Medicare for All, Explained

Assisted Living, Healthy Aging, Senior Care Leave a comment , ,

What are Medicare for All and Medicare for America, and how would these concepts change health care?

As the 2020 presidential race heats up, voters are hearing more and more about Medicare for All. Yet, many of us aren’t sure exactly what that means. While Americans may fear letting go of the health care they currently have, they yearn for something better. What are the new proposals, and how would they affect citizens with different health care plans?

Single-payer health care is a type of universal health care financed by taxes that covers the costs of essential health care for all residents, with costs covered by a single public system. “Single-payer” describes the mechanism by which health care is paid for by a single public authority, not the type of delivery or for whom physicians work, which may be public, private or a mix of both.

In the United States, the current single-payer insurance component is Medicare, which can include private insurance plans in Medicare Advantage and Medicaid. Medicare covers all adults starting at age 65 but also provides benefits for those with specific disabilities and anyone with end-stage renal disease.

Medicare for All

Democratic candidate Bernie Sanders included Medicare for All as part of his campaign platform in 2018. Paired with the slogan “Health care is a right,” the concept appeals to many voters in spite of practical and political questions surrounding the issue. America is a health care paradox: despite having some of the world’s top hospitals, it is the only large, rich country without universal health coverage. In America, even if a health condition doesn’t kill you, it may leave you destitute.

Health care spending accounts for nearly one-fifth of the nation’s economy. As with any new proposal, it’s unknown exactly how taxes to support the system would balance against savings on premiums and care. However, there are plenty of prototypes of similar systems operating in other countries to offer guidance.

Sanders’ plan proposes a single program that would cover everyone who lives in the U.S. In the bill he introduced in 2017, nursing home and related care expand. Every medically necessary service, from annual doctor exams to mental health care to prescription drugs, would be covered. Dental and vision care would be paid for as well.

In spite of its moniker, the plan as described would expand benefits beyond those currently in Medicare. There would be no costs for individuals: no copays, no deductibles, and no coinsurance. Certain drugs could require out-of-pocket payments of up to $200 per year, and long-term care might not be free. Every year, the government would set rates for services, drugs and medical equipment.

Medicare for All would replace all other health insurance, excluding that for elective surgery. Insurance provided by employers, Medicaid and ultimately Medicare would eventually disappear.

Paying for the plan requires increased revenue. Sanders proposed leaving taxes the same for those who earn less than $250,000, and increasing incrementally for incomes over this amount, with up to a 52 percent marginal rate on income over 10 million. Skeptics say this may not be enough. “No other developed nation has zero out-of-pocket costs,” according to analyst Drew Altman, who heads the Kaiser Family Foundation. Altman speculates that free coverage will drive an unsustainable increase in the use of the medical system. Picture someone with a stubbed toe showing up at the ER, or half of America in therapy.

Medicare for America

Enter “Medicare for America,” which lays out an incremental approach that avoids many of the political, budgetary and legal questions surrounding the Sanders plan. First introduced as a bill in 2018, it was largely ignored until former Texas Rep. Beto O’Rourke endorsed the plan. Other presidential candidates have indicated approval of the measure without making official endorsements.

Under Medicare for America, health care would not be free. The out-of-pocket limit for individuals would be $3,500; a family would have a $5,000 limit. Premiums would be capped at 10 percent of a household’s income. Medicare Advantage plans operated by private insurers would remain. Currently, Medicare Advantage covers about a third of the program’s beneficiaries.

Employers would have to offer plans that matched or exceeded the generosity of the government program, or direct employees to Medicare and pay a Medicare payroll tax.

Opposition Remains

Medicare for America would doubtless change during the process to become a law. One thing that’s sure is a bloated health care industry would raise enormous opposition to Medicare expansion.

On the left, cost-sharing is a concern. Fixed out-of-pocket costs hit those with lower incomes the hardest. Critics also question the government’s ability to negotiate reduced prices when the plan embraces most private insurance.

Conservatives say that the plan would be too expensive for the government, and too disruptive to the massively profitable health care system. This includes doctors, hospitals and insurers, who have lobbied hard to fight Medicare for All. They lose revenue under expanded Medicare.

Much of the determination for the future of health care will come down to voters, who must elect a Congress that favors expanded Medicare enough to overcome what would certainly be a filibuster in the current Senate. Thus far, the plan lacks bipartisan support. That could change depending on how well Republicans holding power in purple states will fare during the next election cycle.

Source: Society of Certified Senior Advisors Blog, Monday, July 29, 2019

Image by Steve Buissinne from Pixabay

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