What Is Medicare for All?
The term “Medicare for All” refers to a collection of legislative proposals that aim to expand Medicare into a federal single-payer system that provides health care to all Americans. It would effectively eliminate private health insurance.
- Written by Christian Simmons
Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.Read More
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- Published: January 25, 2021
- Updated: November 1, 2022
- 10 min read time
- This page features 14 Cited Research Articles
- Edited By
Medicare for All Basics: How It Works
The term “Medicare for All” is used by mostly progressive politicians to describe a single-payer, government-run health care program that covers all Americans. It doesn’t apply entirely to any one plan, but more to an overarching idea of expanding government health coverage to all Americans.
It often calls for a more robust version of Medicare — the government health insurance program for the elderly and disabled — to replace nearly all other public and private plans.
Medicare for All is essentially a single-payer system, in which the government pays for everyone’s health care instead of multiple groups — such as employers and private insurers.
Many Americans would be required to contribute taxes to finance the system. It’s unclear exactly what the cost to each American would be since the system is still largely theoretical.
The Congressional Budget Office analyzed some of the economic implications of Medicare for All and found that it could result in elimination of many health care costs to Americans and greatly expand coverage, but also noted that it would be a massive undertaking to successfully off.
- Private insurance, employer-provided insurance, Medicaid and the current Medicare program would be replaced by Medicare for All.
- All medically essential treatments would be covered with no premiums or deductibles.
- Private insurers would be barred from selling plans with similar coverage.
- Some out-of-pocket costs may still exist for prescription drugs and long-term care.
- Private insurers could still offer supplemental plans to cover items excluded from Medicare, such as cosmetic surgery.
- The government would set payment rates for drugs, services and medical equipment.
- The Veterans Health Administration and Indian Health Service would stay in place.
- Taxes would finance the new system.
One of Medicare for All’s biggest supporters is Vermont Senator and 2020 Democratic presidential candidate Bernie Sanders (I-Vt.). His Medicare for All proposal was a major part of his platform during the 2020 Democratic Primary.
According to the Kaiser Family Foundation, 10 different bills were introduced in the 116th Congress aimed at restructuring the country’s current health care system. Sanders — along with 14 co-sponsors in the Senate — introduced his own version in May 2022.
But despite the many versions of the movement that have been officially introduced as bills, it’s unlikely that Americans will see much, if any, movement on Medicare for All in 2022. It would mark an unprecedented and dramatic overhaul to the current health system that could potentially require years of planning.
It also would need significant support throughout the U.S. government, and currently is still only largely supported among progressive Democrats.
Meanwhile, other Democrats have proposed more incremental approaches that offer a public plan option that would keep current sources of coverage in place. There have also been calls to refine the existing system by making updates to Obamacare or lowering the Medicare eligibility age.
How Is Medicare for All Different from Medicare?
The term Medicare for All simply sounds more appealing to many Americans than the term single-payer health care.
According to a 2017 Kaiser Family Foundation poll, 48% of people approved of single-payer health care, while 62% of people approved of Medicare for All.
But the current Medicare system is very different from what Sanders and other lawmakers have proposed.
The biggest difference is eligibility. Currently, Medicare is only available to people ages 65 and older and some people with long-term disabilities. Medicare for All would create universal coverage for everyone.
- Broader Benefits
- Original Medicare does not cover many of the services proposed in Medicare for All, including dental and vision care, hearing aids, reproductive services or early childhood care.
- Out-of-Pocket Costs
- Original Medicare has several out-of-pocket costs, including deductibles, premiums, coinsurance and copayments. A 2022 study from the Urban Institute estimated that 4.5 million Medicare beneficiaries would spend more than $5,000 in out-of-pocket costs in 2023. In contrast, Medicare for All would eliminate out-of-pocket costs.
- Role of Private Insurance
- Of the more than 60 million current Medicare enrollees, about a third are covered by Medicare Advantage plans offered by private insurance companies. Another 25 million are enrolled in Medicare Part D prescription drug coverage — which is also administered by private insurers. And nearly 10 million people have a Medicare Supplement plan, also known as Medigap, from a private carrier. The current Medicare program would need a major overhaul if private insurers were eliminated.
