During the United States election, Medicare for All had once again become a hot topic. If enacted, Medicare for All would have a huge impact on the Americans currently enrolled in Medicare.
With all the contradictory opinions about Medicare for All, you may be feeling a bit confused about it. Here you will find more about this health care plan and what it involves.
Table of Contents
- What Is “Medicare For All”?
- Medicare: Current Program
- Medicare For All: How It Works
- Medicare for All: Cost
- Difference between Medicare for All and Original Medicare
- Medicare for All: Pros and Cons
What Is “Medicare For All”?
“Medicare for All” is an aggregation of legislative proposals intended to provide health care coverage to every American through a federal single-payer health insurance program. The single-payer systems can be found worldwide and may vary by what benefits they offer, how they are funded, who is eligible, and more.
If approved, Medicare for All, an expansion of the original Medicare program, will be tax-funded and provide coverage for all, regardless of age or health status.
Medicare: Current Program
Medicare program covers Americans aged 65 and older and people with disabilities and certain chronic health conditions. Medicare beneficiaries presently get coverage under Part A for inpatient and outpatient hospital services, nursing facility care, home health care, and hospice care, and Part B for doctors’ visits, diagnostic services, preventative care, and treatment services for medical conditions.
Under the current Medicare program, Medicare recipients can sign up for Part D, which covers prescription medications, but with some out-of-pocket costs. It does not cover costs for dental care, vision care, hearing exams, or long-term care.
Medicare For All: How It Works
Medicare for All is an extension of the existing Medicare program. It is intended to be much more generous and cover every medically necessary service. It would also provide coverage for dental and vision care, mental health care, and prescription medications. Consumers wouldn’t have to pay copays or deductibles, except for additional out-of-pocket costs for long-term care and a yearly deductible of $200 for prescription drugs.
The government determines the payment rates for medical services, drugs, and medical equipment. The Department of Health and Human Services would set the national budget each year and cap the expenditure. Only 1% of the total health spending budget will provide job dislocation assistance for individuals working in the insurance industry.
Medicare for All is single-payer healthcare, where the government pays for people’s health care without any deductibles, up-front costs, or premiums. The name “Medicare for All” sounds more appealing and makes the concept more popular. The program would create universal coverage for all Americans, regardless of age, health status, or income.
Medicare for All: Cost
The proposed single-payer healthcare system would prove costly for the government, resulting in higher taxes. The Mercatus Center at George Mason University has estimated the cost for the proposed program to be more than $32.6 trillion over ten years.
Medicare for All would be paid off by:
- 7.5% income-based premium from employers
- 4% income-based premium from households
- The progressive income tax rate
The marginal income tax rates would become:
- 52% on incomes above $10 million
- 50% between $2 million and $10 million
- 45% on income between $500,000 and $2 million
- 40% between $250,000 and $500,000
The Affordable Care Act would be replaced by Medicare for All and provide affordable, reasonable healthcare. The public would mainly fund this program through taxes, similar to Medicare and Medicaid.
Difference between Medicare for All and Original Medicare
- Eligibility: Medicare for All would create coverage for all regardless of age or health status. The present Medicare plan is only available to people aged 65 and older and some people with long-term disabilities and certain chronic health conditions.
- Broader Benefits: Medicare for All provides coverage for many services, including dental and vision care, hearing aids, reproductive, maternity, and pediatric care services, which are not covered under the current Medicare plan.
- Out-of-Pocket Expenses: You may have to pay for several out-of-pocket costs, including deductibles, premiums, coinsurance, and copays under the existing Medicare plan, whereas Medicare for All would eliminate such costs.
- Role of Private Insurance: Medicare Advantage plans, Medicare Supplement plan or Medigap, and Medicare Part D prescription drug coverage are administered by private insurers. Elimination of the private insurers would require a major overhaul of the current Medicare program.
- How It Is Financed: The present Medicare system has many funding sources. For instance: Medicare Part A is paid for with payroll taxes and some participant cost-sharing, while Part B and Part D are financed with beneficiary premiums, patient cost-sharing, and general tax revenues. Medicare for All would be financed entirely by taxes.
Medicare for All: Pros and Cons
Though the arguments are in favor of Medicare for All due to the universal coverage and limit escalating health care costs, critics contend the program would be expensive and question how the government can effectively handle such a massive system.
- Enrollment under a single plan guarantees universal coverage, especially for economically vulnerable people.
- Reduce out-of-pocket expenditure for individuals.
- The government could control the price of medications and medical services through regulation and negotiation.
- Individuals could switch jobs without losing their existing plan or health care coverage.
- Providers would expend less money and time on administrative activities since they would have to deal with only one government agency rather than multiple private insurance companies.
- Healthcare providers would be required to provide the same standard of service at a low cost rather than targeting wealthy clients or pushing expensive services.
- Some experts believe that the government may not leverage its bargaining power to significantly reduce costs quickly.
- Due to the affordability of health care, there would be an increased demand for services, resulting in greater congestion in the health care system.
- A minority of Americans would have to pay higher taxes to finance the program.
- Healthcare professionals may be less incentivized to provide quality care if they aren’t paid well. In addition, providers may leave the healthcare sector for better opportunities.
- A single-payer system may take time to explore newer, more expensive treatments. The government could also limit services with a low probability of success or cover prescription drugs for rare conditions.
The Bottom Line
It is too early to say whether Medicare for All has any reasonable chance of actually becoming law. It points out what is wrong with the current health care system and encourages both political leaders and the public to think about all possible options for fixing it.
While multiple single-payer proposals for healthcare in America, Medicare for All is the most popular and supported, as a single-payer program, Medicare for All would provide comprehensive healthcare benefits to all Americans at no up-front cost. It would be primarily tax-funded, use a fee schedule for provider payments, and cover all essential health benefits.