Photographer: Daniel Acker/Bloomberg

What You Need to Know About ‘Medicare for All’

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In most of the developed world, everybody’s health care is paid for by the government. In the U.S., for years that idea has been relegated to the far-left edge of politics under the name of single payer. Last year, Senator Bernie Sanders, an independent of Vermont called it “Medicare for All” and put it at the forefront of his campaign for the Democratic presidential nomination. Now, with liberals revved up by their so-far successful fight to protect Obamacare from President Donald Trump and a Republican Congress, Sanders’s idea is getting some support. The legislation he introduced today would build on Medicare, the hugely popular insurance program for those over 65, to provide coverage to all Americans.

1. What would his Medicare for All bill do?

Expand it over four years into a system of universal care that would provide a greater range of benefits and cover more people. The transition would start by adding dental, vision care and hearing aids to Medicare while expanding eligibility to those age 55 and older, and all children under age 18. In the program’s second year, eligibility would be lowered to age 45, and in the third year to 35. By the fourth year, everyone would be covered.

2. How much would it cost?

That’s not clear, but it could run into the trillions of dollars. Last year, Sanders himself said his campaign proposal -- different from the current plan -- would cost $1.38 trillion a year. But he said it would save many middle-class families money by eliminating the insurance premiums they now pay, and that it would lower health-care costs over time. Sanders proposed covering the costs by raising taxes on the wealthy and on businesses, which would no longer need to foot the cost of health insurance for their workers.

3. How much would this expand the government’s role?

The U.S. as a whole -- individuals, companies and governments -- spent about $3.4 trillion on health care last year, or 18 percent of gross domestic product. Individuals and businesses paid just over half that amount, mainly in the form of insurance premiums and out-of-pocket costs, with states and the federal government footing the rest, according to federal estimates. The cost of Medicare last year was $678.6 billion. But researchers who support single payer estimate that government actually covers about 65 percent of the cost of U.S. health care when other tax subsidies are taken into account.

4. Does this have any chance of passage?

Right now, no. But it’s gained significant support. Sanders has introduced similar legislation previously with no fanfare. This time he has 15 Democratic co-sponsors in the Senate, including Kamala Harris, Elizabeth Warren, Cory Booker and Kirsten Gillibrand, all talked about as 2020 presidential candidates. When Obamacare was drafted in 2009, the lead Democratic negotiators eventually rejected single-payer as impossible. Last week one of them, former Montana Senator Max Baucus, told a local paper he thought it was time to start looking at a single-payer system.

5. Who’s against it?

The Republicans who control Congress are staunchly opposed to expanding government’s reach in almost any circumstance -- and certainly when it comes to health care. Insurers are also opposed. Their lobbying group, America’s Health Insurance Plans, said government-run coverage reduces choice and lowers quality. Insurers could largely be put out of business, save for supplemental plans people might purchase to boost their coverage. At the same time, there are different single-payer models in which insurers could play a bigger or smaller role.

6. Is this the way the rest of the world does it?

Many developed countries provide a form of universal coverage. Canada’s government, for instance, covers its citizens, who don’t have to pay for most services. Each province or territory has its own plan and people can buy supplemental coverage for things like prescription drugs, dental care and eyeglasses. In Germany, government-funded “sickness funds” cover the majority of citizens and are administered by competing not-for-profits. Germans can opt out and purchase private coverage. Sanders’ home state of Vermont attempted to institute a single-payer system but abandoned the idea in 2014 to avoid the big tax increase that would have been needed to pay for it.

The Reference Shelf

  • Bernie Sanders’ op-ed in the New York Times, “Why We Need Medicare for All,” and the issue page on it from his campaign website.
  • Medicare.gov list of what the federal health insurance program doesn’t currently cover.
  • In Bloomberg View, Megan McArdle makes the case against Medicare for all; Tyler Cowen looks at why it will be so hard to sell.
  • Physicians for a National Health Program has been pushing for reform since 1987.
  • A QuickTake Q&A on Medicaid’s starring role in the U.S. health debate.
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