Medicare for All! But Are All for Medicare?

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“Medicare for All” is the oft-used political slogan to rally the masses to rethink our dysfunctional systems of health care coverage payment and delivery. The term gained renewed traction as a campaign buzzword in the Democratic presidential primary. This lofty concept, proposing a “Big Bang Theory” for health care reform, deserves serious attention, as it would completely remake America’s health care financing system in a way that hasn’t happened since World War II. But Medicare for All can be a different concept based upon political leanings and plan details. Specific differences emerge as you peel back the layers of competing proposals.

Breaking Down the Ideas

Roughly speaking, the field of competing health reform policies breaks down into four categories: Medicare for All, Medicare if You Want It, the Public Option and Medicaid for All. Among those categories, the first—Medicare for All—may be the easiest to understand.

Simply put, the dominant Medicare for All proposals would eliminate the current system of profit-driven health insurance. It eliminates most other government-run insurance programs, including Tricare, the Federal Employees Health Benefits program and Medicaid. After a transition period, U.S. residents could enroll in a modified version of the existing Medicare program. Vermont Senator and Democratic presidential candidate Bernie Sanders’ plan, for example, virtually eliminates out-of-pocket costs, premiums and copayments, and it would do away with insurance provider networks. In theory, Americans could choose any doctor, anywhere, at any time.

Medicare for All proposals offer simplicity and predictability with the potential to reduce America’s uninsured rate to zero. Naturally, though, the radical restructuring of health care coverage and delivery in the U.S. is never simple. Implementing such a plan raises big political and process questions and creates enormous challenges under the best of circumstances. The prospect of eliminating millions of private insurance industry jobs and infrastructure would face stiff political resistance.

While unified systems of administration could offer leverage and negotiating power, consolidating power in one entity may give unintended power for a bureaucracy to generate mind-numbing red tape. Sorry, folks, cost-containment strategies to control costs will continue in any system we create. Therefore, at a minimum, any time patients and family members must confront monolithic bureaucracy, public or private, they need help and the assurance of a system that includes strong consumer protection accountability and effective enforcement of patient rights.

For some, Medicare for All proposals resurrect the fear factor of swollen “government bureaucracy.” The public is generally apprehensive about placing health care coverage and insurance decisions in the hands of government. Our current insurance system is already highly bureaucratic and complex. Currently, roughly a third of the population is already insured under Medicare or Medicaid, where government agencies determine benefit packages and criteria for covered services, but will the 60% or so covered under private insurance be willing to take the same leap of faith?

How Much Will Medicare for All Cost?

A third concern, common to all health reform proposals, centers around cost control measures. The Medicare for All proposals use purchasing power and streamlined administration to help leverage lower costs and reduce administrative expenses. Think Amazon-style purchasing power, only bigger. Medicare for All could establish payment rates for most medical services—either based on the current Medicare rate-setting scheme or through a global, annual, budget negotiation process.

Opponents of “government rate-setting” paint such proposals as an existential threat to capitalism guaranteed to result in hospital closures that will strand millions of people without access to medical services. Although health care costs in America have proven to be driven by anything but the invisible hand of supply and demand, it remains to be seen whether American voters will stomach reforms that so visibly constrain the mythical free market economy.

The political hot button is cost. How much will Medicare for All cost? The simple answer is a lot, at least in the short term, but in the end, we may all pay less.

In general, the Medicare for All proposals anticipate offsetting costs through the elimination of funding for other government insurance programs. All of them, though, will require additional funding from other sources, which raises the specter of tax increases. As a practical matter, the elimination of employer-sponsored health insurance could free up additional tax revenue. Instead of employers and employees paying more for private insurance, they would redirect those funds (some persuasively argue fewer funds) to pay for the program. Although the tax level is shockingly high, the net cost could be lower, and the money that American businesses currently spend on tax-free employee insurance could convert to taxable salary increases, which are needed to attract quality employees in the absence of health plan incentives.

Regardless, as much as Americans may like the idea of universal access to affordable health care, they hate the idea of paying more taxes with at least as much passion. People hear “tax increase” and stop listening, probably to their detriment. That sentiment offers an easy tagline for opponents and may be the greatest vulnerability of any campaign to pass Medicare for All.

What About the Alternatives to Medicare for All?

