Most people have heard the term Medicare, a program first developed in the 1960s to address the health insurance needs of seniors. The Medicare program has grown considerably since that time and today, you might have heard of the proposed expansion, Medicare for All. Most likely, you have heard prominent candidates in the Democratic party, such as Alexandria Ocasio-Cortez or Katie Porter use the phrase “Medicare for All”
However, the term is arguably most associated with Bernie Sanders, the senator from Vermont, who ran in the Democratic Presidential Primaries of 2016. While he was defeated by Hillary Clinton, his message of providing healthcare for everyone through the Medicare program resonated with some voters and helped to secure his place on the national stage.
But what is Medicare for All? Is it the same as Single Payer or is it something different? The answer to that question is fairly simple, but the actual program itself is more complicated compared to what currently exists.
What is Medicare?
Established in 1965 under the Johnson administration, Medicare was designed to provide coverage for seniors who reached the age of 65. In a sense, it is a form of universal health care, although there are deductebles and co-pays within the system, so the coverage is not fully complete. Medicare consists of different parts that cover various aspects of health care.
In 1972, Medicare was expanded to cover those with disabilities and in 2006, prescription drug benefits were added to the package. There has been talk of Medikids, coverage for children that follows the Medicare model, but so far there has been no serious attempt to put that into law. In addition, there has been a push to move the age requirement of Medicare down to 50 years old which helps to lower the cost for those from 50 to 64 years old. However, nothing has come of that so far.
The 2017 Medicare for All Act
Introduced by Senator Bernie Sanders, the Medicare for All Act would expand the current Medicare system to every American. The advocates for such legislation argue that the benefits would be considerable and help to lower health care costs overall. Such advantages that the legislation promises include the following;
- Coverage for the 27.6 million Americans currently without health care insurance
- Bolstered coverage for the 41 million underinsured Americans
- Greater choices for the 74 million currently covered by Medicaid
- Insulation from premium hikes and shrinkage of coverage
- Elimination of unpaid bills for hospitals and doctors
There is also little doubt that the Medicare for All plan is popular with the American people depending on how the question is asked in polls. For example, when phrased as Medicare or Universal Health Coverage, the popularity reaches above 60%. However, when phrased as Single Payer or Socialized Medicine, then it drops below 50%.
Differences Between Medicare for All and Single Payer
While it may seem that both plans are identical, the truth is that the Medicare for All plan under Sen. Sanders would combine government plans along with private insurance to provide the coverage. While single payer gets rid of private insurance, the Medicare for All play keeps employer-based insurance coverage for those who want it.
Assuming that the Medicare for All plan provides a better deal than any private insurance company could offer, it still might mean the end of private insurers in the healthcare field. However, that will not be known until the plan is put into place and its effects on the market are felt.
What is true is that the Affordable Health Care Act of 2010, often called Obamacare, made some major changes to the health insurance market, but the private insurers not only stayed, but the employer-based health insurance system was left mostly intact. While the Affordable Health Care Act did bring the numbers of those uninsured down to 10%, it also raised overall costs, deductibles, and co-pays for millions of people.
It is the looming demise of the Affordable Health Care Act which is driving many Democrats to push for a Medicare for All system. While the benefits are considerable, there are potential issues on the horizon as well.
While there seems to be considerable advantages in getting rid of the current private insurance-based system that provides coverage for children and adults up to the age of 64, apart from those who qualify for disability or Medicaid, which is coverage for those below a pre-set income level. There are some strong issues that opponents have pointed out with Medicare for All that may prevent it from ever becoming law.
Cost: Although Sen. Sanders puts the cost at $1.3 trillion per year to pay for the system, neutral observers have estimated that the cost may be twice as much. The Urban Institute, a left-leaning organization, has estimated the cost to be $2.5 trillion per year. The Committee for Responsible Federal Budget estimates the cost to be $2.8 trillion per year.
Considering that the current federal budget is $3.8 trillion, it is clear that adding $2.5 trillion would require a massive amount of tax collection. While Sen. Sanders may dispute the figures, even a $1.3 trillion addition would require a large increase in taxes to pay for the program.
Implementation: Another potential hurdle is how the new system is put into place. This will mean massive changes to the current private health care insurance industry along with cost changes for businesses and individuals that have both positive and negative impacts.
The big unknown question about implementing a government-based single payer system is what happens with the actual costs. How they might grow considerably under the plan which may raise the price well beyond $2.5 trillion or even $3 trillion per year, making it more difficult to cover under the system.
Whether Medicare for All succeeds will depend largely on which party controls the US government and the willingness of the American people to agree to tax increases and other measures to support the system.