these estimates in context, total national health expenditures were $3.5 trillion in 2017 and are projected to be $47 trillion over 10 years, 2018-2027, according to the Centers for Medicare & Medicaid Services.
The Urban Institute estimated in 2016 that the Medicare for All plan would increase all national health expenditures by $518.9 billion in 2017 and by $6.6 trillion over 10 years. That report also said the plan would increase federal spending by $32 trillion over 10 years; that’s because spending by private insurers, employers, individuals and states would shift to the federal government.
Kenneth Thorpe, a professor and chair of the Department of Health Policy and Management at Emory University, estimated in 2016 that the increase in federal spending would be $24.7 trillion over 10 years.
In an estimate published online by Sanders’ 2016 presidential campaign, Gerald Friedman, a professor of economics at the University of Massachusetts Amherst, estimated Medicare for All would reduce national health spending by $6.3 trillion over 10 years and new government spending would amount to $13.8 trillion over 10 years.
The Mercatus Center at George Mason University published a study that, similar to the Urban Institute report, estimated the increased federal spending at $32.6 trillion over 10 years. Of course, health care spending by other payers would decrease. Sanders’ office and the study author, Charles Blahous, have disagreed about the overall finding of his study. Sanders’ office has said the study shows a net decrease in national health care spending, but Blahous said the “actual cost” would be “substantially greater” because of “unlikely” assumptions he used to estimate the cost, such as a 40 percent reduction in private insurance reimbursement rates to providers.
A RAND Corporation report issued this year estimated a 1.8 percent increase in total health spending if implemented in 2019. (RAND only produced an estimate for that year.) It said spending by the federal government on health care “would increase substantially, rising from $1.09 trillion to $3.50 trillion, an increase of 221 percent,” but, of course, health care spending by employers, individuals, private insurers and state/local governments would decrease substantially, or be eliminated.
The New York Times asked these same think tanks and experts to estimate total health expenditures for next year under Medicare for All, and it also found a wide range of estimates. The Times noted that “the difference between the most expensive estimate and the second-most expensive estimate was larger than the budget of most federal agencies.”
It’s difficult to give a clear cost figure when various assumptions — such as provider pay rates, savings from prescription drug negotiations, utilization of health care — have to be made.
How would it be financed?
The legislation doesn’t include any information on how it would be financed. Instead, Sanders has put forth several suggestions to be debated. They include: payroll taxes, an income-based “premium,” increased taxes on high-income individuals, and fees on major financial institutions. There would also be some tax savings, for instance through eliminating the tax exemption of employer-provided insurance premiums. The employer exclusion “will cost the federal government an estimated $280 billion in income and payroll taxes in 2018,” says the Tax Policy Center.
Do the other 2020 Democratic presidential candidates support this plan?
Reps. Tulsi Gabbard, Tim Ryan and Eric Swalwell are co-sponsors of the House version of Medicare for All, H.R. 1384. As for the rest of the 21-person field, The Hill has a breakdown of what every candidate supports regarding changing the health care system.
What else has been proposed in terms of expanding Medicare?
Beyond H.R. 1384, which, like Sanders’ plan, would create a national Medicare program, other legislative proposals would make much less sweeping changes. There are bills to offer a public option based on Medicare through the Affordable Care Act’s exchanges, and other legislation that would allow individuals to buy-in to Medicare at age 50. House and Senate bills also call for a Medicaid buy-in option available through the ACA exchanges.
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