Why not Medicare for all? No, not that M4A

I’ve thought long and hard about this. It makes sense even with all the risks to simply expand Medicare to cover all Americans. If you have a better idea that accomplishes all the desired goals, let’s hear it.

The current health crisis again demonstrates once again we need to do something about our healthcare system, and soon.

As I see it our primary goals should be:

1. Coverage for all Americans

2. Manage costs with the least possible third-party intervention in our health care.

3. Allow as much freedom of choice as possible.

This can best be accomplished through a public/private partnership with reasonable patient financial responsibility.

I have been enrolled in Medicare for ten years. My wife has used it many times; in-patient, outpatient, emergency room, trauma center, etc. Along with supplemental coverage, it works. If we have bills, our out-of-pocket costs are capped at $1,750 through an employer supplemental plan. Medigap plans provide more coverage.

Medicare currently covers 18% of the US population, over 60 million Americans. Currently 10,000 Americans a day enroll in Medicare. It’s hard so see a strong argument against expanding this system for all Americans.

Those of us on Medicare can use virtually any health care provider in the USA, we can enroll in private sector supplemental plans that pay some of our out of pocket costs, or we can use the Medicare Advantage option to virtually eliminate out of pocket costs in exchange for a more limited choice of health care providers.

The great majority of physicians participate in Medicare. If we happen to use the services of one of the relatively few doctors who do not accept Medicare assignment, we are protected because what they can bill is limited by law. Even if we use one of the very few doctors who has opted out of Medicare, that doesn’t mean a huge bill, it means they don’t want to file a Medicare claim. They can charge at will which the patient can determine in advance and negotiate. That’s a choice.

Medicare uses modest deductibles and co-pays. There is nothing wrong with that. Creating the illusion that health care must be free by eliminating all out of pocket costs is counterproductive. Everyone, based on their income, should expect to pay a portion of their health care bills. Such bills are no different than other bills we pay every day. A modest co-pay for an office visit does not prevent the great majority of Americans from seeing a doctor, it’s a matter of spending priorities.

While health care providers do not like Medicare reimbursement levels which are 20% or so less than private insurance (Medicaid is even less), Medicare does virtually no concurrent review or pre-approval; something doctors dislike about health insurance.

Let’s consider the positives of expanding current Medicare:

1. The quickest route to cover all Americans

2. A known system to both health care providers and Americans

3. Few limitations on when and where services can be provided or by whom.

4. A payment system in place and familiar to most health care providers.

5. Continuation of choice beyond baseline coverage

6. An ongoing optional role for health savings accounts (HSA).

7. Uniform, but regional and other factor adjusted reimbursement rates.

8. Premiums that are income based.

9. Consolidation of programs; Medicaid, CHIPS, TRICARE and VA benefits, except for those with military service-related healthcare needs, would be eliminated.

10. An ongoing role for private health insurance.

Now the issues:

1. Cost. Given there is a known system with known coverage, estimating the costs would not be that difficult. The starting point is current Medicare. Adjustments would be made reflecting the needs of all ages. Modifying the system for added benefits would come after gaining experience.

2. Paying for the system. That’s easy, a combination of payroll taxes, premiums and out of pocket costs. Employers would pay a flat 8% of payroll which is generally the average they pay today. The payroll tax percentage for workers would be less, but higher than the current Medicare tax. Premiums would remain income based as would be some out-of-pocket costs. Premiums would be based on the total cost, not just the cost of Part B.

3. How will ongoing costs be managed? This question is generally ignored, but one that we should seriously consider. Either we manage costs or we continuously raise the cost of funding the system. In my view, managing costs requires questioning and maybe limiting some health care services, it may mean doing cost benefit calculations for certain procedures, it means managing resources. How else shall we manage costs?

4. Current provider reimbursement levels are inadequate. Medicare payments to health care providers are significantly less than private insurance. It is unlikely this can continue without harming health care services. We must find a fair level between today’s market prices and Medicare. And, we must encourage health care providers to maximize efficiency to help with their profits. There is minimal incentive for that today.