- How It Is Financed
- There are many funding sources for the current Medicare system. For example, Medicare Part A hospital insurance is paid for with payroll taxes and some participant cost-sharing, while Part B outpatient coverage and Part D are financed with beneficiary premiums, patient cost-sharing and general tax revenues. Medicare for All would be financed almost entirely by taxes.
Medicare for All Pros and Cons
Medicare for All can be a divisive subject.
Supporters claim it’s the best way to cover every American and hold down escalating health care costs.
Critics argue that the program would be expensive and question how the government can effectively manage such a massive system.
- Enrolling everyone under a single plan is a way to guarantee universal coverage, especially for economically vulnerable people.
- It would reduce out-of-pocket spending for individuals.
- Through regulation and negotiation, the government could control the price of drugs and medical services.
- Americans could switch jobs without losing their existing plan or health care coverage.
- Providers would spend less money and time on administrative activities because they would only deal with one government agency, instead of multiple private insurance companies.
- Hospitals and doctors would be required to provide the same level of service at a low cost, instead of targeting wealthy clients or pushing expensive services.
Increased cost is one of the most common arguments against Medicare for All.
A 2018 study by the RAND Corporation estimated that federal spending on health care could increase from $1.09 trillion per year to $3.5 trillion per year if a single-payer plan passed.
- Some analysts believe that the government may not be able to leverage its bargaining power to significantly reduce costs as quickly as supporters suggest.
- Because health care would become more affordable, demand for services would increase, leading to greater congestion in the health care system.
- Some Americans would face higher taxes to finance the program.
- Doctors may have less incentive to provide quality care if they aren’t well paid. Likewise, providers may leave the health care sector to make more money.
- A single-payer system may be slow to explore newer, more expensive treatments. The government could also limit services with a low probability of success or may not cover prescription drugs for rare conditions.
How Much Would Medicare for All Cost?
The price tag of Medicare for All has been widely debated.
Sanders himself has said economists estimate Medicare for All costing between $30 trillion and $40 trillion over 10 years.
Research by Urban Institute — a nonpartisan Washington, D.C. think tank — estimates the program costing between $32 trillion and $34 trillion over 10 years.
In January 2020, a team of researchers from the University of California conducted an economic analysis of 22 different single-payer plans proposed over the past 30 years.
Their research, published in a paper in PLOS Medicine, found that 91 percent of the analyses predicted net health care savings over several years.
But as researchers summarized: “Actual costs will depend on plan features and implementation.”
To pay for the program, Sanders has suggested redirecting current government spending totaling about $2 trillion per year to Medicare for All.
To do so, he proposes raising taxes on households making more than $250,000 a year. Incomes of $10 million or more would pay a 52 percent marginal tax rate.
Sanders has also proposed a tax on the wealthiest 0.1 percent of Americans.
As a 2019 article from The New York Times pointed out: “The many questions and nuances are all reminders that single-payer is more complicated than the campaign talking points on either side might suggest.”
Medicare for All in the 2020 Presidential Election
Medicare for All became one of the major topics of the 2020 Democratic Primary and Presidential Election, due in part to Sanders’ support of the idea.
Support was mixed throughout the party, however, with the Democratic candidates offering a wide range of ideas on how to address the issues of the U.S. health care system. According to the Washington Post, both Sanders and Warren fully endorsed Medicare for All, while candidates like Kamala Harris and Corey Booker supported a version of it that still allowed a role for private health care.
More moderate candidates like Joe Biden and Pete Buttigieg were opposed to Medicare for All, preferring to find some other option or plan like possibly updating and reforming Obamacare.
Since Biden went on to win the nomination — and eventually the presidency — Medicare for All was not adopted as part of the Democrats’ agenda.
There are still active Medicare for All bills, including a renewed push by House Democrats in early 2021, but the actual passing of any legislation doesn’t appear to be imminent. Medicare for All’s status moving forward — and whether it will ever gather the support needed in its current form to become a law — is unclear.
Alternative Proposals and Bills to Medicare for All to Expand Medicare and Medicaid
Outside of Medicare for All, there have been several other attempts in recent years to make changes or updates to the U.S. health system. Many of these ideas have involved altering the rules of who can enroll in Medicare or Medicaid.
One example is the Medicare at 50 Act. According to Yahoo, this bill was proposed by 21 Democratic senators in 2021 and would lower the age eligibility requirement to enroll in Medicare by 15 years.
