Sen. Bernie Sanders introduced the latest version of his Medicare for All legislation on April 10, with 13 Democratic co-sponsors. Four of them, plus Sanders himself, are running for the Democratic presidential nomination.
Sanders says the bill, S. 1129, “would provide comprehensive and cost-effective health care for everyone,” while the White House has said the plan would “mandate a decrease or elimination of choice and competition.” Once again, health care is shaping up to be a focal point of the presidential campaign. Let’s look at the details of this proposal.
What is the overall plan?
As the name indicates, the plan would expand Medicare, which now covers primarily those age 65 and older and some with disabilities, to everyone, creating a new universal, single-payer health care system in the United States. The country would move from a fragmented system — in which nearly half the population has employer-sponsored, private insurance with the rest a mix of Medicaid, Children’s Health Insurance Program, Medicare, private individual market coverage and no insurance at all — to a system in which everyone’s insurer is Medicare. Or nearly everyone. Under the plan, the Veterans Health Administration and Indian Health Service would remain.
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What health care services would be covered?
The new “universal Medicare program,” as the bill calls it would cover: hospital inpatient and outpatient services, ambulatory services, primary and preventive care, prescription drugs and medical devices, mental health and substance abuse treatment, lab and diagnostic services, reproductive and maternity, newborn care and pediatrics, dental/hearing/vision services, short-term rehab, emergency care, transportation for low-income and disabled individuals to receive these services, and home and community-based long-term care. The bill would eliminate the Hyde amendment, which now restricts federal funding of abortion to only cases of rape, incest or endangerment to the mother’s life. The secretary of the Department of Health and Human Services could change or expand the benefits.
Current Medicare benefits would be expanded, since they don’t include dental, hearing or vision coverage now. Also, Sanders’ bill calls for virtually no out-of-pocket costs at the point of service for these benefits. There would be no copays, deductibles or premiums, with the exception of prescription drugs and biologics (such as vaccines and gene therapy), which could carry copays totaling no more than $200 a year per person, indexed for inflation.
Would private insurance still be available?
Potentially, but it would be limited. Once the bill is fully implemented, it would be “unlawful” for “a private health insurer to sell health insurance coverage that duplicates the benefits” provided under Medicare for All, and employers couldn’t provide such benefits either. However, private insurance could be sold to cover additional benefits that the new universal system didn’t cover — perhaps cosmetic surgery or other non-medically necessary care.
Private insurance would be available during a transition period (see the next question). The bill calls for funds to be set aside for workers in the insurance industry who lose their jobs because of the legislation.
There’s also the potential for direct-pay private contracts. One provision in the legislation allows for private contracts between health care providers and individuals for services for which the provider will not seek reimbursement from the government. The provider, however, must file an affidavit with the HHS secretary saying he or she won’t seek payment from the government for any service to anyone for one year. So, doctors would have to operate outside the universal Medicare system, with patients who could afford to pay out of pocket.
Sanders has made clear that private insurance would be eliminated. “You are not going to be able, in the long run, to have cost-effective, universal health care unless you change the system, unless you get rid of the insurance companies,” he said in an interview on MSNBC. Other Democratic presidential candidates haven’t fully embraced that part of the plan. When asked in a CNN town hall whether private insurance companies would go away, Sen. Kirsten Gillibrand said, “You’ll have to see whether they want to compete or not. I don’t think they will.”
After Sen. Kamala Harris said the plan would eliminate private insurance, also on CNN, her press secretary noted that she backed other legislation that wouldn’t go that far, as well. “She has co-sponsored other pieces of legislation that she sees as a path to getting us there, but this is the plan she is running on,” Harris’ national press secretary Ian Sams told CNN.
Gillibrand and Harris are co-sponsors of the legislation, as are Sens. Elizabeth Warren and Cory Booker, who also are running for the Democratic presidential nomination. Candidate Sen. Amy Klobuchar hasn’t signed on to the legislation and instead has co-sponsored a bill that would provide a Medicaid buy-in option and another that would allow those age 50-64 to enroll in Medicare.
How would the transition to Medicare for All occur?
Four years after enactment of the legislation, everyone would get a Universal Medicare card, and the new system would be in effect. Leading up to that fourth year, traditional Medicare benefits would be expanded — adding dental, vision and hearing aids — and the eligibility age would be slowly lowered, allowing people to buy-in to Medicare if they chose to do so. In year one, for instance, the eligibility age would be 55 and by year three, it would be 35. A Medicare transition plan would be available through the Affordable Care Act exchanges, but open to anyone who wanted to enroll. Children could be enrolled in the first year after enactment.
People could choose to keep other insurance coverage during this transition period.
Could people decide to opt out?
No, though they could enter into private contracts with health care providers and pay for those services themselves (see the private insurance question above). However, the bill says every resident of the United States would have the universal health care benefits, and people can’t opt out of paying whatever taxes will be assessed to finance the plan.
How would health care providers be affected?
