Medicare for All: What it is, what it isn't

Ever since Vermont Sen. Bernie Sanders fired up the Democratic base two years ago with his plan to deliver Medicare for All, the idea has become a kind of yardstick for measuring a candidate’s support for a single-payer health care system. But Medicare for All presents challenges both practical and political.

The proposal would shake up nearly a fifth of the nation’s economy. While the approaches in other countries range from government-run health care to a mix of public and private insurance with strict government oversight, Medicare for All is uncharted territory in America. How the taxes to support huge governments costs would balance against the savings on premiums and care for individuals and employers is unknown.

When fully implemented, Sanders’ version of Medicare for All would replace private insurance, along with Medicaid and Medicare. The Affordable Care Act — former President Barack Obama’s signature health care accomplishment — would go away.

When asked about such sweeping change, most Democratic hopefuls try to bend the conversation toward the broader goal of universal coverage at an affordable price.

In the process, the meaning of Medicare for All can get lost.

To help explain the policy and keep the vocabulary straight, here are a few key questions and answers.

Sanders’ idea of Medicare for All would be a single, national health insurance program that would cover everyone who lives in the United States. In the bill he introduced in 2017, it would pay for every medically necessary service, from routine doctor visits to surgery to mental health to prescription drugs. Dental and vision care are part of the package, too. The details on long-term care might vary between the Senate and House versions, but broadly speaking, nursing home and related care grow under both proposals.

The government would set payment rates for services, drugs and medical equipment. Each year, the secretary of Health and Human Services would determine a national budget for all covered services and spending would be limited by that cap. For individuals, there would be no costs — no deductibles, no copays or coinsurance. The two exceptions would be for some prescription drugs — though that would be limited to $200 a year — and possibly for long-term care.

It would replace all other insurance, with limited exceptions, such as cosmetic surgery. Employer-provided insurance, Medicaid and ultimately Medicare would all disappear.

No. Medicare for All is much more generous than the current Medicare program. Right now, the Medicare program is for Americans 65 and over; they receive care, but they’re also responsible for part of the costs. Unlike traditional Medicare, Sanders’ Medicare for All would cover medical bills completely, with no burden on the patient. There would be no Medigap insurance or Medicare Advantage.

If Medicare for All sounds a lot like a single-payer health care system — where the government foots the bill for people’s health care — that’s because the two are largely the same. The new name seems intended to make the concept more popular. When the Kaiser Family Foundation asked people in 2017 how they felt about the term single-payer health, 48 percent gave it a thumbs up. When Kaiser asked them how they felt about Medicare for All, support rose to 62 percent.

This is the great unknown.

A study of Medicare for All from the libertarian-oriented Mercatus Center at George Mason University put the cost at more than $32 trillion over 10 years. Health finance expert Kenneth Thorpe at Emory University looked at Sanders' earlier version during the 2016 campaign and figured it would cost about $25 trillion over a 10-year span.

Where would the money come from?

Sanders offered some possibilities. He would redirect current government spending of about $2 trillion per year into the program. To that, he would raise taxes on income over $250,000, reaching a 52 percent marginal rate on income over $10 million. He suggested a wealth tax on the top 0.1 percent of households.

A key dispute is whether the government would be able to use its bargaining power to drive down costs as quickly and as steeply as Sanders predicts. Skeptics, including Thorpe, say Sanders is overly optimistic.

Analysts, such as Drew Altman who heads the Kaiser Family Foundation, also worry that insulating people from any costs of care will drive usage through the roof. Altman noted that "no other developed nation has zero out of pocket costs."

There is no question that the costs would be massive. On the other hand, according to government projections, if things stay as they are, by 2026, the combined health care spending by the private and public sectors is expected to reach $45 trillion regardless.

Sanders’ 2017 bill included a four-year phase-in during which increasingly younger people could buy into Medicare. So 55-year-olds could choose that option in the first year, 45-year-olds in the second, and 35-year-olds in the third. There would be out-of-pocket cost reductions across the entire Medicare program.

Outside of Medicare, Washington would offer a public option insurance plan for people of any age through the Obamacare marketplaces.

To help people who work in the insurance industry, the government would set aside up to 1 percent of the total health spending budget for job dislocation assistance.

Lawmakers have floated several versions of extending Medicare to people younger than 65, offering it as a more practical expansion of the current system.

