In part 1, we explored the current US healthcare “system” in all its Byzantine complexity and unsustainability. “Medicare For All” has become the standard by which nearly all potential 2020 presidential candidates (at least the Democrats) are being judged. But what exactly does it mean?
Recall that Medicare is the current federal insurance program primarily for the elderly. All Americans over 65 are eligible, and costs are paid primarily from Medicare payroll taxes and premiums paid by enrollees. Payments for hospital services, doctor fees, and prescription drugs are made according to a set fee schedule (with adjustments for local factors), with some cost sharing to enrollees. It is, essentially, a single-payer system for older Americans. However, private insurance has a role. First of all, enrollees can choose either traditional Medicare, where payments are made directly by the government, or Medicare Advantage, in which private insurance companies are contracted by the government to provide the benefit. (In this arrangement, the private insurer can offer additional benefits, typically by negotiating lower payments to providers in exchange for narrowing the provider choice for enrollees.) Also, traditional Medicare beneficiaries can purchase supplemental private insurance known as Medigap to pay for services not covered by Medicaid, or to offset some of the cost sharing.
So, what is Medicare For All (MFA)? There are at least five different basic variations on this theme, and people supporting any of these have claimed to be in favor of MFA. Here is my (admittedly simplified) synopsis, along with my alternate name to help distinguish them:
- Medicare for All. This is the bill officially introduced by Bernie Sanders in the Senate and Pramila Jayapal in the House under the name “Medicare for All,” and truly represents, well, Medicare for all. Literally. It would in large part extend the current Medicare program to all US residents except veterans and Native Americans (see below). It would be financed and administered at the federal level, paid completely by taxes. It would not only replace Medicaid (the federal-state program for the poor and disabled), it would replace all employer-provided and ACA exchange private insurance. While the government would be the sole payer, providers would be independent rather than government owned. This makes it most similar to the Canadian system, as opposed to the British National Health Service where hospitals and physicians are government-run. (These bills would, however, retain the Veterans Affairs and Indian Health Services, which are fully nationalized as it is.) It actually goes quite a bit further than the current US Medicare system in that there would be no premiums, no cost sharing by individuals, and no role for private insurance or managed care organizations.
- Medicare for Many, Opt-Out version (officially, Medicare for America). In many respects similar to number one, but employers could continue to offer private insurance, and people receiving this could opt out of the Medicare system. The version that has been introduced also retains the Medicare Advantage options, thus preserving a role for private insurance companies.
- Medicare for Many, Opt-In version (there are several similar competing bills, such as Choose Medicare). In these flavors of MFA, Medicare would be a federal public plan available to anyone on the healthcare marketplace (“the exchange”). Anyone could purchase this instead of a private plan, with the same subsidies though the cost to purchase would presumably be lower than for commercial insurance and therefore this would attract many people, including a large number who currently receive insurance from their employer.
- Medicare for More (known officially as Medicare at 50). Keeps the system more or less as is, but lowers the eligibility age to 50.
- Medicaid for More. This is similar to #3 above, but uses the federal-state Medicaid program to provide a public option rather than the purely federal Medicare.
Got all that? Good. In my third and final installment, I’ll share some thoughts on where we might go with all this.