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OpEdNews Op Eds    H2'ed 11/20/19

The Real Deal with Medicare for All

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From Robert Reich Blog

Republicans and even some Democrats are out to scare you about Medicare for All. They say it's going to dismantle health care as we know it and it will cost way too much.

Rubbish.

The typical American family now spends $6,000 on health insurance premiums each year. Add in the co-payments and deductibles that doctors, hospitals, and drug companies also charge you plus typical out-of-pocket expenses for pharmaceuticals and that typical family's health bill is $6,800.

But that's not all, because some of the taxes you now pay are for health insurance, too for Medicare and Medicaid and for the Affordable Care Act. So let's add them in, again for the typical American household. That comes to a whopping $8,975 a year. Oh, and this number is expected to rise in the coming years.

Not a pretty picture. If you're a typical American, you're already paying far more for health insurance than people in any other advanced country.

And you're not getting your money's worth. The United States ranks near the bottom for life span and infant mortality. Or maybe you're one of the 30 million Americans who don't have any health insurance coverage at all.

You see, a big reason we pay so much for health insurance is the administrative costs involved in private for-profit insurance. About a third of what you pay goes to the people who oversee billing and collections. And then of course there are the marketing and advertising expenses, and the profits that go to shareholders or private-equity managers.

What happens if we have Medicare for All?

Let's first consider a limited version that keeps private insurance as proposed by candidates including Joe Biden, Pete Buttigieg, and Kamala Harris. The insurance costs remain the same because it's the same private insurers and the same co-payments and deductibles. The only difference is more of this would be paid through your taxes, rather than by you directly, because the government would reimburse the insurance companies.

This could help bring down costs by giving the government more bargaining leverage to get better prices. But we don't know yet how much.

Now, let's talk about a different version of Medicare for All that replaces private for-profit health insurance, as proposed by Bernie Sanders and Elizabeth Warren. In this version, total costs including a possible combination of premiums, co-payments, deductibles, or taxes are even lower. This option is far cheaper because it doesn't have all those administrative expenses. It's public insurance that reimburses hospitals, doctors, and pharmaceutical companies directly and eliminates the bloat of private insurance companies.

Economists at the University of Massachusetts-Amherst say Medicare for All that replaces private for-profit insurance would reduce costs by about 10 percent, mostly from lower administrative and drug costs. The Urban Institute estimates that households and businesses would save about $21.9 trillion over 10 years, and state and local governments would save $4.1 trillion.

You'd pay for it through a combination of premiums, fees, and taxes, but your overall costs would go way down. So you'd come out ahead. And everyone would be covered.

You'd keep your same doctor or other health-care provider. And you could still buy private insurance to supplement Medicare for All, just like some people currently buy private insurance to supplement Medicare and Social Security. The only thing that's changed is you no longer pay the private for-profit corporate insurers.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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