What ‘Medicare for All’ means, politically and practically

Many of those pushing for Medicare for All believe that health care is a human right, and many supporters believe that getting more people into the Medicare system can help rein in growing costs in the US health care system.

Where did this idea start, and why is it gaining traction?

The concept of a government-funded health care system isn’t new. Efforts to provide some sort of universal health coverage in the United States date all the way to 1904, when the Socialist Party endorsed the idea.

In September 2017, Sanders and 16 Democratic co-sponsors introduced a Medicare for All expansion bill to cover all Americans. The co-sponsors included California Sen. Kamala Harris and New Jersey Sen. Cory Booker, who are running for president in the 2020 election. When announcing her run, Harris said, “I’m announcing once and for all that health care is a fundamental right. And we will deliver that right with Medicare for All!”

Theirs wasn’t the only bill to try to expand Medicare. In the last congressional session, there were at least eight other proposals introduced in the House and the Senate aiming to expand the program. Some would have expanded the program by lowering the Medicare age eligibility to 55; other bills added a Medicare option while maintaining private insurance choices.

Last summer, Democratic Rep. Pramila Jayapal of Washington helped found the Medicare for All Caucus, which now has 78 Democratic representatives as members.

And throughout the recent midterms, “Medicare for All” was a rallying cry for Democrats. It was heard from the likes of now-freshman New York Rep. Alexandria Ocasio-Cortez and Rep. Harley Rouda of California, who beat 15-term Republican incumbent Dana Rohrabacher.

What would the program do?

Our health care system could best be described as a hybrid. About half the money comes from the private sector: people who have private insurance through their employers or who are self-insured. The other half is from the public sector: federal, state and local governments paying into Medicare and Medicaid.

If the country adopted Sanders’ proposal, people who currently get their insurance from their employers would move to the government system. Sanders’ plan would cover basic health services, as Medicare does now, and include dental and vision coverage with no copays. The only potential for out-of-pocket fees would be for some prescription drugs and certain elective procedures.

If states wanted to fund additional benefits for their residents, under the Sanders proposal, they could, but they would have to do so without federal assistance.

Under Sanders’ plan, would I be able to keep my doctor?

As long as your doctor was state-licensed and a certified Medicare provider, your visit would be covered. But if your doctor chose not to participate in Medicare, you would have to either pay out of pocket or see a participating doctor.

What wouldn’t the program cover?

Under the comprehensive Sanders program, the only things you would probably have to pay for would be certain elective and cosmetic procedures. But the devil is in the details, and many of those details still need to be hammered out.

For example, Medicare has contracted with and approved certain private insurers to provide additional coverage. Would a Medicare for All system be a tiered system with supplemental insurance, similar to what we have now, or would the private insurance industry go away completely? It depends on which proposal were to be approved.

In the first year, Medicare would grow, with the eligibility age dropping to 55 and with all children 18 and younger added to the rolls. Over the next two years, the age would drop to 45 and then 35. By the fourth year, it would truly become “Medicare for all.”

How would this be paid for?

This is where the rubber hits the road and one of the reasons it’s such a contentious issue.

The graph below illustrates the federal Centers for Medicare & Medicaid Services’ projections for health care spending from 2017 to 2026.

There are several numbers to consider when we think about health care costs.

1. National health care spending: That’s the yellow line in the graph. It represents how much we as a country spend on things like drugs, doctors visits and hospital care; including all sources of funding, both public and private. In 2017, the cost of health care was $3.5 trillion. Over the decade from 2017 to 2026), the cost is expected to be $45 trillion.

2. Federal health care spending: This purple line represents the federal government’s share of national health care spending, which includes Medicare and Medicaid. Much of this comes from taxes. In 2017, federal health care spending was $974 billion. Over 2017 to 2026, federal health care spending is projected to be $13 trillion.

3. Total government spending: That’s the green line, federal health care spending plus what states and local municipalities pay. It represents about half of total national health care spending; the other half comes from the private sector. In 2017, total government spending was $1.56 trillion. Over the decade from 2017 to 2026, total government spending is projected to be $21 trillion.

Sanders’ Medicare for All plan analysis:

Sanders’ analysis was based on 2016 Centers for Medicare & Medicaid Services health expenditure projections. CNN used Sanders’ assumptions and applied the same savings ratios to the most current projections in this analysis of Sanders’ data.