5. Loss of control. Yes, there will be more federal control over the payment of healthcare, and eventually perhaps over some of the the care we receive. However, studies show there is substantial unnecessary health care. The reality is that you cannot have an affordable system without some controls. Our current system demonstrates that. Even the strategies employed by insurance companies and employers have had a limited effect. Remember, it’s not always the unit prices of healthcare services that primarily drive costs, it’s the use of those services.

6. Expansion of current Medicare covered services only implemented as costs develop. Adding dental or other new coverage must be delayed and when added, all costs must built into the funding structure immediately. However, coverage would be immediately adjusted for all age groups and obstetrics.

7. There should be a national healthcare data base for individuals for efficiency, for better care and to avoid duplication and unnecessary care. You enter the system, present your card and your medical and treatment history is instantly available to your provider.

9 comments

  1. You said,

    “If you have a better idea that accomplishes all the desired goals, let’s hear it.”

    I have a better idea – better because it is outside the “government has to do it” conventional wisdom box.

    My Suggestion: Government STOPS taxing income (from any source, to any recipient) BEFORE said income can be diverted to actual, incurred healthcare delivery costs.

    How it works: Two very simple lines on Tax forms for ANY taxpaying entity, that lists 1. Health Insurance premiums paid (for ANYONE), and 2. Actual non-insurance, out-of-pocket healthcare expenses incurred (for ANYONE) – BOTH of which are treated by the IRS as “Adjustments (reductions) to Gross Income”, and therefore not subject to taxation.

    Justifications:
    You’ve endorsed Health Savings Accounts (HSAs), as do I. But HSAs are only incurred healthcare expense income tax exemptions Before-the-Fact. Not to mention the restrictions/limitations on HSAs (“earned income only”, annual limits, etc.).

    I’m arguing here there should be equivalent and automatic Income Tax exemptions for After-the-Fact incurred healthcare expenses as well – including insurance premiums – and NO restrictions/limitations. Furthermore, why should ANY taxpaying entity (Individual OR Business) ONLY be granted Tax exemptions for their own, or their “immediate family’s”/employees, incurred healthcare expenses, as is the case now with HSAs and employer-paid insurance premiums?

    For examples, if Jeff Bezos wants to pick up the tab for MY colonoscopy, in order to get the Income Tax exemption I’m recommending, why should the Government deny that exemption? On a more practical level, if I wish to use some of my taxable investment (“unearned” income, per IRS rule) – or even my accumulated wealth – to help pay for my next door neighbor’s kid to get a bone marrow transplant to treat cancer, why should I be denied the Income Tax exemption for having done so?

    Tell Government to STOP Taxing Income BEFORE it can even be diverted to paying for actual incurred healthcare expenses!

    Achieving ALL your stated goals entails removing Government from the healthcare treatment decisions and healthcare provider compensation decisions to the greatest extent possible. And replacing that Government intervention with the most appropriate alternatives: The healthcare providers themselves, their patients, their patients’ family, friends, and community. NOT Government! “We the People” can get this done – and much more easily and efficiently – if Government merely got out of our way and perhaps “incentivized” us to do it within the tax code.

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    1. I don’t see how that assures 100% coverage for all. And what about large number of people who pay no income taxes? HSAs would be adjust to better meet all needs perhaps even with public contributions for the poor

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      1. The 100% coverage for all already exists, Dick. Hospitals and healthcare providers are already required to render healthcare to anyone who requires it, irrespective of the recipient’s ability to pay. The problem is, and always has been, getting the mechanisms in place to efficiently compensate caregivers – NOT getting “100% coverage”. My suggestion merely re-introduces efficiency.

