Medicare-for-All Should Be Called Medicaid-for-All

Bernie Sanders' campaign is on life support after Joe Biden's victory on Tuesday night in the key primary race in Michigan, which Sanders needed to win to have a realistic shot at the nomination. While his campaign limps on, Sanders will continue to mislead voters about his signature campaign promise of Medicare for All. Like other Medicare for All supporters, he has leveraged the good name and popularity of Medicare to bolster his healthcare overhaul.

The truth is that Medicare and Medicare for All are fundamentally different. Under a Medicare for All system, Medicare won't simply be extended to "all" Americans as implied. Rather, a new single-payer system will replace all healthcare choices in the country, including Medicare, with significant implications for consumers and taxpayers.

Medicare for All is far closer in coverage design to Veteran’s Administration healthcare or traditional Medicaid, which is administered by states to cover their low-income populations. “Medicaid for All” or “VA for All” just don’t have the same ring to them. For good reason: Medicaid and the VA system are plagued by well-documented claims of substandard care, cost overruns, bureaucratic inertia, and months-long waits to see doctors. 

Voters should know the fundamental differences between Medicare and Medicare for All before throwing their support behind the latter or the politicians like Sanders who champion it. 

Consider the differences in how these health plans are funded. Under Medicare for All, there is only one payer, the government, which covers all healthcare-related expenses. Hence the moniker “single-payer.” Under Sanders’ proposed system, the federal government would even pick up the tab for prescription drug, dental, and vision costs, making it more generous than the Canadian or British versions. 

This government-run healthcare would come at an enormous cost to taxpayers, who would be required to pick up the entire tab. After all, taxpayers are the sole source of government funding. Independent analyses estimate that Medicare for all would cost around $32 trillion over ten years, roughly double the size of the current federal budget. Medicare for All would cost more than Social Security, Medicare, and Medicaid combined. 

In contrast, traditional Medicare has significant cost-sharing with patients. It is funded not only by direct taxes but also by payroll contributions, beneficiary premiums, deductibles, copays, and coinsurance. Medicare typically requires beneficiaries to pay 20 percent of their bills. 

According to the Medicare website, Medicare Part B, which covers outpatient care, has an average monthly premium of $145 with an annual deductible of $198, as well as a 20 percent copayment. Unlike health coverage under the Affordable Care Act, Medicare has no out-of-pocket maximum payment limits, incentivizing beneficiaries to limit their healthcare expenditures. 

Medicare’s cost-sharing helps keep the program’s costs in check and protects taxpayers and other vital programs that are dependent on tax dollars. There is no similar market restraint on Medicare for All. There is just a direct bill to taxpayers for every medical or medical-related need or want in the country. Since medical need is nearly infinite, Medicare for All's cost to taxpayers is limitless.   Cost-sharing not only keeps a cap on Medicare’s costs, but it also provides beneficiaries with far more choices than a single-payer system. Beneficiaries can choose among many different coverage options depending on their healthcare needs. 

One-third of the 64 million Medicare enrollees are covered by Medicare Advantage plans that are provided by private insurers. More than half are enrolled in Part D prescription drug plans that are also administered by insurance companies. About 13 million have supplemental Medicare insurance known as “Medigap” that is provided by private carriers. And another 10 million have privately-run health coverage from their jobs or unions. 

The ability to tailor plans to individual circumstances is a major reason why Medicare is supported by 75 percent of enrollees. Medicare for All, by contrast, would eliminate all existing health plans, including Medicare, state-based exchanges, and employer-sponsored coverage such as Kaiser. It would force all participants and providers into a one-size-fits-all plan and system whose terms and conditions are dictated by the federal government. 

Medicare for All is a full revision of the delivery and funding of healthcare in the United States. The branding of this proposal as Medicare for All is deliberate and inaccurate. Voters considering Medicare for All should ask themselves if they'd still support it under the more accurate name of Medicaid for All. Judging by Sanders' latest defeat, it seems as though voters are wising up to this distinction.   

Dawn McFarland is the founder and president of M & M Benefit Solutions Insurance Services.