Keep in mind that Centers for Medicare & Medicaid Services projected that national health care spending under our current system is about $45 trillion from 2017 to 2026. If Sanders’ assumptions are correct, Medicare for All would lower national health care spending by about $6 trillion over the decade.

Sanders believes that those savings would largely result from reduced administrative costs, reduced payments to physicians and lower prescription drug prices resulting from a single-payer system.

2. Government spending: Sanders doesn’t make a distinction between federal and state spending in his analysis. All of his spending is considered federal or public, since under the Medicare for All plan, the federal government is largely the single payer.

Sanders’ analysis assumes that if Medicare for All had been implemented in 2017, in that year, federal spending would have been approximately $2 trillion, and total public or federal spending would have been about $27 trillion for the decade 2017-26. But again, Sanders estimates that total national health care spending under Medicare for All would have hit $3.2 trillion for 2017 and about $39 trillion over the decade, meaning Sanders still would need an additional $12 trillion to $14 trillion to cover national health care spending for the decade.

To pay for his plan, Sanders called for a new 2.2% income tax on all Americans and a 6.2% levy on employers. He would also increase taxes on the wealthy. But, he argues, people would save money because they would no longer have to pay copays, monthly premiums or deductibles. A family of four earning $50,000 would save more than $5,800 each year, he said. Sanders says that while everyone will pay more in taxes, they will make up for that by paying less in premiums in out-of-pocket expenses for health care.

Some experts believe that Sanders’ picture is too rosy, overestimating how much savings would result from the single-payer system.

Other experts, including Kenneth Thorpe, chair of health policy and management at Emory University’s Rollins School of Public Health, also take issue with Sanders’ estimates. No matter how the cost is cut, everyone will be affected, Thorpe said, and Sanders’ proposed tax hikes couldn’t cover the $32 trillion increase.

Thorpe believes that sales taxes would have to increase, on top of the other tax hikes Sanders has called for, to get to the needed $32 trillion. And that would affect everyone. Sales tax is a regressive tax, meaning it will affect the poor more than the rich.

“There will be winners and losers,” he explained. And who may end up paying more might surprise you.

According to Thorpe, someone already on Medicare or Medicaid who is paying very little, if anything, in premiums would probably start paying more taxes and potentially see no relief, or offset, on premiums. The reason is that what they are paying in taxes is potentially greater than their current premiums.

Small-business owners could be in a similar boat. If they have fewer than 50 employees, they are currently not paying premiums for their employees. But they would pay more in payroll taxes and not see any relief, or offset on premiums.

Are there other places that do this?

Canada and Taiwan are often cited as examples of other places that have single-payer health care systems under which all residents are insured. Those governments pay for health care through taxes on their citizens. In Canada, the federal government provides only health care, and dental, vision and prescription drugs may be covered by the province or through private insurers.

Britain’s National Health Service is also often used as an example of a single-payer system. But in the English system, the government not only pays for services, it contracts with and employs doctors and hospitals directly. This is considered socialized or nationalized health care.

In Canada and Taiwan, and under Medicare in the United States, the government doesn’t own or contract the providers. The British system is more akin to the US Veterans Administration.

Another country that frequently comes up as a model in the health care debate is France, which has a mix of public and private insurance. Although most of France is covered by one of the three not-for-profit health insurance funds financed by the government and covers between 70% and 80% of costs, there are private supplemental insurers, as well.

All of these countries provide almost universal health care, through which insurance is either provided or mandated by the federal government.

Why is health care so expensive in the first place?

In the United States, for every one doctor, there are about 16 staff members — but only six of those staff members actually have clinical roles, like nurses’ aides or medical assistants.

We also spend way more on technology and drugs. Pharmaceutical drugs are particularly costly in the United States, partly because the largest user of prescription drugs — Medicare — can’t negotiate prices down with drug manufacturers. Under Sanders’ plan, the government would come to the table to broker pricing.

What do most people think about Medicare for All?

Public support also depends how you qualify the program. Remind people that it will eliminate health insurance premiums and reduce out-of-pocket health care costs for more Americans, and support for the program spikes to 67%. If you tell people that Medicare for All guarantees health care as a right for all Americans, approval for the program jumps to 71%.

But remind them that it could eliminate private insurance, and support flips. According to the poll, 58% of Americans would oppose Medicare for All if it got rid of private insurance. Sixty percent of respondents said they opposed the single-payer system when they were told that it would raise taxes for most Americans.

In the meantime, what can I do to lower my own health care costs?

Take control of your health. Eat better. Exercise.