Medicare for All is a proposed new healthcare system for the United States in which everyone would be enrolled in a federally administered program rather than receiving health insurance through an insurance company.
With few exceptions, such as cosmetic surgery, a Medicare for All law would replace all other insurances.
Medicare for All would replace private insurance, employer-provided insurance, Medicaid, and our existing version of Medicare.
How the Medicare for All System Works
Medicare for All is actually more generous than Medicare.
Currently, Medicare is limited to Americans aged 65 and older. They receive care, but they also bear a portion of the associated expenditures.
Medicare for All, as proposed by Sanders, would be a single, national health insurance policy covering all U.S. residents. It would cover all medically essential services, such as dental and eye care, mental health care, and prescription medications.
Except for prescription pharmaceuticals, there would be no copayments or deductibles, but the cost would stand at $200 per year. Long-term care may incur additional out-of-pocket expenses.
The government would establish payment rates for pharmaceuticals, medical services, and medical equipment. The Secretary of Health and Human Services would annually develop a national budget for all covered services, and expenditure would be constrained by this budget. Only 1% of the overall health-spending budget would be to offer job loss support to insurance industry employees.
Sanders’s legislation contains a four-year phase-in period during which younger individuals might purchase Medicare coverage. In the first year, 55-year-olds would be eligible to enroll in Medicare, followed by 45-year-olds in the second year and 35-year-olds in the third year.
Everyone enrolling in Medicare would incur less out-of-pocket expenses. People of all ages would also have access to a public option health plan through Obamacare exchanges.
Effectively, Medicare for All is single-payer healthcare. In a single-payer healthcare system, the government pays for individuals’ medical treatment.
The Cost of Medicare for All
If nothing changes, private and public sector expenditure on healthcare will surpass $45 trillion by 2026.
Over a decade, the libertarian-leaning Mercatus Center at George Mason University calculated that Medicare for All would cost more than $32 trillion.
During the 2016 campaign, Kenneth Thorpe, a health finance expert at Emory University, examined a variant of Sanders’ Medicare for All. He projected the cost to be over $25 trillion over a decade.
Sanders has proposed shifting existing government expenditure of around $2 trillion per year into Medicare for All to fund the program. To do this, he would increase taxes on incomes over $250,000, with the marginal rate reaching 52% on incomes over $10 million. Additionally, he proposed a wealth tax on the wealthiest 0.1% of households.
Pros and Cons of Medicare for All
The benefits and disadvantages of this program rely in part on your income level.
If your annual income is less than $250,000, Sanders’ new tax will have no effect on you. If you earn more than $250,000 per year or belong to the top 0.1% of families, Sanders’ proposed levy to fund Medicare for All would be detrimental to you.
In addition, universal healthcare forces the healthy to pay for the medical care for the sick.
Nevertheless, this is how all health insurance schemes function. Everyone purchases and pays for health insurance. The insurance company will only pay for medical care or coverage when it is required.
In any insurance plan, the healthier individuals cover the expenditures imposed by the ill individuals.
Here are some of the most significant advantages of a Medicare for All system:
- Because the government regulates and negotiates the prices of medications and medical services, universal healthcare reduces healthcare expenses for the economy as a whole.
- It would also remove the administrative costs associated with negotiating with several private health insurers. Rather than dealing with various commercial insurance companies in addition to Medicare and Medicaid, doctors would just have to deal with one government organization.
- Carriers would save money since they would not have to pay personnel to cope with the regulations of several health insurance companies.
- Same healthcare at a lower price: Hospitals and physicians would be required to give the same level of care at a reasonable price, rather than focusing on rich patients and delivering expensive treatments to increase their profits.
On the other hand, here are some possible disadvantages of Medicare for All:
- Some analysts are concerned that the government may not be able to utilize its bargaining advantage to reduce prices as rapidly and as dramatically as Sanders anticipates. Thorpe contends that Sanders’ outlook on this component of the measure is excessively positive.
- Other analysts are concerned that shielding individuals from healthcare expenditures may increase the utilization of medical care. The director of the Kaiser Family Foundation, Drew Altman, said “no other industrialized country has zero out-of-pocket payments.”
- If there is no financial incentive for people to take care of their health, they may not be as conscientious.
- Lessening the incentives for physicians, governments must limit healthcare spending to keep prices down. If physicians get poor compensation, they may be less motivated to deliver great care. They may spend less time each patient to reduce expenses. In addition, they have less financing for innovative life-saving technology.
- Since the government prioritizes delivering basic and emergency healthcare, the majority of universal healthcare systems report lengthy wait times for elective operations. The government may also restrict services with a poor likelihood of success and refuse to cover medications for uncommon diseases.
Bottom Line
Healthcare is undoubtedly a popular issue.
Medicare for All, as proposed by Bernie Sanders, would eventually eradicate all other types of insurance. However, some Democratic contenders support and propose variants of a universal healthcare system to varied degrees.
Medicare for All would likely reduce healthcare costs in the economy as a whole, increase the quality of care, and facilitate more preventative care to avoid costly emergency room visits.
However, those earning more than $250,000 per year or living in the top 0.1% of households could end up paying more.