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Medicare for All: What Americans Can Expect

Medicare for All: What Americans Can Expect

By    |   Tuesday, 24 March 2020 05:53 PM

The Medicare for All bandwagon is gaining steam, even as many Americans still don’t fully grasp what a single national health care plan would mean in their lives.

“As Congress and the Democratic presidential candidates continue to discuss Medicare-for-all and other proposals to expand public health coverage, most Americans know little about how the leading Medicare-for-all proposals would reshape the way all Americans get and pay for health care,” said the Kaiser Family Foundation, in a 2019 survey on Medicare for All and U.S. health consumers.

“On most major features of the Medicare-for-all proposals, majorities of Americans are unaware of the kind of dramatic changes that the plans would bring to the nation’s health care system,” the Foundation reports.

Consider these eye-opening takeaways from the Kaiser study:

  • 69% of survey respondents say that people would continue to pay deductibles and co-pays when they use health care services. That’s not the case, however, as the leading Medicare-for-all bills propose eliminating that kind of cost-sharing;
  • 55% say people who are covered through their jobs would be able to keep that coverage. Again, that’s just not so, as Medicare-for-All new national health plan would replace that coverage.
  • 55% say people who buy their own insurance would be able to keep their current plans. The fact is, these health care consumers would also be included in a new national plan under Medicare-for-all.
  • 54% say individuals and employers would continue to pay health insurance premiums. In reality, the Medicare-for-all bills would eliminate such premiums, with the funds coming from sky-high tax hikes on U.S. residents.

“Most voters – and even some of the candidates running for President – don’t have a shared understanding of what “Medicare for All” is,” said Beth Halpern, an attorney who specializes in Medicare cases for Hogan Lovells, a global law firm based in Washington, D.C.

Halpern said that most of the ideas discussed under the Medicare for All name aren’t Medicare as Americans know it, but are instead a single national program that would replace existing types of coverage and would be funded by taxes instead of premiums and cost-sharing.

“The debate about Medicare for All raises a lot of questions about the taxes needed to pay for such a program, whether the benefits under a new plan would be better than what people have now, and what effect it would have on employment,” Halpern noted.

That said, consumers are desperate for relief from health care costs and the uncertainty about those costs, and Medicare for All does aim to alleviate those concerns.

“Medicare For All in its purest form almost waves a magic wand to make consumer cost-sharing disappear,” said Deb Gordon, author of the book, The Health Care Consumers Manifesto. “Free or near-free health care for all would ease financial worry for millions of Americans who are uninsured, underinsured, and simply struggling to pay for health care expenses. Gone would be the phenomena of medical bankruptcy and one-third of GoFundMe campaigns that aim to cover health care costs.”

On the other hand, taxes would likely rise to pay for such an expansive plan.

“Even though more than half of Americans surveyed reported being willing to pay more taxes to get better health care access, tax increases are generally a hard sell politically,” she said. Also, as many Americans struggle with health costs, most people — especially those with employer-sponsored insurance — appreciate their health plan. The upheaval required to implement a full Medicare For All plan would be so disruptive, we can’t even anticipate all the implications.”

Getting a Grip on Medicare for All

A widespread lack of understanding on the Medicare for All issue isn’t just a political problem – it’s a serious health care issue, as well.

To gain a better understanding of Medicare for All, InsuranceQuotes.com reached out to multiple health care industry experts to properly lay out what single payer health care is, how it will impact Americans if enacted by Congress, and what it will cost to implement, among other key issues.

Largely defined, Medicare for All is a single national health care for Americans of all ages. It seeks to replicate the structural model of traditional Medicare, which offers free health care for Americans aged 65-and-over, most of whom paid into Medicare via payroll taxes.

Under the various Medicare plans proposed by politicians, advocacy groups and public policy think tanks, Medicare for All would replace all current public and private health care insurance.

For a good example of what Medicare for All would actually look like, let’s examine the plan introduced by Bernie Sanders, U.S. senator from Vermont and candidate for the Democratic Party nominee for President in 2020 sanders.senate.gov/download/medicare-for-all-2019-summary?id=FA52728F-B57E-4E0D-96C2-F0C5D346A6E1&download=1&inline=file.

The Sanders plan, which is widely accepted as the blueprint for Medicare for All plan, “would create a federal universal health insurance program to provide comprehensive coverage for all Americans including inpatient and outpatient hospital care; emergency services; primary and preventive services; prescription drugs; mental health and substance abuse treatment; maternity and newborn care; pediatrics; home- and community-based long-term services and supports; dental, audiology, and vision services.”

There are some exceptions under the Sanders Medicare for All plan. For example, the Veterans Health Administration and Indian Health Service would continue to offer their own member health care plans, and would not be included in Medicare for All.

For Patients. The Sanders plan would cover all basic medical services for patients. Enrollees in the plan would also gain the following benefits:

  • Patients would choose their own doctor.
  • There would be no deductibles, no copays, and no unexpected bills for out-of-network services, no copays.
  • A plan enrollee who switched jobs would not have to change insurance plans and coverage would remain seamless.

