With health care reform (or repeal depending on your point of view) in full swing, there has been a lot of talk about expanding Medicare to everyone. "Medicare for all," they say.
I've noticed among various discussions on blog posts and in the media that several people were referring to Medicare as a single-payer system. It's not only the general population who believes this, but also well-known journalists (e.g., Paul Krugman) and politicians (e.g., John Conyers Jr.). Even the Wikipedia page devoted to this system refers to Medicare as an example of such administrative structure, although only for people above 65.
Coming from a country that is known to have a single-payer system (as seen in the quotes further below), I couldn't understand why people were referring to Medicare as a single-payer entity. Therefore, I decided to look into it in greater detail to demystify the myth from reality. To help in this regard, I'll actually compare the Medicare program with the one used in Canada.
Since I already pointed out the Wikipedia page, let's see how the article (which lacks proper citations) defines the system:
- "Single-payer health care is medical care funded from a single insurance pool, run by the state. Under a single-payer system, universal health care for an entire population can be financed from a pool to which many parties - employees, employers, and the state - have contributed."
Slight variations of this definition have been used on different websites, as seen here. You'll notice that this definition doesn't address who is the "single payer." We'll get to other definitions below, but first let's look at the Medicare program to answer the question:
Is Medicare a "single-payer" system?
As discussed above, Medicare is a health insurance policy for people above 65. The program also covers qualified people under 65 who have certain disabilities or have an End-Stage Renal Disease (ESRD). The public insurance is divided into four parts:
- Part A - Hospital Insurance
- Part B - Medical Insurance
- Part C - Advantage Plan (for vision, hearing, and dental among others)
- Part D - Prescription Drug Coverage
Since I'm comparing Medicare with the Canadian system, I'll focus my discussion on Parts A and B, which are also the two primary components covered by the public health insurance up north.
The main characteristics of Part A are as follows (taken directly from the Medicare.gov website):
- "Medicare Part A (Hospital Insurance) pays for inpatient hospital stays, skilled nursing facility care, and some home health care. No premiums if the person (or the spouse) has over 40 quarters of Medicare-covered employment. (There is a prorated monthly premium, however, if the person does not complete the 40 quarters.)"
- "Medicare Part A pays all covered hospital, skilled nursing facility and home health care benefits for each benefit period except for the deductible. For 2011, the deductible is $1,132 for any hospital stay 60 days long or less. For any hospital stay lasting longer than 60 days, a Medicare copayment will apply. For stays lasting 61 to 90 days, you will have to pay a Medicare copayment of $283 per day. For stays of 91 to 150 days, you will have to pay $566 per day. For any hospital stay that lasts longer than 150 days within a single benefit period, you will be required to pay the full cost for each day after the 150th day. For people on Medicare who receive care in a skilled nursing facility, a Medicare copayment of $141.50 per day will apply to days 21 through 100. Medicare will cover days 1 through 20 in full. You will be required to pay in full any days after the 100th day."
The key characteristics for Part B are:
- "Medicare Part B (Medical Insurance) pays for physician services, outpatient hospital services, certain home health services, and durable medical equipment. Monthly premiums vary from $4.90 to $161.50 (or more) depending on annual household income."
- "Medicare Part B includes a yearly deductible of $162 in 2011. This deductible will be applied to health care costs that involve physician services, outpatient hospital services, certain home health services, and durable medical equipment. Once the deductible is met, you will be required to pay only 20% of the Medicare-approved amount charged by providers for your health care services. In 2011, because of the new health care law, many preventive services will be provided at no cost to you. These free benefits will not be affected by the deductible."
I'm not sure about you, but I think a patient who paid taxes (or pay premiums for Part B) to get medical coverage after turning 65 certainly has to pay a lot of money for a hospital stay or outpatient hospital services. Both parts actually have very high deductibles, copays and coinsurances (the 20% described above). As a bonus, Medicare won't pay anything if you stay too long in the hospital. Good luck if you end up in a coma...
Based on what we've seen so far, the payment structure can be illustrated in the following chart: