5 Things to Know About ‘Medicare For All’

5 Things to Know About ‘Medicare For All’

Our Thinking / Healthcare /

5 Things to Know About ‘Medicare For All’
Calendar02 August 2018

Should Democrats win control of the House and/or Senate in November, calls for a “Medicare for All” system are likely to grow louder. A variety of plans are being offered by lawmakers as well as think tanks. The proposals range from letting individuals and small groups buy into Medicare to legislation from Senator Bernie Sanders (I-VT) that would create a true "single-payer" system, eliminating employer-based coverage and enrolling all Americans in one, government-run plan.

A new analysis from the libertarian-leaning Mercatus Center at George Mason University in Virginia projects that Sanders’s “Medicare for All” plan would increase government health care spending by $32.6 trillion over 10 years. That estimate has garnered quite a bit of attention over the past few days. For those questioning the cost, the Urban Institute came up with the exact same number in 2016.

Here is what you need to know:

  • How much will it cost? Cost to taxpayers will be $2.5 trillion to $3 trillion a year. Although people wouldn't pay premiums, the tax increases on individuals and employers could be very substantial and it’s likely that many people would pay more in additional taxes than they save on premiums. After taking into account current government health care financing, the study estimated that doubling all federal individual and corporate income taxes would not fully cover the additional costs.

  • Aren’t there savings? All hospitals and doctors would be expected to accept payment based on the lower Medicare rates for all their patients. Savings on prescription drugs, $846 billion over 10 years, would come from the government buying directly from drug makers. Savings from streamlined administration would be even greater, nearly $1.6 trillion.

  • So, why does it cost so much? Other provisions would tend to drive up spending, including coverage for nearly 30 million currently uninsured people, no deductibles and copays, and improved benefits, including dental, vision and hearing.

  • Who loses? Doctors will be paid less, and so will drug manufacturers. Will this have an impact on physician time with patients? Medical innovation? Future supply of doctors and nurses? Will it lead to medical rationing? And what is lost if the employer-based system is eliminated?

  • What do Americans think about Medicare for All? According to the Kaiser Health Tracking Poll from March 2018, “six in ten (59 percent) favor a national or Medicare for All plan, including a majority of both Democrats and independents and about one-third of Republicans.:

Support for such a proposal increases when framed as an option for anyone who wants it, but people who currently have other forms of coverage can keep the coverage they already have, both among the general public (75 percent) and among partisans (87 percent of Democrats, 74 percent of independents, and 64 percent of Republicans). This isn’t surprising, as our research has shown that the majority of employees view employer-sponsored insurance to be just as important as getting a salary. It is unclear how support would fare if these proposals became part of the larger public debate, as previous KFF polling has found the public’s attitudes can be quite malleable.

So what’s the likelihood of one of these proposals becoming law? My colleague Geoff Manville says it’s highly unlikely unless and until Democrats win the White House and full control of Congress, including a filibuster-proof 60-seat majority in the Senate. Still, employers and individuals need to consider how movement toward a single-payer system or a system that otherwise builds on Medicare and/or other public programs would affect private coverage and plans. Of course, this is only the beginning of this debate. Fasten your seatbelt – it’s going to be quite a ride!

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