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Why "Medicare for All" Can Work


We all know the story. Bernie Sanders has proposed a single-payer health insurance program, with the single payer being the Federal government. He has called his plan Medicare for All. The idea is that the successful federally run medical insurance program for seniors can work just as effectively for people of all ages… and much more so than systems involving private insurance.

The refrain from Republicans is that Sanders’ plan is “socialized medicine,” a system that they claim has never been successful in other countries that have tried it. Sanders’ plan may or may not be “socialized medicine.” He has not proposed that the government provide the actual medical services as is done in the U.K. Cuba, Portugal, Greece, Italy and parts of the healthcare system in many other European countries. The model of universal health care used by most countries is one in which the government pays for services and controls fees, but services are provided by private physicians, while hospitals are government run. In the majority of European countries, particularly Scandinavia and the UK, government administration is local rather than national, although all services are part of the national health care system. Virtually all developed countries, except the U.S., provide care for all of their citizens. Sanders plan, so far as he has outlined it, would have the healthcare system administered at a national, rather than at a local level. Services would be provided by a private healthcare service system, while citizens would pay for the services through their federal taxes and the federally administered system would purchase and control payments and determine which services were covered, as in Medicare. Presumably, patients would be able to choose their providers within the system. Presumably also, everyone would contribute through taxes whether they chose to use the federal healthcare system or a private one, which would probably exist for supplemental coverage of services not covered within the federal system, as occurs in many countries. Use of a private system for some services would be an out-of-pocket expense or could be covered by private supplemental insurance (as now occurs with Medicare).

Another complaint about Sanders’ plan is that it would be too costly. Certainly it would require an increase in taxes by virtually everyone except perhaps the poor (who currently receive their healthcare for free via Medicaid). But his system would eliminate insurance premiums. As current Medicare recipients are aware, even supplemental insurance is cheap when it merely supplements extensive Medicare coverage. The American health care system is the most costly, per capita of any in the world. Simply transferring this cost to the federal government and paying for it with taxes would place a costly tax burden on most people. However, one of the reasons that health care is so costly in the United States is that private health care is less efficient at controlling costs than public health care. Those countries that provide services directly from the government, such as Italy, Greece, UK and Cuba have the lowest per capita costs. Those that provide primarily government payment and administration but private service providers, except hospitals, are typically one third to half as costly as our U.S. system (with the notable exception of Norway). Studies by the Kaiser Foundation have shown that healthcare costs in the U.S. that have been covered by the private sector have risen at twice the rate of Medicare costs and five times the rate of Medicaid costs between 1997 and 2013.

According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2% of operating expenditures, even when these costs include the collection of Medicare taxes, fraud and abuse controls, and building costs. Defenders of the insurance industry estimate administrative costs as 17% of revenue even when these costs exclude marketing costs and profits from their calculation of administrative costs. Additionally, Medicare has a monopoly on services and medicines for the U.S. over-65 population, which gives them enormous bargaining power with regard to both fees for service and drug costs—the same mechanism that drives down prescription drug prices in Canada. Even Medicare Advantage, the program that provides private health care through the Medicare program, using a number of different private providers and insurers, costs 12% higher than straight fee-for-service Medicare. Finally, because Medicare is publicly accountable, it allows us to study what works so that we can improve the health care system.

All of the above considerations prove that Medicare for All would be less costly than our current private health care funding system. With lowering of costs conservatively estimated to be 40% overall, the average tax paid by people to pay for the system would be less than the current average cost they pay for health insurance and co-payments, which of course would be eliminated under such a system. But Hillary Clinton is fearful of introducing a plan such as Sanders’ to a congress that was reluctant to pass Obamacare and has tried to repeal it countless times. She points to the reduction of uninsured in our country to less than 13%  because of Obamacare (but with increased insurance costs and higher deductibles for many)  and doesn’t want to upset the apple cart of this success by introducing new legislation that she says will “wipe out” Obamacare and take us back to the initial battle to try to pass a healthcare bill that serves everyone. This is a fallacious argument. The Republicans have failed to repeal Obamacare even when they controlled both houses of congress. Obamacare is going to remain in place unless we elect a Republican president. Proposing a Medicare for All, single-payer system would not nullify any of Obamacare unless, in fact such a proposal passed, in which case it would replace Obamacare, as it should. I am pessimistic about the likelihood of passing Sanders’ proposed bill in the near future, but that does not mean that such a healthcare system should not be the goal of whomever is in the Oval Office.  Obtaining congressional support for such a proposal is the joint responsibility of the new president and the American public, who, if taught the truth about healthcare, can apply pressure on their representatives and senators to move our country in the direction of a single-payer, government administered healthcare system, just like that found in the rest of the developed world.

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