For Providers. If enacted, the Sanders Medicare for All plan promises to let medical practitioners spend more time with their patients and less time on paperwork.

“A universal health care system will also allow the country to invest more resources in provider education and training, and make smart investments to avoid provider shortages and ensure communities can access the providers they need,” the Sanders plan states.

For Employers. U.S companies would also see dramatic changes in their health care plan experience. No longer would employers be in the business of sponsoring and maintaining employee health care plans.

Instead, companies would simply pay a payroll tax to the U.S. government, which would go into the Medicare for All budget.

Medicare for All vs. Single Payer

There are some important distinctions – and many similarities- to be made between Medicare for All and single payer healthcare.

“Medicare is the federal health program for seniors and some people with disabilities,” said Lindsay Engle, a Medicare expert at MedicareFAQ, an online Medicare information platform. “Currently, Medicare has a network and doesn't cover everything a patient might need.”

Currently, private companies are engaged in the Medicare industry. “Some people on Medicare have extra private insurance in the form of an Advantage plan or Medigap policy,” Engel added.

Single-payer health care is akin to Medicare for All in that it handles all financing, claims, and benefits. But some countries do things a little differently.

“For example, the UK allows citizens to buy extra insurance for shorter wait times,” Engel noted. “Some countries also have copayments or coinsurances that the citizen pays.”

17 Countries That Operate a Single-Payer Healthcare System:

1. Canada
2. Japan
3. United Kingdom
4. Norway
5. Finland
6. Italy
7. Portugal
8. Iceland
9. Spain

10. Denmark
11. Sweden
12. United Arab Emirates
13. Kuwait
14. Bahrain
15. Brunei
16. Slovenia
17. Cyprus

Sanders’s Medicare expansion is designed to transforming into a single-payer system. “For example, Medicare for All would eliminate networks and cover care that Medicare doesn't currently approve,” Engel said. “Additional care would include long-term care, dental, vision, and hearing services.

Furthermore, Sanders says with his plan, there would be no copayments or deductibles. “For many, Medicare for all means a new quality of life; no premiums, no deductibles, and no hassles,” Engel said. “If a doctor orders a test or procedure, it's obviously necessary. And, the patient shouldn't need to fight with an insurance company to have coverage.”

What Happens to Private Insurance?

Perhaps the most significant difference to U.S. health care consumers would be the elimination of private insurance, if Medicare for All is enacted.

Based on the language in the Sander’s plan, any company or organization that offered health care benefits that are similar to Medicare for All plan services would be breaking the law.

That would include basically every primary health care services, such as emergency room visits, general practitioners, prescription drugs, and pediatric services, among other medical care services.

Sen. Sanders has gone on record stating that private health care insurance is eliminated under Medicare for All, stating that for single-payer health care to succeed, “you need to get rid of insurance companies.”

What Happens to Doctors?

The outlook for physicians in a Medicare for All future could be problematic, income-wise – and that could reduce the number of doctors across the U.S.

“In July 2018, Charles Blahous of the Mercatus Center calculated the cost of single payer/Medicare for All program,” said Deane Waldman, MD and former director, Center for Healthcare Policy, Texas Public Policy Foundation. “He reported a cost of $32.6 trillion over 10 years. This means Medicare for All will nearly double current unsustainable spending.”

Basically, funding for “Medicare for All” would consume all the money we currently expend on other national priorities such as education, military, infrastructure, and security.

“Blahouse estimated that paying for “Medicare for All” would double both federal individual as well as corporate taxes,” Waldman said. “To keep the cost at “only” $32.6 trillion, professor Blahous projected a 40 percent reduction in payments to physicians. H.R. 1384 would drive a large number of doctors out of clinical care and would provide a powerful disincentive to anyone considering a career as a care provider.”

“As a result of “Medicare for All,” timely care would likely become a fond memory.”

Medicare Cost and the Impact on the U.S. Economy

There’s no getting around it, the price tag on Medicare for All is going to be significant.

“The price will be costly - we're talking about insuring over 300 million people,” Engel said. “Over the course of a decade, expect the cost for Medicare for All to range between $30-to-$40 trillion.”

Comparatively, the entire U.S. federal budget for 2018 was $4.1 trillion, and that’s a problem.

“One year's worth of federal budgets isn't going to cover ten years of national healthcare,” Engel added.

Consequently, $4.1 trillion in budgets multiplied by ten years of funding equals $41 trillion. “That's more than Sanders estimate of $30 to $40 trillion in costs to insure every American,” Engel said. “Plus, tax increases are sure to follow a massive healthcare reform.”

Overall, 22 studies predict single-payer healthcare would save the U.S. money over several years. “Even a right-wing think tank found single-payer Medicare for All would save us about $2 trillion over 10 years,” Engel said. “Another study at the University of Massachusetts discovered Medicare for All could lower health care costs, resulting in over $5 trillion in savings.”