They would have to meet minimum national standards and sign participation agreements, barring them from charging extra fees to patients. They would be paid according to a fee schedule, established by the HHS secretary. A new Office of Primary Health Care would set goals for increasing access to primary care and promote an increase in primary care practitioners.
The HHS secretary also would negotiate prices paid for pharmaceuticals and medical devices.
What about access to care?
The plan includes a “freedom of choice” provision stipulating that people can choose any health care provider, and Sanders has highlighted this part of the plan, saying, “you’ll go to any doctor that you want, you’ll go to any hospital that you want.”
That’s what the bill proposes. But with universal coverage and zero copays, demand for health care services would likely increase. “[T]he Sanders plan would increase demand for health services by eliminating individuals’ direct contributions to care (i.e., by eliminating deductibles, copayments, and coinsurance), but not all increased demand could be met because provider capacity would be insufficient,” the Urban Institute said in a 2016 analysis of Medicare for All, which was similar to the current bill. The Urban Institute incorporated “provider supply constraints” in its estimates. Similarly, a RAND analysis published this year said that “providers’ willingness and ability to provide health care services—including the additional care required by the newly insured and those benefiting from lower cost sharing—would most likely be limited.” The extent of this issue would depend on the change in individual providers’ payments and their responses. RAND said: “As a result, some patients might experience longer wait times for care or face unmet needs.”
How much would the plan cost?
There’s no firm price tag, as many details need to be filled in, but several organizations have produced estimates using varying assumptions.
To put these estimates in context, total national health expenditures were $3.5 trillion in 2017 and are projected to be $47 trillion over 10 years, 2018-2027, according to the Centers for Medicare & Medicaid Services.
The Urban Institute estimated in 2016 that the Medicare for All plan would increase all national health expenditures by $518.9 billion in 2017 and by $6.6 trillion over 10 years. That report also said the plan would increase federal spending by $32 trillion over 10 years; that’s because spending by private insurers, employers, individuals and states would shift to the federal government.
Kenneth Thorpe, a professor and chair of the Department of Health Policy and Management at Emory University, estimated in 2016 that the increase in federal spending would be $24.7 trillion over 10 years.
In an estimate published online by Sanders’ 2016 presidential campaign, Gerald Friedman, a professor of economics at the University of Massachusetts Amherst, estimated Medicare for All would reduce national health spending by $6.3 trillion over 10 years and new government spending would amount to $13.8 trillion over 10 years.
The Mercatus Center at George Mason University published a study that, similar to the Urban Institute report, estimated the increased federal spending at $32.6 trillion over 10 years. Of course, health care spending by other payers would decrease. Sanders’ office and the study author, Charles Blahous, have disagreed about the overall finding of his study. Sanders’ office has said the study shows a net decrease in national health care spending, but Blahous said the “actual cost” would be “substantially greater” because of “unlikely” assumptions he used to estimate the cost, such as a 40 percent reduction in private insurance reimbursement rates to providers.
A RAND Corporation report issued this year estimated a 1.8 percent increase in total health spending if implemented in 2019. (RAND only produced an estimate for that year.) It said spending by the federal government on health care “would increase substantially, rising from $1.09 trillion to $3.50 trillion, an increase of 221 percent,” but, of course, health care spending by employers, individuals, private insurers and state/local governments would decrease substantially, or be eliminated.
The New York Times asked these same think tanks and experts to estimate total health expenditures for next year under Medicare for All, and it also found a wide range of estimates. The Times noted that “the difference between the most expensive estimate and the second-most expensive estimate was larger than the budget of most federal agencies.”
It’s difficult to give a clear cost figure when various assumptions — such as provider pay rates, savings from prescription drug negotiations, utilization of health care — have to be made.
How would it be financed?
The legislation doesn’t include any information on how it would be financed. Instead, Sanders has put forth several suggestions to be debated. They include: payroll taxes, an income-based “premium,” increased taxes on high-income individuals, and fees on major financial institutions. There would also be some tax savings, for instance through eliminating the tax exemption of employer-provided insurance premiums. The employer exclusion “will cost the federal government an estimated $280 billion in income and payroll taxes in 2018,” says the Tax Policy Center.
Do the other 2020 Democratic presidential candidates support this plan?
Reps. Tulsi Gabbard, Tim Ryan and Eric Swalwell are co-sponsors of the House version of Medicare for All, H.R. 1384. As for the rest of the 21-person field, The Hill has a breakdown of what every candidate supports regarding changing the health care system.
What else has been proposed in terms of expanding Medicare?
Beyond H.R. 1384, which, like Sanders’ plan, would create a national Medicare program, other legislative proposals would make much less sweeping changes. There are bills to offer a public option based on Medicare through the Affordable Care Act’s exchanges, and other legislation that would allow individuals to buy-in to Medicare at age 50. House and Senate bills also call for a Medicaid buy-in option available through the ACA exchanges.
Details on all of those plans are available through an interactive comparison tool by the Kaiser Family Foundation.