What Is Medicare for All?

We’re getting a lot of questions about Medicare for All. Is it possible? Is it a good idea? Is it American?

These questions stem from Sen. Bernie Sanders’ proposal to extend Medicare to everyone.

We won’t get into the politics of Medicare for All in this post — just the substance of the proposal and how it would work.

If you drill down beneath the politics, you can find some facts. Let’s start with the basics:

In This Article:

• What is Medicare?
• What is Medicare For All?
• How Would Medicare For All Work?
• Is Medicare For All A Good Idea?
• Medicare For All vs. Obamacare
• Will Medicare For All Ever Happen?
• What’s Wrong With Our Current Healthcare System?
• Why Does Healthcare Cost So Much?
• Medicare For All Tax Increase
• Would Medicare for All Reduce the Quality of Care?
• Alternatives to Medicare For All

What is Medicare?

Congress created Medicare back in 1965 during President Lyndon Johnson’s administration to provide government-sponsored health insurance for Americans 65 and older.

Originally, Medicare existed to insulate retirees without insurance from out-of-control hospital bills. Over the past half century Congress has expanded the program to cover doctor’s visits and prescription drugs.

But one thing has not changed: Medicare is available only to Americans 65 and older.

What is Medicare for All?

Medicare for All would remove the age requirement for Medicare, extending government health insurance to all Americans.

With Medicare for All, the government’s responsibility for providing Americans with health insurance would grow significantly.

Any American citizen could enroll in Medicare through the government rather than buying a health insurance policy or enrolling in an employer’s health care plan.

We would have a true national health insurance plan like many other developed countries.

How Would Medicare For All Work?

Under Sen. Sanders’ plan, Medicare for All would replace all other forms of payment, creating a true single-payer system.

Other proposals would let private insurance continue to exist but create a Medicare option for people who need it.

Single Payer Health Care Definition

Single payer means the government is the only source of money for health care expenses.

In our current system, when you visit a physician, the clinic’s staff can:

• File a claim with your private health insurance company.
• Send the bill to Medicare or Medicaid.
• Bill you if you don’t have insurance or your insurance doesn’t pay the entire bill.

Any of these choices can be the source of payment. Often, health care providers rely on all three forms of payment together.

In a single payer system, only the government is responsible for paying for your health care.

Is Medicare for All a Good Idea?

This is where things start to get political. Sen. Sanders says health care is a basic human right and that the government should provide it to everyone.

More moderate and conservative politicians believe Medicare for All would remove Americans’ freedom to choose their own brand of health care.

Let’s look at both sides of the debate:

Medicare for All Benefits:

• Simplicity: Medical insurance is super complicated. With so many variables it’s difficult to know what you’re expected to pay. Medicare for All could cut through the confusion and pay a pre-set amount.
• Accessibility: Millions of Americans can’t afford health insurance. Medicare for All could remove the burden of high premiums and deductibles by subsidizing the cost of healthcare with taxpayer money.
• More Health Care Choices: Most health insurance plans limit which doctors you can see. Medicare for All would work at any doctor.
• Cost Distribution: With such a large pool of participants — all 300 million+ Americans — costs could be shared more equitably.
• Efficiency: Currently, scores of health insurance companies provide the same or similar services, duplicating overhead costs which add to the overall cost of health care.

Disadvantages of Medicare for All:

• Government Control: As the single source of health care payments, the government could determine what kind of procedures it will or won’t pay for, limiting patients’ choices.
• Lack of Choices: If Medicare for All eliminated private insurance as Sen. Sanders has proposed, citizens couldn’t opt for more health coverage if they wanted, taking away choice.
• The Sudden Jolt: Health care spending accounts for nearly one-fifth of our national GDP. Suddenly restructuring such a huge sector of the economy could create shockwaves.
• It’s Too Expensive: Moving private health care expenses into the public sector would cost billions a month, crippling the federal government.

Whatever your political persuasion, health care spending is one of the most important issues voters face each election cycle.

We recommend giving a concept like Medicare for All a thorough independent analysis before aligning yourself with any political party or candidate.

Medicare for All vs. Obamacare

A lot of the questions we’ve gotten go something like this: Didn’t we already extend health care to all Americans back when Obama was president? Why are we still talking about this?

Yes, Congress did pass the Affordable Care Act of 2010 which most of us do call Obamacare.

But that law was a hodge-podge of changes made to existing systems, not a thorough overhaul of the way health care in this country works.

Obamacare made changes such as:

• Setting New Rules: The law set new guidelines for insurance companies to follow. Insurers couldn’t deny coverage based on a patient’s pre-existing condition, for example.
• Expanding Medicaid: The federal government allocated more money to state-run Medicaid programs to cover more lower-income children and adults.
• Subsidizing Premiums: The law called for the creation of healthcare.gov, the Healthcare Marketplace, where insurance shoppers can compare plans and apply for tax subsidies to help pay for premiums.
• Mandating Coverage: Obamacare required all people to buy health insurance. Having more healthy people buying insurance created more revenue for insurance companies, allowing them to afford the new rules above.

The end result of this legislation did extend health care to more Americans, but over the past decade some pieces of policy have eroded. The mandate no longer has a penalty, for example, and many states didn’t expand Medicaid.

Medicare for All would create a totally different approach to health care for Americans; Obamacare simply adjusted existing features to expand insurance.

Will Medicare for All Ever Happen?

The idea of a government-sponsored, single-payer health insurance program pre-dates Obamacare.