Given the fact that a single day hospital stay in the U.S. often costs more than $5,500 (compared to $700 in a country like Australia, and that industry researchers state that private health insurance were paid, overall, 2.4 times the Medicare rates in 2017, and nearly three times the rate for outpatient care, cutting costs is a big selling point for Medicare for All advocates.

“If those plans had paid what Medicare allows, their spending would be reduced by over half,” said Morton Tavel, MD., and clinical professor emeritus of medicine at Indiana University School of Medicine. “Most economists think hospitals could do just fine with far less than they get today from private insurance.”

“While many hospitals ostensibly operate on the thinnest of margins, that is in part a choice that results from extravagance stemming from sources such as fancy gardens and amenities, unnecessary duplication of facilities and equipment, and others,” Tavel added.

Currently, the U.S. is currently spending about 18% of its gross national product (GNP) on health care, amounting to about $3.5 trillion dollars.

“If we were to reduce this total in line with other countries such as Canada, which spend little more than half this amount, we could save as much as $1.5 trillion yearly without sacrificing any negative effects on health or mortality,” Tavel said.

“A national Medicare program here could be a major force to rein in costs by setting limits to prices of virtually all services, most notably hospital and drug charges. Such reduced expenses, although admittedly requiring some time to reach, would reduce or eliminate the need for tax increases.”

Given the nation’s current healthcare pricing, a Medicare for All type program, operating with lower administrative costs, would be far cheaper than those offered by the private sector, Tavel added.

“This would allow employers to willingly relinquish expensive private plans in favor of the cheaper public option that would reduce the cost burden of extra employee benefits,” he said. “It also means that the public option would likely supplant the present private plans completely in short order.

That does not necessarily mean that Medicare for All would spell doom for private insurance?

“Medicare Advantage Plans currently provide an alternative to pure Medicare,” Tavel said. “They are offered by private companies approved by Medicare, consisting of "bundled" plans to include various Medicare components, where Medicare pays a fixed amount monthly to the companies offering these Advantage Plans for each covered person.”

These companies follow Medicare rules that may allow different out-of-pocket costs, specialist referrals, and restrictions governing the coverage for facilities and doctors outside their own systems.

“Consequently, a Medicare-for-all plan would thus likely evolve into a combined public/private hybrid similar to the options offered to current Medicare recipients, but would differ from an independent and separate “public option” as currently proposed,” Tavel noted.

“Given these facts, those advocating “improving” on Obamacare would likely see an unanticipated and welcome rapid morphing into a Medicare for All scenario across the U.S.”

Is Medicare for All Worth It?

Medicare for All proponents envision an idyllic national health care system with doctors being able to focus on patients and their practice without worrying about insurance, and patients being able to get the care they need without worrying about coverage, Engel said.

“Based on our research from multiple sources, we found a single-payer reform would save money,” she noted.

It would also generate a massive shift in where consumer health care money goes in the U.S. “In 2018, the top five health insurers made $21 billion in profits,” Engel said. “Meanwhile, tens of thousands of American families face bankruptcy due to medical debt and an average of 14% of all medical claims are denied - that's over 200 million claims a day.”

Perhaps Medicare for All, single-payer healthcare can transform the way we manage our health. We need affordable quality care, and based on research, single-payer healthcare could be the answer, she added.

“Understandably, change is scary,” Engel added. “But, when we put faith over fear and people over profits, we're going to come out on top.”

Downsides to Medicare for All

Other health care experts aren’t as positive about Medicare for All, citing loss of freedoms and choices for U.S. health care consumers

The following are the likely effects of Medicare for All, as cited in n H.R. 1384,, i.e., Medicare for All Act of 2019, which was introduced in February, 2019), according to Waldman:

  • Enhanced public dependence of federal government.
  • Limited options for both patients and physicians.
  • Elimination of profit motive and market competition.
  • Federal control of prices and payments.
  • Suppression of innovation.

“The fact is, more people will demand care,” Waldman said. “The physician shortage will be worse and wait times to receive care will go up. Additionally, buyers (patients) have no incentive to save money as the U.S. government deploys medical rationing and makes life-and-death medical decisions.”

In Waldman’s view, Medicare for All, offers a clear picture of what will happen to healthcare when totally controlled by Washington insiders. “Access to care will decline, spending will rise, taxes will double, and personal freedom will be traded for entitlement,” he said.

Let the people in their states decide their own healthcare,” Waldman added. “People will get the care they need at prices they can afford and Americans will no longer be forced to waste more than a trillion healthcare dollars on federal bureaucracy.”

Brian O’Connell is health insurance analyst at insuranceQuotes.com.

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The Medicare for All bandwagon is gaining steam, even as many Americans still don’t fully grasp what a single national health care plan would mean in their lives.
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Tuesday, 24 March 2020 05:53 PM
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