Medicare for All and Medicare at 50: What will it all mean

As candidates make their way to your backyard to discuss their agenda for the 2020 presidential campaign, you can count on health care reform being high on the list of policy topics discussed.

Preparations have begun and plans are being drawn for the 2020 presidential campaign. As candidates make their way to your backyard to discuss their agenda, you can count on health care reform being high on the list of policy topics discussed.

Both proposals, Medicare for All (M4A) and Medicare at 50 (buy-in plans), are sure to make their way into campaign speeches across the country. With much debate, voters are likely to back candidates that take a strong stance on the topic — one way or another.

With boundless political partisanship on the topic, there is one major aspect to discuss with all politics set aside: What will the proposals mean to the U.S. health care system as a whole?

Medicare for All

Having a single-payer system has been proposed multiple times in the U.S., all with little chance of being passed. However, the current Medicare for All proposal is led by presidential candidate, Bernie Sanders, along with 14 co-sponsors in the Senate — the most momentum a proposal of its kind has had up to this point. The bill aims to:

Amidst conflicting statistics on the proposal’s popularity among Americans, the Kaiser Family Foundation found that 55 percent of U.S. voters believe that “Medicare for All” would allow an option for those without insurance to receive coverage, but do not view it as a complete elimination of private insurance.

Impact on hospitals

There is no question that when it comes to payments, doctors and hospitals get paid out significantly less by original Medicare than by private insurance companies. The American Hospital Association found that in 2016, Medicare covered an average of 0.87 of every dollar spent on care, while private insurance companies cover 145 percent of the hospitals’ costs.

As many hospitals already find their financial situations to be less than satisfactory, the addition of more patients being covered by a Medicare program could only further the strain. The risk runs higher for hospitals in rural areas, where fewer patients and services make it difficult to keep the balance sheet in check. If these hospitals are forced to balance the hardship of being rural along with partially covered bills as a standard, some opponents fear that it could lead to hospital closures in some areas.

Impact on doctors

If passed, Medicare for All would mean that doctors would participate in an agreement with Medicare where they would be reimbursed for claims. The good news is that many doctors already accept Medicare in an agreement like this. However, they typically count on a mix of payments from private insurance, patient out-of-pocket and Medicare combined.

Moving to a single-payer system would mean lower pay as a standard. There are some concerns that this will create difficulty in sustaining a practice for many doctors.

Moreover, a single-payer system could add to an existing shortage of physicians. The Association of American Medical Colleges recently published data that predicts by 2032, our country will have a shortage of 122,000 physicians. This data is based on the health care system as it currently stands.

Impact on patients

Patients in the United States will experience, arguably, the most dramatic change to health care as they know it. The best data we can go off when it comes to patient care on a single-payer plan is that of other countries operating in a similar system.

Remember that with this proposal, we are talking about a complete elimination of private insurance. According to a 2017 survey from the CDC, there was 136.6 million Americans on a private health insurance plan. (Note, this number did not include the millions aged 65 and older who rely on private Medicare Advantage and Medicare Supplemental plans). This would mean hundreds of millions of people would be forced out of their private coverage.

When it comes to patient care, we can look to single-payer Canada, where the data shows that patients wait an average of 20 weeks from the time they are referred to a specialist to the time they are able to see the specialist. For major tests like MRIs, the Canadians wait an average of 10 weeks before being seen.

In 2018, the Fraser Institute said in a report conclusion on wait times:

“Research has repeatedly indicated that wait times for medically necessary treatment are not benign inconveniences. Wait times can, and do, have serious consequences such as increased pain, suffering, and mental anguish. In certain instances, they can also result in poorer medical outcomes — transforming potentially reversible illnesses or injuries into chronic, irreversible conditions, or even permanent disabilities.”

As an American married to a Canadian citizen, I’ve also personally watched one of my in-laws wait years (with significant pain) for an MRI. When she finally had the exam performed, the tumor on her spine was so significant in size that she was scheduled for surgery immediately. Fortunately, the tumor turned out to be benign and she is now able to walk without pain. However, I’ve never gotten over wondering how differently this story would have ended if a malignant tumor had been left to grow inside her body all that time.

So, there is certainly cause for concern that a single-payer system in the U.S. might cause further physician shortages and longer patient wait times. The answers will depend upon the pay available to providers and their staff, how the general public treats “free” health care, and how the Medicare infrastructure would be able to adapt to include an entire nation of beneficiaries.

The outlying nuances and lingering questions should serve as a reminder to all Americans that moving to Medicare for All is larger than a mere political stance. It would completely overhaul our health care system.

Medicare at 50

Another Medicare proposal coming to a campaign rally near you is the “Medicare at 50 Act.” This more moderate proposal is a buy-in option for people ages 50 to 64 who want to get on Medicare plans privately administered through exchanges. This would allow early retirees and those forced off their group plans to receive a solid government-backed health care plan.

Senators in support of the bill argue that a less dramatic plan like this would not force anyone to switch plans and would also be far less expensive than a Medicare for All overhaul. Legislation like this has been proposed in the past without much success, but it’s likely that heading into the 2020 elections, it will be more seriously considered.

When considering how Medicare at 50 would impact our health care system, the data points again suggest lower payouts to hospitals and doctors but in a much less dramatic fashion than Medicare for All. Hospitals and doctors will still have the balance of patients with private coverage paying adequately versus lower Medicare payouts.

Since Medicare historically reimburses health care providers at a lower rate than private insurers, the buy-in program could potentially offer lower premiums for beneficiaries. We also would expect the quality of care to be similar to how Medicare Advantage plans currently cover beneficiaries.

Like any legislation on the table, Medicare at 50 has pros and cons; but there is no question that its impact on our health care system would be easier to manage than a complete transition to single-payer. Additionally, patients in the 50-64 age range would reap the benefits of quality health care, with the decision to buy-in still in their hands.

Since Medicare at 50 would cause less radical change, it may end up being the option that we see some more moderate candidates embrace so that they can show they are committed to reforming health care in America, while not completely ending the entire private health insurance system as we know it. If nothing else, the two proposals will make for a very interesting election season altogether.

Do you have thoughts on Medicare for All or Medicare at 50? I’d love to hear them.

About the Author: Danielle K. Roberts is a Medicare Supplement Accredited Advisor, member of the Forbes Finance Council and co-founder of Boomer Benefits located in Fort Worth, TX. Her award-winning agency is licensed and appointed in 47 states and has helped tens of thousands of Medicare beneficiaries understand their benefits since 2004. Since starting her agency nearly 15 years ago, she and her brother have grown their company into a multi-million-dollar business that employs workers of all ages. They were recently awarded the 2019 Health Insurance Advisory Firm of the Year Award by Finance Monthly.

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