by Dr. Roy Cordato
Senior Economist, Emeritas
We have heard a great deal lately about something called “Medicare for All” (MFA). The idea is supported by many Democrats in Congress, as well as all of the declared Democratic party candidates for president. But quite clearly, actual Medicare for all is not what they support.
Last week, I heard a commentator refer to MFA as a system with no premiums and no co-pays. And the fact is that this is probably what most people think MFA would mean. But if this is what elected officials and others on the political left are actually proposing (and I think it is), then they are guilty of dishonesty. There are two things that Medicare is clearly not: zero premium and zero co-pay.
The fact is that MFA, if it were truly modeled after Medicare, would mean that everyone would be put into a system that requires them to pay anywhere from $150 to $460 a month in out-of-pocket premiums, depending on their income. And no co-pays? Well, try again. Medicare only pays 80 percent, which means that everyone would have to pay 20 percent of every bill. In fact, there’s a deductible of $183 that everyone must pay before Medicare pays a dollar or, more accurately, 80 cents.
The private insurance market makes Medicare a viable and affordable system for most of the retiree population. If a consumer wants to cover the 20 percent that Medicare doesn’t pay, they turn to the private insurance market. “Medigap” or “gap” plans are offered by dozens of private companies with competing rates and competing levels of coverage, depending on their individual needs. There are HMOs and PPOs that emphasize in-plan and out-of-plan physicians, and these plans charge relatively low rates. A so-called supplement plan requires the consumer to pay a higher monthly premium but allows them to go to any doctor they wish. And within these options, there are a host of choices tailored to meet individual needs.
The left is good at suggesting that Medicare is a single government payer that takes care of all of the health care expenses that senior citizens incur, and to get what they want, we simply would need to open it up to everyone. Medicare is much more akin to a public-private partnership. Health care is made affordable to retirees, primarily because of private competition among health insurance companies. What the Left actually wants is to abolish Medicare as we know it, not extend it to all.
If you want a truer sense of what the Democrats have proposed, do not think of MFA. Instead, their plans are similar to the health benefits provided by the U.S. Department of Veterans Affairs aka the VA.
Democrats are advocating for a system that eliminates competition and puts the government in charge of funding. (Note that under Medicare funding comes from many sources: the government, individual participants, and various private insurance companies.) Indeed presidential hopeful from California, Sen. Kamala Harris, contends that all private health insurance, that is, all of the many “payers” that health care consumers currently choose from, should be eliminated. There would only be one insurance plan to choose from, take it or take it.
While Sen. Harris has recently backtracked on that statement, her comments surrounding it are revealing. As she put it: “the idea is…you don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require.” These words reflect an almost a nirvana view of government and government bureaucracy. Under any kind of government payer system, and this is where what is being proposed would be similar to the current Medicare system, consumers would have to go through one or more government agencies that will impose their own, arguably more onerous, approval process, paperwork, and delays. What experience in other countries has demonstrated is that single payer government run health care, far from guaranteeing a right to health care, ultimately grants the government the right to deny it.