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What is Medicare for All?

May 01, 2019
Medicare for All first became a fixture in the national political conversation in 2016, when Senator Bernie Sanders (D-VT) presented his plan for universal medical insurance during his Democratic presidential campaign. Since then, the idea has only gained traction in the political sphere, with several Democratic frontrunners for the 2020 presidential election announcing their support for Sanders’ plan.[1]

While Medicare for All has traditionally referenced the plan developed by Sanders, it has since become a catch-all term for universal single-payer health insurance policies. However, the labels used to advertise Medicare for All are misleading because Medicare itself is not a single-payer system. Currently, private insurance companies manage care for some patients under Medicare, so the government is not the single payer of medical claims.[2]

In the United States, there are a range of possibilities for expanding health insurance coverage, but there is a lack of consensus about which of these possibilities would work the best. A policy could abolish the private health insurance industry, it could create a “public option”, a government plan open to everyone on the marketplace exchanges created by the Affordable Care Act (ACA), or it could make other changes with the intended result of expanding the populations eligible for government-subsidized insurance coverage. Though all of these changes attempt to expand health insurance coverage, the amount of support behind each of these proposals varies. In March 2019, 62 percent of respondents in a Kaiser Family Foundation poll said they had a positive reaction to the term “Medicare-for-all”, while only 48 percent had a positive reaction to the term “single-payer health insurance system.”[3] This suggests that the intricate features of a health reform plan as well as the way it is presented to the public can potentially affect public opinion surrounding it. To provide insight into the current health insurance debate, Wonk Tank has answered some common questions about universal single-payer health insurance here.

Image: There are varying amounts of support for the different terms used to describe national...Image: There are varying amounts of support for the different terms used to describe national health insurance programs. Source: Kaiser Family Foundation

What does our current version of Medicare look like?

Medicare is a federal health insurance program created in 1965 to provide coverage for Americans aged 65 and over, regardless of their health, income, or medical history. The program has since been expanded to cover people diagnosed with end stage renal disease or Amyotrophic Lateral Sclerosis (ALS). Additionally, it covers people under 65 who have received Social Security Disability Insurance (SSDI) payments for at least two years. The program is comprised of four parts. Three of the four cover inpatient hospital services, outpatient services and provider visits, and prescription drugs, respectively. The other part allows patients to select an alternative but comparable private health plan, and this component is what excludes Medicare from being classified as a single payer system.[4] Today, Medicare accounts for 15 percent of federal spending, and the program covers over 58 million people.[5] It is financed through a payroll tax, beneficiary premiums, and a trust fund.[6]

How is universal health insurance different than our current health insurance?

Currently, our system of Medicare has limited eligibility, so there are groups of people who remain without affordable health insurance coverage. Since World War II, in the U.S., healthcare coverage has largely been provided as an employee benefit, so many Americans who do not receive health insurance through their jobs or who live in states that did not expand Medicaid remain uninsured. In 2017, the U.S. Census Bureau reported that 28.5 million people did not have health insurance at any point during the year.[7] Universal health insurance could end the tradition of employer-sponsored health insurance in America. Currently, several different plans have been offered to finance universal health insurance. Some include a combination of income-based premiums paid by employers and households, increased progressive income taxation, and larger taxes on capital gains and dividends.[8]

Image: Over the past 20 years, American public opinion has shifted slightly in favor of a ...Image: Over the past 20 years, American public opinion has shifted slightly in favor of a single-payer healthcare system. Source: Kaiser Family Foundation

Why does the debate about Medicare for All matter right now?

The conversation around Medicare for All is obscured by the various terms and confusion surrounding the policy. Among those who support an American system of universal health insurance, there is significant disagreement over the role that the federal government and private insurance companies should play in that system.[9] With the 2020 election looming, this debate is of particular salience. Bernie Sanders’ announcement of candidacy for the Democratic nominee assures that Medicare for All will be back on the debate podium this election cycle.

How would this affect the uninsured?

The majority of U.S. citizens have health insurance. However, premiums and deductibles for health insurance have been increasing faster than inflation and wages.[10] Since 2008, average annual family premiums have increased by 55 percent, which is twice as fast as the rise in workers’ earnings and three times as fast as the rise in inflation.[11] The increasing financial burden of coverage influences the insured when they are making decisions about seeking care. For example, in 2017, 45 percent of uninsured adults cited high costs of health insurance as the primary reason they lacked coverage.[12] In that same year, one in five uninsured adults went without medical care that they needed due to the cost of treatment. Currently, uninsured people are less likely to receive preventative care and health services for major or chronic conditions.[13] With universal, single-payer health insurance, all citizens would receive coverage paid for by the government.