The change could open Medicare coverage up to millions more Americans each year, giving them access to affordable care that they may not be able to get otherwise.
However, there are concerns about the additional strain this would add to the already tenuous Medicare system. It also could have major workforce implications since it may encourage some Americans to retire much earlier.
Another proposal that was recently reintroduced is the State Public Option Act. If passed, it would essentially empower states to create a buy-in option for their Medicaid programs, giving Americans who don’t qualify for Medicaid now the chance to buy into it anyway.
It’s unclear if the bill would be able to gather the support needed to pass.
Frequently Asked Questions
14 Cited Research Articles
- Forberg, S. (2021, April 25). New proposal to lower Medicare age to 50 could be a lifeline to millions. Retrieved from https://www.yahoo.com/video/proposal-lower-medicare-age-50-130000091.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADVetMRzRd2vAXFi2_2dlWTxaygAZK6fUUgofT5UOKJaH-tVtxyH2GNZZpz0B25vx8R7Jqxd_eUq1oAkA9XvMzczAeFabvZ7T0R5nonu60I_zYgMcTGEtz3ytesseoII7N-1CuUE4UV22aWS0zKq9KyjN8ouPBhPME1mF7wfkaX9
- Gangopadhayaya, A., et al. (2022, June 6). Adding an Out-of-Pocket Spending Limit to Traditional Medicare. Retrieved from https://www.urban.org/research/publication/adding-out-pocket-spending-limit-traditional-medicare
- Swagel, P. (2020, December 10). How CBO Analyzes Proposals for a Single-Payer Health Care System. Retrieved from https://www.cbo.gov/publication/56898
- Noel-Miller, C. (2020, June). Medicare Beneficiaries’ Out-of-Pocket Spending For Health Care. Retrieved from https://www.aarp.org/content/dam/aarp/ppi/2020/06/medicare-beneficiaries-out-of-pocket-spending.doi.10.26419-2Fppi.00105.001.pdf
- Uhrmacher, K., et al. (2020, April 8). Where 2020 Democrats Stand on Health Care. Retrieved from https://www.washingtonpost.com/graphics/politics/policy-2020/medicare-for-all/
- Cai, C., Runte, J., Ostrer, I., et al. (2020, January 15). Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses. Retrieved from https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003013
- Gleckman, H. (2019, July 31). Medicare For All Has Nothing To Do With Medicare. Call It Something Else. Retrieved from https://www.forbes.com/sites/howardgleckman/2019/07/31/medicare-for-all-has-nothing-to-do-with-medicare-call-it-something-else/?sh=14c37d976c5c
- Pollitz, K., Neuman, T., Tolbert, J., et al. (2019, July 30). What’s The Role of Private Health Insurance Today and Under Medicare-for-all and Other Public Option Proposals? Retrieved from https://www.kff.org/health-reform/issue-brief/whats-the-role-of-private-health-insurance-today-and-under-medicare-for-all-and-other-public-option-proposals/
- Sen. Bernie Sanders. (2022, May 12). News Release: Sanders Introduces Medicare for All With 14 Colleagues in the Senate. Retrieved from https://www.sanders.senate.gov/press-releases/news-sanders-introduces-medicare-for-all-with-14-colleagues-in-the-senate/
- Sarlin, B. and Kimelman, J. (2019, June 20). What is 'Medicare for All' and how would it work? Retrieved from https://www.nbcnews.com/politics/elections/what-medicare-all-how-would-it-work-n1014256
- Abrams, A. (2019, May 30). The Surprising Origins of ‘Medicare For All.’ Retrieved from https://time.com/5586744/medicare-for-all-history/
- Kaiser Family Foundation. (2019, May 15). Compare Medicare-for-all and Public Plan Proposals. Retrieved from https://www.kff.org/interactive/compare-medicare-for-all-public-plan-proposals/
- Sanger-Katz, M. (2019, May 1). ‘Medicare for All’ Gets Much-Awaited Report. Both Sides Can Claim Victory. Retrieved from https://www.nytimes.com/2019/05/01/upshot/medicare-for-all-cbo-report.html
- Kaiser Family Foundation. (2017, November). Kaiser Health Tracking Poll — November 2017. Retrieved from http://files.kff.org/attachment/Topline-Kaiser-Health-Tracking-Poll-November-2017
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