President Bill Clinton pledged to create such a program when he ran for office in 1992. The idea died in committee.

Prior to Clinton, in the 1960s, there was a push during President Johnson’s tenure to expand the then-new Medicare program to all Americans. This push resulted in Medicaid, a separate program for children and some adults with lower incomes.

Even Franklin Roosevelt back in the 1930s had the idea of government-sponsored health insurance as part of the New Deal.

Obviously, none of these pushes created Medicare for All. What about now? Could we see Medicare for All become a reality in the next few years?

The normalization of political stalemate in Washington, D.C., makes drastic changes to health care much less likely.

The answer to this question depends a lot on who gets elected president and whether Congress grows more progressive in the next couple elections.

What’s Wrong with Our Current Healthcare System?

Many Americans like their insurance just fine and don’t see the need to shake things up.

The truth is, we don’t have an actual health care system. Instead, we have a collection of separate systems, many of which work independently of but interdependently on each other:

• Employer-Sponsored Insurance: Large employers offer health insurance to their employees. Some companies let their employees choose from a few different plans. Typically, an employer pays a portion of the premiums as a work benefit.
• Marketplace Insurance: Obamacare created a more affordable way for people to shop for health insurance separately from their employer-sponsored programs. Income-based tax subsidies can help pay premiums.
• Government-Sponsored Health Insurance: Existing programs like Medicare and Medicaid cover senior citizens and lower income populations.
• No Insurance: About 28 million Americans do not have health insurance and would face the entire bill if they needed medical care. Sometimes uninsured people can’t pay their bill which becomes a drain on hospitals.

Health care costs a lot. A routine trip to the doctor can cost hundreds of dollars. A medical procedure may cost thousands. Getting hospitalized can cost hundreds of thousands.

These costs drive up insurance premiums and frustrate patients. A new health insurance system, whether it’s Medicare for All or another approach, could alleviate some of these problems.

Why Does Health Care Cost So Much?

Politicians like to talk about driving down the cost of health care to help patients. Is this possible, and can Medicare for All help?

Health care costs so much because of:

• Skilled Labor: Doctors, surgeons, radiologists, nurses, therapists — you want well-trained and experienced people caring for you. This kind of expertise is costly.
• Technology: From the MRI machine down the hall to the IV pump beside the bed, technology has become central to health care, and these tools are expensive.
• Demand: Health care isn’t immune to the cycles of supply and demand. Keeping up with the demand for health care drives up the cost. (Insurance can actually make this problem worse since it increases demand.)

With these kinds of market forces in effect, lowering the cost of health care would require more than just determination to do so. We’d need a systemic approach to alleviating these pressures without causing more stress on the system.

Health insurance companies have created Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) to reduce costs. These kinds of plans place limits on where you can get care.

Medicare For All Tax Increase

We hear about all these plans, but many of us wonder, would Medicare for All increase my taxes?

Yes! Creating a new, national insurance plan funded by the government would require higher taxes.

Proponents say these increases would pay for themselves by reducing or eliminating the premiums you’re paying for private insurance.

Opponents don’t want the government controlling such a huge portion of the economy.

In our current health care system we don’t always know how and when we’re paying for care. We also don’t know whose care we’re paying for.

For example, employers may pay most or all of their employees health insurance premiums.

This expense becomes part of a company’s bottom line and the company passes the expense along to others through the price it charges for its products.

If you buy a new Chevy Tahoe this year, you’re helping GM buy health insurance for its employees.

If you hire an HVAC company to install a new furnace in your house, you’re helping fund health insurance premiums for that company.

When you bought the phone or computer you’re using to read this, chances are you helped pay health premiums for somebody.

We also pay for others’ care through the prices hospitals charge. When an uninsured person can’t pay his or her $100,000 hospital bill, the hospital can’t simply ignore that lost revenue. The loss drives up the cost for others.

Any discussion about financing health care should consider all the hidden costs we pay.

Would Medicare for All Reduce the Quality of Care?

Would lowering the cost of health care lower its quality? This is often the case with factory-made products; is it true for health care, too?

Possibly. As a single payer for health care, the government could face a cost shortage and require hospitals to limit the cost for certain procedures or patient stays.

It is possible to lower costs without reducing quality. For example, the existing Medicare program stopped paying to treat hospital-borne patient infections about a decade ago. In response, hospitals created programs to reduce hospital-acquired infections.

Not every aspect of health care can work this way. If the government set a price ceiling on treating pneumonia and you weren’t well despite reaching your price ceiling, what would happen next?

Any kind of national health care system would need to allow room for the nuances of real life. Health care isn’t the same as a factory. People aren’t predictable.

What Are Some Alternatives to Medicare for All?

As the presidential campaign continues, we’ll hear more about Medicare for All. If you’re against the idea but want to do something to improve the health care system, here are some other possibilities:

• Recommit to Obamacare: Obamacare reduced the number of people without insurance in America between 2010 and 2019. In 2019, the number of uninsured started to increase again because the law had been eroded by court decisions and policy changes. Strengthening the law again would likely extend insurance to more people again.
• Medicare as a Choice: Keeping the current public-private hybrid system in place while expanding the public system to insure more people could help cover more Americans.
• Nationalized Regulations: States oversee insurance. Setting national standards could help level out the quality of care private insurance companies provide. Obamacare started this process. Public utilities work on this kind of model.

As you talk politics and plan to vote, we encourage you to consider all sides of the Medicare for All issue.