What Is Medicare for All?
Medicare for All is a collection of legislative proposals aimed at providing health care to every American through a federal single-payer system. It would effectively eliminate private health insurance. Vermont Sen. Bernie Sanders is one of Medicare for All’s biggest proponents.
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 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 ca re instead of multiple groups — such as employers and private insurers.
Many Americans would be required to contribute taxes to finance the system.
- 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.
Meanwhile, other Democrats have proposed more incremental approaches that offer a public plan option that would keep current sources of coverage in place.
One of Medicare for All’s biggest supporters is Vermont Senator and 2020 Democratic presidential candidate Bernie Sanders. Sen. Elizabeth Warren and Rep. Pramila Jayapal have also supported or authored legislation.
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.
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 percent of people approved of single-payer health care, while 62 percent 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 age 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. According to an analysis by AARP, people with traditional Medicare spent an average of $5,801 on out-of-pocket costs in 2017. 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.”
10 Cited Research Articles
- 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
- 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/
- 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