Sens. Debbie Stabenow, D-Mich.; Sherrod Brown, D-Ohio,; and Tammy Baldwin, D-Wisc., introduced the Medicare at 50 Act in mid February. Under it, people between 50 and 64 could pay to get Medicare coverage. The main difference from current Medicare, where hospital care is automatic and other parts are optional, is that coverage would be a package deal of Parts A (hospital), B (physician) and D (prescription drug) coverage. Or someone could choose Medicare Advantage, which is Medicare offered through private insurers.

If someone qualified for a premium subsidy under the Affordable Care Act, they could could apply that to extended Medicare. So basically, the government would offer a new insurance option for people 50 and up.

A second approach, called Medicare-X Choice, introduced last session by Sen. Michael Bennet, D-Colo., and Rep. Brian Higgins, D-N.Y., would offer Medicare to people of any age through the Affordable Care Act marketplaces. Initially, this would not be nationwide. The bill would focus on adding the Medicare option in places that had only one insurer offering coverage, or in areas with few hospitals and doctors.

A variant of this approach would simply offer a public insurance option through the marketplaces across the country.

Lastly, another idea would be to let people buy into Medicaid, rather than Medicare. Under a bill from Sen. Brian Schatz, D-Hawaii, and Rep. Ray Lujan, D-N.M., a plan would be available on the marketplaces, but because it is Medicaid, not Medicare, the details of covered services could vary from state to state. Still, no plan could offer less than the essential health benefits under the Affordable Care Act. Some states have explored this option on their own.

We’ll know more when Medicare for All bills are introduced in the Senate and House. In the last Congress, 17 Democratic senators backed Sanders’ Medicare for All bill. In the House, 125 members signed on. All were Democrats, and there was zero Republican support. Those numbers fall short of majorities, and also fall short of a majority of Democrats.  

House Speaker Nancy Pelosi has said Medicare for All will get hearings, as will other reform proposals. There clearly are competing proposals among House Democrats. While some press for Medicare for All, others are more focused on fortifying the Affordable Care Act.

The coalition Protect Our Care is lobbying for a congressional health care agenda that works to cap out-of-pocket costs in Medicare and fights a Texas court ruling that threatens to completely overturn the Affordable Care Act. The coalition would also like to curtail the Trump administration’s moves to expand short-term insurance plans.

Recently, a top Pelosi aide gave a group of Blue Cross/Blue Shield executives a briefing that listed a number of challenges with Medicare for All, including the cost and that money is "needed for other priorities." Most of the briefing focused on strengthening Obamacare, Medicaid and Medicare.

Democrats are navigating between the appeal of Medicare for All among a portion of the Democratic base, and the broad support among the party’s leaders for strengthening Obamacare and expanding coverage. The candidates share the goal of universal coverage but are wary of a full replacement of the current mix of private and public insurance.

Many Democrats running today signed on to Medicare for All bills in the past two years, but as of this moment, all have been more cautious. California Sen. Kamala Harris came the closest when she said during a CNN event that "we just need to have Medicare for All. That’s just the bottom line." She appeared to support the elimination of private insurance, but her aides later said she was open to keeping it in the picture.

Harris, along with Sens. Kirsten Gillibrand, D-N.Y.; Amy Klobuchar, D- Minn., and Sheldon Whitehouse, D- R.I., co-sponsored the latest bill to offer Medicare to people as young as 50. The same group, plus Sens. Cory Booker, D-N.J., and Elizabeth Warren, D-Mass., signed on to Medicaid buy-in.

Warren said there are lots of ways to get to Medicare for All, and former Housing and Urban Development secretary Julian Castro and South Bend, Ind., Mayor Pete Buttigieg described it as a long-term goal. Former Maryland congressman John Delaney said that Medicare for All is "not the right answer."

Keep an eye on which candidates co-sponsor the single-payer versions of Medicare for All when they are introduced.

Beyond that, there will be hearings in the House, where more details and possibly some cost estimates will emerge.

But Medicare for All legislation faces the steepest of uphill battles in the Senate.

Even if it enjoyed majority support, and that’s unlikely with Republicans in charge, the bill has nowhere near the 60 votes needed to get past a filibuster.

Medicare for All is associated with Sanders more than any other politician. With him now in the race for the White House, his proposal will be a prominent part of the Democratic primary debate.