“Medicare for All” has appeared in the nation’s political dialogue as we head into the next election cycle, with a number of plans being proposed by Democratic lawmakers. Recent public opinion polls show a growing surge in popularity for expanding the federal program that currently insures older Americans. Yet the polls also show a decline in favorability for Medicare for All when respondents are asked about the details of the plans. While there appears to be general agreement that Americans should have access to affordable coverage, the Democratic plans differ over options for reforming the health insurance system. To that end, the Medicare for All plans can be divided into one of two categories: a single payor or a public option plan. From there, the proposals diverge over a mix of fault lines, tradeoffs, and potential for disruption.
A single payor plan can be characterized as a single government-funded health plan that covers everyone. The Democratic plans that fall within this category propose to fundamentally restructure the Medicare program into a single payor plan covering all Americans. These plans propose to cover more services than are currently available under Medicare, including mental health, dental, vision, hearing and long-term care. Premiums, deductibles, and cost-sharing payments would also be eliminated. Americans would be unable to keep their employer-sponsored coverage because private health insurance plans are basically prohibited. While proponents of single payor point to the savings gained by doing away with the current system’s high administrative costs, the proposals are thin on detail for addressing the potential for dislocation and job loss caused by the new system.
A public option plan can be best described as a government-funded plan that functions as one of many insurance options that people can choose for their healthcare coverage. The public option plans being proposed would allow Americans to buy coverage from an existing government health plan (e.g., Medicare or Medicaid). Such plans would preserve the current insurance system so Americans would be able to keep their private or employer-sponsored plan if they so choose. Additionally, those who qualify for insurance subsidies under the Affordable Care Act could use the subsidies to help buy private coverage or the public option under most proposals. While some proposals would allow all Americans and/or employers to buy into Medicare coverage, the majority of plans would limit this option to certain groups like those who are 50 years or older. The healthcare sector appears united in its objection to any expansion of the Medicare program. Providers, in particular, have voiced concerns over the financial impact of being paid for services at the lower Medicare rate (as opposed to private insurance, which pays about 40% more) and how this might translate into possible layoffs, job loss, and closing of facilities. This would dramatically change how healthcare financing has functioned in the United States since the inception of the Medicare and Medicaid programs in the mid-1960s.
Changing the way Americans receive and pay for healthcare coverage remains a dicey proposition. A number of questions about financing and cost details are yet to be answered as the Congressional Budget Office has not scored any of the plans. Further complicating the economics are the many variants of Medicare for All and the resulting confusion when comparing single payor vs. public option plans. The introduction of numerous Medicare for All bills and intra-party objections to the various proposals could also complicate public support for maintaining and protecting the Affordable Care Act. Despite all of the practical and political considerations, the question of Medicare for All will be a central policy issue in the 2020 Presidential campaign as the candidates propose a framework for expanded coverage and explain to voters what it all means.