No Buts About It, Medicare-for-All Is The Answer

By Merton C. Bernstein and Theodore R. Marmor
Many health policy experts regard Medicare-for-All as a model for reform of America’s indisputably troubled and costly medical arrangements. They express admiration for its administrative efficiency and the resulting savings that could pay for extending coverage, perhaps to all.

However, too often, even these Medicare-for-All admirers sometimes succumb to “Yes, but…” syndrome that “Medicare-for-All is politically impractical.”

Some alternative proposals would compel individuals to select from among insurance plans, thereby forgoing Medicare-for-All’s economies. Others call for a Medicare-like plan as one option among many. And then there’s the Massachusetts program, which actually is not universal because it omits children, among others.

All things considered, Medicare makes the most practical platform for economically extending coverage.

Not least, Medicare has been on the job for more than four decades and has resolved hundreds of practical problems that any large-scale health program must address. In contrast, any step-by-step program, even one that purports to be “Medicare-like,” must start from scratch—because the “like” by definition means different.

Some members of the “yes, but…” club advocate modest steps to expand the umbrella with the ultimate goal of achieving universal coverage. But those proposals, by their proponents’ own calculations, actually would increase total costs by at least $60-$120 billion dollars annually.

These anticipated additional costs derive from a major design flaw: they would provide individually determined, means-tested subsidies to make costs appear affordable. But those expensive tests, which must be done for tens of millions of participants, substantially increase outlays.

In addition, private plans’ non-benefit costs include advertising, lobbying, sales commissions, often enormous executive compensation, and, of course, profits.

We must move to a system that reduces per capita costs and pays for expanding coverage from those savings. That’s where Medicare-for-All shines. Much of its savings derive from simplifying medical care insurance. And simple is cheap.

With Medicare-for-All, there is no need to trudge through data to ascertain eligibility; no need to match a claimant’s bill with hundreds or thousands of possible rate schedules; and practically no need to check to see if a particular condition or treatment is covered.

Medicare-for-All and other “single-payer” plans frequently are disparaged as “one-size­-fits-all” programs, as if that were undesirable. Yet we all need the same protection in the event of illness or injury…and all should have it.

Medicare-for-All also would banish the current discriminatory practices that discourage the employment of women of child-bearing age and older people. Private insurers vary their rates according to the age and gender of the population covered. Since women of child­bearing age and older employees on average have high projected medical care costs, insurers charge according to the proportion of such members in a group. This can influence hiring and lay-off decisions.

Medicare-for-All would set employer and employee premiums without regard to gender or age, resulting in nondiscriminatory insurance rates and employment.

Medicare-for-All also means the end of a common practice of private insurers refusing coverage for pre-existing conditions. (The Massachusetts “reform” law permits delaying coverage for pre-­existing conditions.)

With Medicare-for-All, providers and insurers also would save huge amounts on billing. Those sums can be shifted to treating more people and to pay for types of medical care not now covered by Medicare and typically excluded or extremely limited by private plans—most notably vision, hearing, and dental treatment.

The expansion of coverage would create new jobs for insurance workers and put dollars already being spent to better use.

Back in 1994, a prominent advocate of the Clinton proposal dismissed single-payer healthcare as involving “too much government.” That argument disappears with Medicare-for-All because Medicare uses private insurers as intermediaries to administer the program.

Applying uniform regional rates determined by medical care cost experts enables insurers to provide those services at very low cost. In contrast, when insurers administer private programs, every dollar of benefits comes out of insurer profits or adds to sponsor costs. Typically sponsors seek an intermediary whose services result in the lowest outlays. Those roles pit insurers and sponsors against patients. Medicare-for-All eliminates those conflicts.

To date, Medicare-for-All has been incorrectly framed in ideological terms. In reality, Medicare-for-All is the most practical reform option. It would greatly reduce non-benefit outlays and lessen employment discrimination. Those features alone should create powerful popular support.

Our economic situation requires that we pursue less wasteful policies. Reducing healthcare costs that exceed what other developed nations spend heads that agenda. We need the economies of Medicare-for-All as much for the well-being of American enterprise as for the adequate medical care of our people. We can no longer tolerate a health insurance non-system that costs too much, protects too few, and offers too little.

 (Mr. Bernstein, a Brewster resident, is Coles Professor of Law Emeritus, Washington University; Mr. Marmor is Professor of Political Science Emeritus, Yale University. This essay in more extensive form appeared in Health Affairs magazine’s blog, posted on August 28, 2008.  Any reproduction may not be for profit.)