Everyone thinks of “Medicare for all” as a liberal idea, an extremely liberal one embraced by the socialist wing of the Democratic Party. It’s an idea Democrats were hesitant to embrace in the Obama era, for being too far out of mainstream political thought. It was thought of as an idea that was too easy to demonize as socialism.
What everyone seems to be forgetting is that “Medicare for all” could end up being a politically moderate way to bring more market competition to the U.S. health care system. Think I’m kidding? Give me a chance to explain myself.
Deciding whether Medicare is “socialism”
When we call a health care system socialized, we need to clarify what part of the system we are talking about. For example, Canada has a socialized payment system, which they (unoriginally) call Medicare. But Canada doesn’t have a socialized provider system. Instead, Canadian hospitals and clinicians work in private enterprises, billing Medicare for their services.
By contrast, the United Kingdom has a fully socialized system, with payment coming from the government, providers working with government employees, and hospitals and clinics owned and operated by the government.
In keeping with this view of socialism, “Medicare for all” is not the same as a fully socialized health care system. Under Medicare, providers are still free to operate as private enterprises, and can decide whether to operate as nonprofit organizations – like the Mayo Clinic – or as for-profit ones – like the Hospital Corporation of America.
Even more important, we can’t even call “Medicare for all” a socialized payment system. I’ll explain more about that in a short while.
Deciding whether Medicare is “single payer”
When Americans promote “Medicare for all,” many point to the benefits they perceive will follow from having a single-payer system. But we have to be careful not to equate Medicare with single-payer. Currently, Medicare is available to Americans 65 or older, as well as to those with kidney failure or chronic disability. But Medicare is not a single-payer. That’s because Americans are increasingly receiving Medicare coverage through private insurance companies, in a program known as Medicare Advantage. In 2005, 13% of Medicare enrollees chose private insurance plans; that number rose to 33% by 2017. By 2027, experts predict that more than 40% of Medicare coverage will be through private insurers.
Under Medicare Advantage, private insurers have an opportunity to compete for business. A plan might offer expanded coverage: adult daycare, for example, or subsidization of the cost of installing bars in a person’s bathroom to reduce the risk of falling.
In theory, private insurers can test ways of providing health care more efficiently to their enrollees, thus making health care more affordable and/or more generous than it would be under a government-only Medicare program. Private insurers have been exploring a wide range of ways to simultaneously lower health care spending while improving health care quality, leveraging their enormous reams of data and their close-working relationships with providers. Now admittedly, the efficiency of Medicare Advantage is controversial. Insurers seem to be better at lowering health care spending in theory than in reality. But moving to a single-payer would reduce variation in how third-party payers function, leading to less room for innovation in this part of the health care market.
The bipartisan appeal of “Medicare for all”
Most Democrats abhor the idea of letting low-income Americans go without medical care for lack of coverage. That’s why “Medicare for all” is becoming a Democratic rallying cry. However, most Republicans hate the idea of a single-payer system. Fortunately, as we have seen, “Medicare for all” is not a single-payer plan.
That’s why in thinking through whether “Medicare for all” is a good idea, we have to remember the following facts:“Medicare for all” would expand the marketplace for health care insurance and delivery. “Medicare for all” would allow people to choose among health care insurers, both public and private, and both for-profit and nonprofit. “Medicare for all” would allow people to seek care at private hospitals and medical clinics – public or private, for-profit or not-for-profit. “Medicare for all” would give both parties something they dislike. Republicans would see more tax dollars going to health care, while Democrats would see a health care market still dominated by large insurance companies. “Medicare for all” would give both parties something they like. Republicans would see a more robust private insurance market, while Democrats would finally have the universal health care coverage they crave.
Let’s not too readily dismiss “Medicare for all” as a socialist idea. It can be much more than that.
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