All of these concerns underscore the alternatives to Medicare for All, along with additional questions about the role of the private insurance market and personal responsibility for health care costs. The “Medicare if You Want It” or “Medicare Buy-In” plans envision expanding eligibility for the existing Medicare program as an alternative to private insurance. Eligible individuals could choose to enroll in insurance plans offered through their jobs but would not be prohibited from enrolling in Medicare if they chose to opt out of their employer’s insurance plan.

In general, most buy-in schemes imagine an ongoing role for commercial insurance plans in the health system. They would roll back regulations that undermine the Affordable Care Act’s health insurance marketplaces, where consumers can get income-based premium assistance for purchasing individual health plans through commercial insurance companies. Buy-in plans generally offer some competition to the commercial insurance market through premium assistance features for buying into traditional Medicare, but they would also extend premium assistance to Medicare Advantage plans run by commercial insurance companies. Out-of-pocket costs would essentially be the same as they currently stand under existing marketplace, Medicare and Medicare Advantage plans.

Most Medicare buy-in proposals limit eligibility based on age. In general, only people over age 50 could secure the buy-in opportunity, so the overall system impact on lowering the uninsured rate is reduced when compared to a Medicare for All system and probably less than the competing “Public Option” proposals.

At first glance, Public Option proposals look a lot like the Medicare If You Want It proposals. In fact, two of the leading contenders create a health insurance program named after the Medicare program: “Medicare-X” or “Medicare-E.” The key difference, though, is that Public Option proposals create an entirely new insurance option that directly compete with existing commercial insurance plans. They propose government-run individual health plans alongside marketplace and non-marketplace commercial plans, as well as group health plans in the small and large employer markets. Premium assistance is available for the proposed individual plans, and small employers could secure tax credits to subsidize employee health plans.

With some variations, Public Option proposals generally tie payment rates to the current Medicare rate-setting scheme. With restrictive cost controls, a potentially very large risk pool and Medicare’s relatively low administrative costs, a Public Option plan might provide powerful competition with enough clout to drive a paradigm shift across the entire health insurance industry.

Rounding out the field are the “Medicaid for All” proposals. Despite perhaps getting the least amount of publicity, these proposals revive a concept and discussions that could provide individual states a great deal of flexibility to implement. Medicaid Buy-In plans would authorize a state to charge premiums to enroll certain, normally ineligible populations into its Medicaid plan. The majority of state Medicaid programs already partner with commercial insurance companies to provide managed care services, so a Medicaid for All proposal could simply expand on commercial insurers’ existing roles.

Think of Wisconsin’s BadgerCare Plus program, a current public-private partnership to deliver health insurance services. Currently, Wisconsin contracts with private managed care plans to provide BadgerCare Plus coverage to enrollees across the state. A Medicaid Buy-In plan could look like BadgerCare Plus if it were expanded for additional populations.

What’s the Bottom Line?

Each health reform idea comes with its pros, cons and big questions. At the end of the day, Americans must decide just how much government they want in their nation’s health care system. Despite the hue and cry of “socialism!” from the right, years ago, a more civil society determined the role and involvement of government for public schools, roads, libraries, police and fire services and much more, yet much of health care is still caught between two worlds and two ideologies.

Decisions tend to turn more on emotion than on the specifics of any given plan, but one critical fact remains: Health insurance is confusing, and the devil is indeed in the details. That’s as true for Medicare and Medicaid as it is for any commercial insurance policy. Any effective plan or proposal must include strong consumer assistance, accountability and enforcement of the rules.

Some proposals on the table include funding for outreach and enrollment assistance, like the Affordable Care Act’s Navigator programs. That’s a small step in the right direction, but policy makers must recognize that consumer assistance needs to extend beyond just enrollment assistance. Claim denials, billing errors and bureaucratic red tape are, sadly, baked into almost all health care systems, whether they’re government-run or fully privatized. Insurance doesn’t do anybody any good if they don’t know how to use it, how to keep it or how to challenge mistakes.

Populations impacted by health disparities face the greatest threats to access. To really get the most bang for our buck, we must commit serious resources to helping people—many of whom are ill themselves or are helping an ill or elderly family member secure needed services—navigate the system. Whatever that may be.

For more information, visit healthwatchwisconsin.org.