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Beware the Trade-Offs for “Medicare for All”

In 2017, Senator Bernie Sanders introduced legislation that would expand Medicare into a universal health insurance system for the country. The bill, known as Medicare for All, was supported by at least 15 Democratic senators and would provide universal health coverage without any premium costs for consumers.

Senator Sanders believes that the healthcare system in America needs to be completely overhauled. Over the past five years, premiums have doubled and deductibles have gone up 40 percent. Many insurance plans have small networks that only offer a limited number of providers and hospitals. When the closest hospital is outside the network, this can lead individuals to run up extensive bills if there is an emergency.

How Would It Work

According to Sanders and his supporters, Medicare for All would build on the Affordable Care Act, which allowed millions of Americans to obtain health insurance. But proponents of universal healthcare believe that the federal government could do more. There are still 29 million Americans without health insurance, and millions remain underinsured because they can’t afford the high copayments and deductibles their policies require.

Medicare for All would separate health insurance from employment. It’s billed as a healthcare proposal that would spur innovation and allow people to live healthier lives. Employers would no longer spend time focusing on how to provide health insurance to their employees and spend more time focusing on growing their business.

The plan would create a federally administered single-payer healthcare system, covering inpatient and outpatient care, including long-term, primary and specialty care. Prescription medications, vision, dental, hearing, mental health and substance abuse coverage would also be included under this proposal.

Estimated Costs

In July 2018, the Mercatus Center at George Mason University reported that the program would cost the federal government around $32 trillion over a 10-year period. Sanders suggested when he introduced the bill that most Americans would support a tax increase if it meant household healthcare costs would be reduced. Critics of the idea say that the estimated cost would be difficult for the federal government to absorb. The Mercatus Center is not alone in its estimates as the Urban Institute came up with similar figures in 2016.

Other Countries

Canada currently has a single-payer system that has been implemented successfully, which many proponents of Medicare for All use to demonstrate how the program could work in the United States. Canadians pay about the same in income taxes as Americans. However, in a 2017 comparison of 11 high-income countries, Canada’s healthcare system ranked ninth and the United States ranked last. In addition, Canada covers most medical needs, but people often purchase a second, private plan for unmet health needs like prescription drugs. In Britain, the government owns hospitals and employs specialists via the National Health Service. There are often long waits for care in Britain, which is addressed by a small private system that caters to wealthier people who want faster access to treatments.

The problem in comparing the United States to other industrialized nations with universal healthcare systems is that it’s much bigger from a population standpoint. Implementing a federal single-payer program would not only cost more but require a complete overhaul of the way the system works now.

As an example, hospital rooms in the U.S. are generally private or shared with one other person. In England, patients are more likely to be put in a ward, which could hold up to 24 beds divided into smaller sections based on level of care. European hospitals tend to be housed in older buildings that may not have started out as healthcare facilities, so planners conserve space and architectural integrity with a different setup than Americans are used to. A nationalized healthcare system would require American providers to rethink how they plan, build and administer hospitals – and this is just one instance of change.

Cost Negotiations

Proponents argue that a single-payer system could actually save money through healthcare cost negotiations. The federal government would be able to negotiate prescription drug and other healthcare costs. This means the $32 trillion could be cut somewhat if healthcare costs can be reduced. Administrative and pharmaceutical costs are much higher in the United States than they are in other high-income countries. Doctors also earn significantly more here as well, partly because there are more specialists – only 30 percent of practitioners in the U.S. are generalists – and specialists demand higher pay for their skills.

Under the Medicare for All plan, doctors would be paid about 10 percent less. It’s significant to note that a similar program proposed in Vermont was not pursued by the governor because it would mean an 11.5 percent increase in payroll taxes on businesses as well as a 9.5 percent income tax increase.

Gaining Momentum

Since Sanders presented the bill, the idea has been gaining momentum, even though he has yet to explain how his proposal would be financed. One New York Times poll found that 51 percent of Americans and 74 percent of Democrats supported the idea of a single-payer system. But a 2017 poll by the Kaiser Family Foundation found that support for the program dropped significantly when respondents were told taxes may increase or that the government could have more control over healthcare. There is also some confusion among Americans about how universal healthcare would work. Many polled believed they could keep their current health insurance under a single-payer plan, something that is not true.

There are still many variables that must be addressed regarding Medicare for All. There has been no discussion about what would happen to jobs at private insurers, although some believe those jobs could be repurposed into positions with the federal government. As Democrats start throwing their hats into the ring for the 2020 presidential election, healthcare will take center stage as a leading platform issue.

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