Image above from Getty Images
Senator Bernie Sanders during the 2016 Presidential Election called for a single payer system to cure our healthcare woes. Now Democratic contenders for the 2020 election are calling for the same. Some voters are salivating at the thought, tired of high insurance premiums and deductibles. Others are cringing at the idea of the government running our healthcare system. Yet most are confused and want more details. So let’s break it down.
What is Medicare?
Medicare is the health insurance offered by the federal government for those over 65 and with disabilities. According to medicare.gov they breakdown medicare as the following:
Medicare is the federal health insurance program for:
People who are 65 or older
Certain younger people with disabilities
People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)
The different parts of Medicare help cover specific services:
Medicare Part A (Hospital Insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
Medicare Part D (prescription drug coverage)
Part D adds prescription drug coverage to:
- Original Medicare
- Some Medicare Cost Plans
- Some Medicare Private-Fee-for-Service Plans
- Medicare Medical Savings Account Plans
These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans
Medicare Advantage (also known as Part C) is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D.
What is Medicare For All?
Originally suggested by Senator Bernie Sanders, Medicare for All would essentially allow all Americans to qualify for Medicare. According to Unitedmedicareadvisors.com:
Medicare for All promises to cover numerous healthcare products and services, including the following:
Inpatient and outpatient health care services
Preventative, emergency, and nonemergency health care services and treatments
Primary and specialty health care, including palliative and long-term care
Care for vision, hearing, and oral health problems
Mental health and addiction services
Medical equipment and supplies
The concept sounds nice but Medicare doesn’t currently cover many of the above such as hearing aids, dental exams, and long-term care.
How would Medicare For All be subsidized?
Unitedmedicareadvisors.com reports the following:
Medicare for All, estimated to cost around $1.38 trillion a year, would operate with funding from the following sources:
$630 billion from a 6.2 percent income-based premium paid by employers
$210 billion from a 2.2 percent income-based premium paid by households making more than $28,800
$110 billion from progressive income tax rates for Americans with yearly earnings over $250,000
$92 billion from taxing capital gains and dividends in line with employment income
$15 billion from limiting tax deduction for Americans with yearly earnings over $250,000
$21 billion from a new Responsible Estate Tax applied to the homes of Americans inheriting more than $3.5 million
$310 billion from savings as health-related tax expenses become obsolete
Unfortuantley tax hikes on employers could lead to price hikes and less employment.
So the concerns I have are Medicare doesn’t currently cover what Medicare for All is touting and the expense may be underprojected.
The image above from Kaiser Family Foundation predicts beneficiaries will outnumber workers.
Moreover many healthcare providers do NOT take Medicare so access can be an issue.
However, until premiums and dedutibles go down, and more Americans become insured, plans such as this will gain attention and popularity.
Daliah Wachs, MD, FAAFP is a nationally syndicated radio personality on GCN Network, KDWN, and iHeart Radio.