Image: Over the past decade, the increase in annual deductibles has far outpaced the growt...Image: Over the past decade, the increase in annual deductibles has far outpaced the growth in workers' earnings and inflation combined. Source: Kaiser Family Foundation

How would this affect Medicaid and CHIP?

The various universal single-payer health insurance coverage proposals differ in their treatment of other public insurance programs, including Medicaid and CHIP. Implementing this type of national insurance coverage could naturally lead to the elimination or reduction of federal spending obligations for programs like Medicaid and CHIP. Universal health insurance would, by definition, cover all American citizens regardless of health, age, or income. However, there is still debate over whether targeted insurance programs should remain in light of the fact that low-income earners, people with disabilities, and children have different and greater needs from public insurance programs than wealthier individuals. Therefore, targeted programs designed to facilitate the specific coverage needs and provider networks required by these groups could add efficiency to a universal system.[14]

How would this affect me, if I have private insurance?

The economic impact of Medicare for All would differ greatly depending on one’s income bracket and previous source of health insurance, as well as the specifics of the plan passed. While individuals would save money on health expenditures, taxes would increase. The vast majority of those who are insured through their employer would not experience a net benefit, while those who have private insurance might.[15] Yet, this may not be the case for low wage earners who receive employer provided insurance. Some Medicare for All policy versions advocate for employees to get the choice between employer sponsored coverage and Medicare coverage.[16] While Medicare for All would drastically improve the health of those who currently cannot afford expensive treatments and private insurance, it would decrease the quality of healthcare the most wealthy Americans receive: private consultations, phone conversations, or concierge doctor services would not be covered, among other luxury healthcare practices.[17] Wealthy Americans seeking such luxury services may still be able to access them through private companies.

What is the argument for Medicare for All?

The crux of the argument in support of Medicare for All is that healthcare is a public good and should be run as such, as opposed to a business.[18] A 2017 survey found that 25% of Americans said that a family member skipped necessary medical care due to cost.[19] The absence of regular check ups and access to medical care is detrimental to one’s well-being. Due to the ambiguity of specific policies under Medicare for All, in addition to the various models proposed by various politicians, it is difficult to determine the financial impact. Some assert that Medicare for All could be less expensive than the current system.[20] While private insurers in the United States currently spend up to 25% of total expenditures on administrative costs, single-payer systems such as those in Taiwan and Canada spend less than 2% on overheads.[21] Moreover, Medicare for All would provide the opportunity for the American government to use its negotiating prowess to acquire advantageous terms with drug companies and service providers.[22]

What is the argument against Medicare for All?

Against Medicare for All are many who fear the control it would give the government over the health-care system. Adversaries argue that the policy would lead to an overall lower quality system that would not make its universality worthwhile.[23] The tax hikes that would be required to pay for Medicare for All, in any of its various policy forms, make many more oppose the policy. Moreover, some argue that in the status quo, those with private insurance benefit those with Medicare, as the medical profession is made attractive due to the monetary benefits of private services, not Medicare reimbursements.[24] This provides a net benefit for the system, encouraging more people to study medicine and perform effectively as doctors. There would also be repercussions to medical facilities and professionals under Medicare for All. On one hand, pay cuts could occur for doctors and hospitals based on the Medicare program’s current reimbursement rates compared to those of commercial insurers.[25] On the other hand, hospitals could benefit from the absence of unpaid bills from patients who struggle financially and may see their administrative costs decrease due to a lessened need to transact with insurance companies, send patient bills, and debt collection.[26] Overall, hospitals would likely still lose money.[27] Some argue that there would be serious detriments to medical research and development investment due to lower profits in the pharmaceutical and medical device industries.[28] Ultimately, the specific financial harms cannot be empirically discerned due to the vagueness around Medicare for All in current political discourse.

Conclusion

Medicare for All in current political discourse takes on many meanings and lacks a cohesive policy structure. This makes it difficult to analyze. While candidates may favor aligning themselves with broad ideology that supports equitable insurance scheme, it is less productive than fixating on concrete and incremental systematic changes. When politicians begin to advocate for specific healthcare policy that pushes America closer toward Medicare for All in a series of steps, more productive debate and useful public scrutiny will ensue. Rather than continuing the vague conceptual battle surrounding Medicare for All, it is time to delve into the intricacies of American healthcare and attack problems head-on. Political gridlock may force Medicare for All advocates to vouch for more nuanced and less extreme changes.

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>