Understanding Medicare For All – Part I

 

It is the duty of every American voter to be educated on the issues. As we rapidly approach another election day in November, many Democratic candidates are touting “Medicare For All” as a solution to our failing healthcare system.

Vermont Senator and avowed socialist Bernie Sanders introduced his version of healthcare reform in 2016 when he campaigned for the presidency touting a new single-payer system he calls Medicare For All. Other Democratic candidates have jumped on Bernie’s bandwagon as a growing number of mostly young Americans favor socialism over capitalism.

Today I begin a series of posts to help readers understand what Medicare For All really means to the healthcare of Americans. To assist me in this analysis I will be relying on the excellent work of healthcare economist John C. Goodman.

Ten Things You Need to Know

Goodman gives us ten fundamentals you need to understand about Medicare and what it mean if it were the only healthcare system available to everyone, as Senator Sanders promotes.

  1. Medicare is not really government insurance.

Although Medicare is mostly funded by taxpayers, it is not strictly a government system. It was formed originally by providing a standard benefit package offered by Blue Cross in 1965. It has always been privately administered, mostly by Blue Cross, that continues to provide private insurance to non-seniors. In recent years, one third of all seniors are enrolled in plans offered by private insurers such as Cigna, Humana, and United Healthcare under a cooperative program called Medicare Advantage.

  1. The most successful part of Medicare is run by private insurance.

This refers to the above-mentioned Medicare Advantage program. Studies have found this program delivers higher quality care at less cost than traditional Medicare. (Choice of doctors, however, is more limited.)

  1. Medicare is often the last insurer to adopt innovations that work.

Medicare started prescription drug coverage only after all the private insurers had been doing that for years. It still doesn’t pay for doctor consultations by phone, email, or Skype. It won’t pay for house calls at night or on weekends, even though the cost and the wait times are far below those of emergency rooms.

  1. Medicare has wasted enormous sums on innovations that don’t work.

Medicare has spent billions on pilot programs and demonstration projects trying to find ways of lowering costs and raising the quality of care. Yet instead of finding places in the healthcare system where these techniques work (private Medicare Advantage plans), Medicare set out instead to reinvent the wheel. Medicare frequently has regulations that are counter-intuitive and wasteful, such as requiring patients to be hospitalized before they can receive home physical therapy.

  1. Most seniors in conventional Medicare are participating in stealth privatization, even though they are unaware of it.

There are over 32.7 million patients enrolled in a managed care program called Accountable Care Organizations (ACOs). The Obama administration started this practice without telling seniors they were participating in a grand experiment. Not only that, but it is illegal for an ACO to tell a senior they are enrolled! Furthermore, ACOs are not achieving their intended purpose – they are neither saving money nor are they improving the quality of care.

  1. There is nothing Medicare can do that employers and private insurers can’t do.

For many years the Physicians for a National Health Program argued that a single-payer health insurer would be a single buyer in the market for physicians’ services. They reasoned this would give the government the power to bargain down the fees paid to physicians. Reality, however, is that Medicare doesn’t bargain with anyone. They simply put out a price for services and doctors can either accept or reject it. Private insurers have been doing the same thing for years. This is currently bringing doctor fees down in the ObamaCare exchange market – which is why the best doctors and hospitals avoid these plans.

  1. Medicare for all would be costly.

There is no such thing as a free lunch. This is one of the first lessons of adulthood. Even Bernie Sanders admits this, but only when pressed. A study by Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years. This would necessitate a minimum of a 25% payroll tax – but only if it assumes doctors and hospitals provide the same amount of care they provide today. Since Medicare rates are 40% or more below private rates, a realistic assumption is that doctors and hospitals would increase the amount of care to make up the difference. This would then require at least a 30% payroll tax.

 

(This post will be continued next time.)

 

2 comments

  1. What would be wrong with a ‘Medicare for all’ system that provides basic health care for everyone (with some copay as Medicare requires) and, if a person had the resources, allowed that person to buy supplemental insurance that covers health care needs beyond the basic needs covered by the Medicare for all. The difficult part would be, of course, what constitutes basic needs, but it would probably need to be a lot less than currently covered by Medicare to keep costs affordable. But it seems to me that a system such as this would assure that everyone in the country has access to basic health care.

    Comment by Romy Tomlinson on September 17, 2018 at 2:09 pm

  2. Medicare For All would give us a single-payer healthcare system which is complete government control of healthcare. In every other country where this has been tried (Canada, Great Britain, Sweden) it has led to long delays in treatment (reduced access to healthcare), lowered quality of care, and rationing of care. Furthermore, the cost is staggering. A conservative estimate is $32.6 Trillion in the first ten years alone and higher in the years to come. It is so expensive even Vermont (home of Senator Bernie Sanders) gave up trying to implement it because the costs were prohibitive. Why would we want to spend such excessive amounts on a poor healthcare system that delays treatment? There’s a good reason why thousands of Canadians come to the U.S. for their healthcare at great expense to them.

    Comment by Robert Roberts on September 17, 2018 at 2:49 pm