Medicare for All is a proposal to extend Medicare coverage to Americans who do not currently qualify based on age or disability.
If you pay even a little bit of attention to the news, you’ve likely read or heard politicians mention Medicare for All. It can be difficult, though, to separate facts from politics. That’s why this post sticks to the facts, explaining what Medicare for All means, how it would work, and who would pay for it.
What Does Medicare for All Mean?
The answer to this question depends on who you ask. That’s because the proposal means something different to each of the politicians who either support or oppose it. Even so, there are only two basic scenarios.
In the first scenario, Medicare replaces all other health insurance. What’s more, it greatly expands Medicare coverage while eliminating all out-of-pocket costs. This version of Medicare for All covers all necessary services, including prescriptions, vision, and dental care. However, you could buy private insurance to cover non-essential services, such as cosmetic surgery.
Proponents of this approach state that healthcare is a right and should be free.
The second concept more closely resembles the Affordable Care Act (ACA, also known as Obamacare). In this scenario, you can keep your private insurance or choose the Medicare option. This is where more variations enter the picture in terms of coverage. Some proponents say Medicare for All should cover everything, including dental and vision. Others stick pretty close to what Medicare currently offers. However, all of them include some level of out-of-pocket costs for beneficiaries.
Proponents of this approach point out that all countries with universal healthcare employ a cost-sharing model. They feel makes it more affordable and ensures the system is not inundated.
All groups state that the Department of Veterans Affairs and Indian Health Services would continue unaffected by Medicare for All.
What Would Medicare for All Cost?
Nobody knows for sure, but estimates range from $1.3 trillion to $2.8 trillion per year.
Most experts think that $2.8 trillion is the more accurate estimate. It represents around 16 percent of the GDP. However, current medical spending is already 20 percent of the GDP. The difference is that citizens (i.e. you and I) pay a significant portion of that 20 percent.
One group, The RAND Corporation, assumes total healthcare spending will be much higher: $3.8 trillion. They base their estimate, in part, on the idea that, if people don’t have any out-of-pocket costs, the rate at which they seek treatment will increase. In other words, if it’s free, they’re more likely to go to the doctor.
However, RAND doesn’t limit its higher estimate to higher usage. The group also believes people will choose more elective services, even ones they have to pay for, since they won’t have to pay for medically necessary care. This means that their $3.8 trillion isn’t much different than the $2.8 trillion, at least as far as what the government would pay.
How Would We Pay for Medicare for All?
The federal government is the short answer as to who pays for Medicare for All. The longer answer, again, depends on who you ask.
The politicians who sponsored the Medicare for All bill believe we can drive down healthcare costs thanks to the massive bargaining power of the government. In addition, they propose redirecting current government spending in the amount of $2 trillion a year. They also want to raise taxes on anyone making over $250,000 per year, with an even higher tax rate on those earning over $10 million per year. Finally, they suggest levying a “wealth tax” on America’s top 0.1 percent.
These politicians also want to allocate 1 percent of total healthcare spending to assist those currently employed by the insurance industry. After all, this plan means they’ll be out of work.
Included in the Medicare for All bill is a four-year rollout that drops the Medicare eligibility age by 10 years every year. So, year one would be 55, year two 45, and so on.
The Pros and Cons of Medicare for All
Most proponents believe that the increased taxes won’t present a problem. This is because people won’t be spending money on insurance premiums and other out-of-pocket costs. At the same time, corporations won’t have the expense and hassle of providing insurance. They would be able to pay employees more, or even expand operations and hire more people. The result would be more Americans employed and earning a living wage, which would create a larger income tax pool.
Those who oppose a single-payer system disagree. These politicians consider it cost-prohibitive. They also point out that medical providers would make less money and believe it threatens quality of care. (Although it should be stated that some experts think providers would be better off because they would never NOT be paid.) Finally, most opponents of Medicare for All believe the program would be too expansive and complicated for the government to run it efficiently.
What Would Medicare for All Mean for Current Medicare Recipients?
If you currently have Medicare, Medicare for All would likely improve your coverage. That’s because even the modified versions include coverage for items like dental care, prescriptions, and vision.
You would also likely see a reduction in your out-of-pocket costs, even under the modified plans. The reason is similar to why ACA originally required everyone to have insurance: it’s cheaper.
It should come as no surprise that healthcare is more costly as we age. One of the greatest risk factors for nearly every chronic condition is basically time. The longer you live, the more likely you are to develop high blood pressure, diabetes, and more. Younger, healthier people paying into the system – and using it less often – help keep everyone’s costs down.
Latest posts by Kolt Legette (see all)
- The Connection Between Social Security and Medicare - August 15, 2019
- What Is Medicare for All? - August 6, 2019
- How to Get the Most Out of Your Fitness Tracker - May 23, 2019