The Question That Single-Payer Medicare for All Advocates Need to Answer
You are probably thinking that question is, How are you going to pay for it?
But, I will suggest there is another critically important issue that is part of the overall question about how it will be paid for––What will your plan do to our existing health care system?
Medicare and Medicaid cost less than commercial insurance because Medicare and Medicaid pay providers––doctors, hospitals, and other health care providers–– a lot less for their services.
Advocates argue their single-payer Medicare for all health care system will overall cost us all a lot less. They are right that their systems can be a lot less expensive by expanding Medicare to everyone––primarily because government payment rates are so much smaller.
But here's the hitch––paying Medicare rates on behalf of all patients would literally bankrupt the system we have.
The American health care system has evolved to painting itself into an extraordinary corner. Over the years politicians have been able to cut Medicare and Medicaid provider reimbursement rates, even below the providers cost to offer those services, because health care providers can make it up by charging commercial insurance more.
If a single-payer Medicare for all scheme were to suddenly make the Medicare and Medicaid reimbursement rates the only rate providers were paid, the whole system would simply go "tilt."
Understanding just how any presidential candidate's Medicare for all health care plan intends to deal with this conundrum is critically important.
If Medicare rates became the universal payment rates for hospitals their now commercial reimbursement rates would be cut almost in half. This chart compares Medicare and Medicaid hospital reimbursement rates to private/commercial reimbursement rates:
According to the Census Bureau, in 2016:
- There were 53 million people over age-65 on Medicare.
- 68 million were covered by Medicaid.
- 155 million people had employer-based coverage.
- 22 million were covered in the individual health insurance market on and off the Obamacare exchanges.
So, in 2016, 121 million people got their care under Medicaid and Medicare and their providers were reimbursed at those rates.
Another 177 million people were in the commercial insurance market and had their care reimbursed at the much higher commercial rates.
What would happen to your local hospital if suddenly the nation went to a single-payer Medicare for all system and 177 million out of a total of 298 million people had their hospital payments cut almost in half? Or what would happen to your doctor's practice if suddenly your doctor had their reimbursement for about 60% of their patients cut by an average of 22%?
The term "Medicare for all" is an enticing concept––give everyone universal health care with little in the way of deductibles and co-pays, lower premiums, and even new benefits like nursing home care.
Is this even financially possible?
It is. So long as you cut hospital and doctor reimbursement to Medicare levels.
Is this what Bernie Sanders and Elizabeth Warren intend to do in order to balance the books in their Medicare for all scheme?
Warren has not offered any kind of plan––just vague promises about universal coverage in a system that will overall cost us less.
Sanders has been more specific listing a set of tax choices to pick from while avoiding the question of just exactly what he intends to do about provider reimbursement.
Much of what we've asked the 2020 Democratic presidential candidates about their health care plan is over whether they intend to raise people's taxes to pay for it.
But really, the bigger question is just how much of the cost will be paid for by taxpayers/consumers and how much will be paid for by health care providers?
And, just how much do they intend to cut provider reimbursement and what will that do to our existing health care system?
We don't know the answers to these questions because the leading Medicare for all advocates, Sanders and Warren, have not told us how they intend to pay for all of these promises.
Voters should not take them seriously on the issue of health care until they give us the details for how they will balance the books.
And, not just what those plans will do to taxpayers, but also by telling us what their plans will do to the existing health care system we rely upon.