        As to the “large number of people” who have no (or low) income, and therefore pay no income tax, that also is a bogus argument. ONLY people who have an income, and therefore DO pay income taxes, PAY FOR EVERYTHING in this country – and always have, and always will. My suggestion merely enhances my ability, as a taxpayer, to pay for healthcare for myself, my family, my neighbors and my community – WITHOUT having to pay for endless layers of Government bureaucracy FIRST.

        And last, my suggestion isn’t intended to provide some “magic formula for free health care for all” – I’m not running for political office. My suggestion is merely a mechanism for re-introducing efficiency into healthcare provider compensation, and stripping out as many layers of “third-party-payer” administrative costs as possible.

        But it does require you to think outside the “government has to do it” box in order to appreciate that.

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      2. Sorry. I can’t agree. I don’t see your examples of coverage as universal coverage. And to be clear I am but suggesting free anything, but paying via taxes, premiums and point of service out of pocket costs.

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  2. I’ve also been on Medicare for 10 years and it has worked well for me although I am in good health with no serious conditions. I too think expansion of Medicare makes sense but one thing you didn’t mention was tort reform. Most experts I’ve read see it as essential to maintaining a universal plan that is affordable. Thoughts?

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    1. That’s a factor to be addressed but studies have shown that the net impact on health care costs is not as great as often perceived.

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  3. I am 7 years from Medicare so I do not know all the ins & outs. I am not against such a system but the government can’t even run the VA hospitals and there is so much fraud with Medicare, that an unchecked government system, that will become politicized, worries me very much.

    With M4A, over time, I think that the government will set the reimbursement rates too low and drive doctors to other fields. How do we stop that? The best way to innovation and efficiency is competition. How do we keep that up with only one provider? Financial rewards (profit) also leads innovation.

    Let’s look at the current covid-19 crisis. Most states regulate insurance and hospitals. When a new hospital is built in NJ, they must prove a need. Hospitals must make money or fundraise to stay open. Hospitals now are required to provide charity care which they may or may not get money back from the various levels of government. So, how many ICU beds and ventilators should they have ready for the next pandemic 25, 50, or 100 years from now? Who is going to pay for that and will that money be taken from day-to-day M4A care? I guess what I am saying, in non plague times, how is M4A ensure that enough doctors want to practice and hospitals want to maintain beds under various reimbursement rates? Was the number of available beds acceptable this year?

    Decades ago there were public run hospitals. Most were closed and torn down due to budget and maintenance issues. If M4A will work, then why did the public hospitals close?

    You say that the costs are known. What is known is how much we spend as a whole. Nobody knows what healthcare really costs. Mr. Coppola doesn’t like paying 4x the amount because of income. I don’t like that we are not all being bill at the same rate. Who pays how much is another issue but I don’t like that doctors inflate their bills and are willing to accept less and varying amounts from different payers. If four people walk into the same doctor’s office and get their blood pressure checked, depending on their insurance, the doctor might get paid four different payment amounts. If the same person walked into four different doctors offices, the billed amount might all be different. In theory M4A would stop this but since nobody knows what things cost or will it drive doctors from the field with a one-size-fits all payment plan?

    I don’t know the answers other than no system will ever work if the politicians have their hands in it. Just look at Social Security how it’s purpose has expanded without proper funding.

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    1. All those issues are addressed. Your comment on costs I assume relates to the hospital or physicians actual operating costs to provide care and if so, you are correct. However, it doesn’t really matter if the fees paid are negotiated or set in a reasonable manner. It’s up to providers to become efficient. The risk of government involvement are real, but they seem to work in many other countries. Our system would change for than just paying for care that’s for sure and costs will still climb, but I can think if no other way to reach a universal coverage goal fair to all Americans. As I said, Medicare works even while frustrating providers at times. However, the direct interference by Medicare in our health care is virtually non existent actually perhaps too hands off at times. It simply is not feasible to have any system without controls and limitations.

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  4. I have no problem with medicare for all as long as we all pay the same amount. Rather than me and my wife paying 4 times the price because of income.

    Frank Coppola

    Sent from my iPhone

    >

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