How Would Medicare for All Work?

Key Takeaways:

• Medicare for all is a proposed federal program that would replace private insurance and Medicaid with a single-payer system that would reduce or eliminate the healthcare-related financial burden for individuals.
• According to some economists, the costs would amount to $3 to $4 trillion per year over a decade.
• While Medicare for all could lead to a healthier population and potentially lower healthcare rates, it could result in reduced state-of-the-art medical technology and longer wait times for elective procedures.

Medicare Basics

Medicare is a federal health insurance program that provides coverage for individuals who are 65 or older, as well as certain younger people with disabilities or End-Stage Renal Disease (ESRD). The insurance is made up of three core parts:

• Part A (Hospital Insurance)— Covers inpatient hospital stays, skilled nursing care, hospice care, and some types of home health care.
• Part B (Medical Insurance) — Covers outpatient care, medical supplies, and doctor and preventive services.
• Part D (Prescription Drug Coverage) — Covers the cost of prescription medications.

Related: How Does Medicare Work?

These three parts are known as Original Medicare. However, third-party insurance carriers also bundle these coverages (and frequently include additional coverages) as Part C plans, also known as Advantage Plans.

With these details in mind, let’s dive in and find out why there’s a push for Medicare for all.

Why is Medicare for All a Consideration?

According to The Commonwealth Fund, the United States spends more on health care as a share of the economy than any other high-income country. Yet, we have worse medical outcomes, the lowest life expectancy, and the highest suicide rates. 

We also have the distinction of “the highest chronic disease burden and an obesity rate that is two times higher than the OECD average,” in addition to “the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths.”

In other words, even though most Americans spend exorbitant sums on individual and family health insurance plans with ultra-high deductibles (we spend “16.9 percent of gross domestic product (GDP)” on health coverage, “nearly twice as much as the average OECD country”), we’re the least healthy high-income society on many different levels. And these statistics leave out millions of Americans without any health coverage whatsoever or those who are financially devastated after falling ill.

With these details in mind, what would a Medicare for all program look like, and how might it help alleviate some of these burdens?

How Would Medicare for All Work?

While the current Medicare system only provides federal health insurance coverage for individuals aged 65 or older, and those under 65 with specific disabilities and health conditions, Medicare for all would broaden coverage to include all Americans, thereby replacing private insurance, employer-provided insurance, and Medicaid. 

In some Medicare for all proposals, individuals would still bear some financial responsibility for their medical costs, including dental and vision care, mental health care, and prescription drugs. Others would fully cover medical expenses with no financial burden on patients.

Since the federal government would pay for these costs, Medicare for all would be known as a ‘single-payer’ healthcare system. But do the numbers add up?

How Much Would Medicare for All Cost?

Together, some economists estimate that a Medicare for all program would cost the federal government between $30 trillion and $40 trillion over 10 years. Or about $3 to $4 trillion per year, which is less than the $55 trillion federal budget over the same time span.

These numbers more or less align with current U.S. health care spending, which amounted to $3.8 trillion or $11,582 per person, as of 2019. The most significant difference is that the burden for these costs would shift from individuals to the federal government.

Costs aside, what are the advantages and disadvantages of implementing a Medicare for all program in the United States?

Medicare for All: Pros and Cons

Now, let’s take a balanced look at some of the advantages and disadvantages of implementing a Medicare for all system in the United States.

Potential Medicare for All Advantages

• Doctors would only work with one federal government agency, compared to multiple private insurance companies, thereby streamlining paperwork and reducing staff needs.
• Because preventive care lowers expensive emergency room usage, universal healthcare leads to a healthier population, especially for economically vulnerable people.
• The federal government would have more leverage to provide lower healthcare rates.
• No more in-network or out-of-network doctors; individuals could see any doctor that has opted into the program.

Potential Medicare for All Disadvantages

• Without a monetary impediment, individuals might be inclined to utilize health services more often, thereby potentially overburdening the system. Similarly, people may not be as careful with their health.
• Because doctors could be paid less, they might not have a financial incentive to provide top-quality care.
• There could be less funding for state-of-the-art medical technology and related care.
• There could be long wait times for elective procedures.

Granted, we’ve covered a lot of information in a relatively short space. Where can you turn if you have questions?

How Can You Learn More About Your Medicare Coverage?

While Medicare for all is only a proposed system, you probably have questions and concerns about your current Medicare coverage. If so, you can trust the professionals at IHS Insurance Group, who have more than a decade of experience helping clients like you.

Need a FREE Quote or have questions regarding Medicare Coverage? We have three convenient ways to reach us:

1. If you prefer to talk to a licensed agent directly, please call (866) 480-5063
2. If you prefer to fill out a quick form and have an agent get back to you at your convenience, use the GET A FREE QUOTE tool.
3. Lastly, for those that want an immediate quote, please click HERE.

Also, check out our Medicare FAQs here.