The Democratic debates this summer demonstrated massive confusion around Medicare for all. Does it mean Medicare for all who want it? Medicare Advantage? A “public option” on an Affordable Care Act (ACA) exchange?
Democrats need to get their story straight.
The confusion is understandable. Medicare for all has been an aspiration since at least the New Deal, but since 1965, when Congress passed the current Medicare statute, no one has thought seriously about the best way to structure and finance it. Ironically, back then its sponsors saw Medicare as a first step to national health insurance like the Europeans have.
It was not to be.
Since 1965, medicine has transformed; it is more effective — and much, much more expensive. Also, America has changed: After the Depression, the New Deal, and World War II, most Americans relied on the government to keep large private corporations in line. Starting in 1968, however, the tables were turned: Americans’ faith in government declined (“Government is not the solution to our problem, government is the problem” — Ronald Reagan) and confidence in private enterprise increased, even as corporations shed social responsibilities. (According to a 1970 article by Nobel Prize-winning economist Milton Friedman, a corporation’s sole responsibility is to maximize shareholder value.)
I am a primary care physician, an attorney (I investigate Medicare and Medicaid fraud), and now a Medicare beneficiary myself. I have studied our system for 50 years from these perspectives. I know that, properly implemented, Medicare will allow everyone to get the care they need at a price they can afford, while maintaining quality with reduced hassle. Without a huge tax increase.
At the previous debates, Democrats engaged in an unnecessary and unfortunate debate about the “transition” to Medicare for all. Some candidates insisted Americans would be required to give up their employer-sponsored health insurance. However, many worry about losing their current insurance, along with their employer’s contribution.
In fact, there is no good reason to force people who like their employer-sponsored insurance to give it up. (Actually, employer-sponsored plans have declined every year since 2000, as medical costs — along with premiums, deductibles, and copays — continue to rise.) Medicare and employer plans have co-existed comfortably — even overlapped — since 1965. Employers will be taxed for Medicare for all as they are for the current program, just at a higher rate.
Nor will commercial health insurance ever be “abolished” or “illegal” here. It’s a free country: There will always be people who prefer, and can afford, private coverage, and insurers ready to offer it — no subsidies, though.
The U.S. has two problems with health care: First, more than 70 million Americans are still uninsured or under-insured; and second, health insurance and health care cost way too much. The ACA improved coverage, but now, 9 years after its passage, it has done little to reduce overall health care costs, which at best have plateaued at nearly 18% of GDP in 2019, despite all the “reforms” mandated by the ACA. (Some of the ACA’s cost-cutting reforms, such as a “Cadillac tax” on high-end health plans and a medical device tax, have been delayed by Congress.)
Costs continue to rise not because individuals providing health care, from physicians to home health aides, are making more (they are actually making less), but because money is siphoned off to administrators, business managers, and executives intent on making money for themselves and investors. “Market competition,” which was supposed to reduce costs, has simply transferred returns from those who care for sick patients to those who chase profitable “customers.”
Medicare for all can rely on three pillars to reliably reduce costs while maintaining quality. First, there will be one comprehensive benefit plan, covering all medically necessary services, including drugs, glasses, and hearing aids, just as Sen. Bernie Sanders (I-Vt.), a candidate for the Democratic nomination, has said.
Second, in sectors where price competition fails, the federal government will set prices — as it now does for physicians and hospitals who provide Medicare services — either by using the Administrative Procedure Act or by negotiating with providers. This is how most countries in the Organization for Economic Cooperation and Development (OECD) control health care costs. For physicians, at least, current relative fees will need to be adjusted in order to pay less for problematic, overused procedures, and pay more for cognitive services such as endocrinology and oncology, in addition to primary care — especially for very sick patients.
Finally, all health care institutions — hospitals, nursing homes, health care agencies, accountable care organizations, and, importantly, Medicare Advantage — must be truly non-profit. (Tax provisions which qualify institutions as non-profit should be reformed.)
Even if there is a new tax on individuals to help pay for Medicare for all, it will be adjusted by income so it’s affordable to everyone. Besides reducing paperwork, there will be no costs for underwriting, marketing, risk adjustment between companies, no rationing of care to goose profits.
There are still many details to work out; existing Medicare has been increasingly damaged by market “reform” since 2000. But in the end, medicine is a profession with a mission — “to cure sometimes, to relieve often, to comfort always” — not a business.
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