Medicare For All, Explained

You’ve heard this term being thrown around by politicians and presidential candidates – find out what it really means and how it works.
Senate Democrats introduce the Medicare For All Act of 2017 - September 13, 2017

Senate Democrats introduce the Medicare For All Act of 2017 – September 13, 2017

People who live in the United States spend more on healthcare per capita than any other civilized country in the world. Studies indicate that there’s wide national support for a government-issued healthcare program, but is that program Medicare for All?

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What is Medicare for All?

“Medicare for All” (M4A) is the concept of taking the federal health insurance program known as Medicare and expanding it so that it covers Americans of all ages. Under Medicare for All, basic health needs like doctor visits and prescription drugs would automatically be covered.

Politicians use the phrase “Medicare for All” as a colloquial way of relaying their plans for universal health care. Even though there are several versions of “Medicare for All” currently going around, and each contains key differences, here are some of the foundational tenets underlying all of them:

  • Health care will be paid for by the government & funded through taxes.
  • The role of private insurers will be relegated to supplemental coverage, if not totally eliminated.
  • 100% of Americans will be given health insurance.

How does Medicare for All work?

At a general level, the way Medicare for All will work is by instead of picking private health insurance plans through an employer or health exchanges, Medicare for All will cover all out of pocket expenses for basic health needs, and, in return, Americans will pay more in taxes.

However, because “Medicare for All” is a concept and not a specific piece of legislation, how it works differs depending on who you ask.

Below is a brief explanation for how some of the most popular “Medicare for All” plans would work:

Bernie Sanders’ “Medicare for All Act of 2017”

How does the Medicare for All Act of 2017 work and what are the benefits?

The first and most important aspect of Sanders’ plan is that it would totally eliminate private insurance through your workplace, as well as the individual market, which currently covers around 156 million people. Instead, everyone – including those who currently receive Medicare and Medicaid – would be covered by an expanded version of medicare. This new version of medicare would now provide additional care such as vision and dental, long term care, and even abortion, and would take 4 years to reach full coverage. What’s more, is that you will no longer have to pay premiums or deductibles.

How much will the Medicare for All Act of 2017 cost?

According to the Mercatus Center at George Mason University, Bernie Sanders’ Medicare for All plan would cost $32.6 trillion over 10 years or $3.2 trillion a year in federal spending. This number was echoed by the Urban Institute which predicted that “federal expenditures would increase by $32 trillion” over that same period of time.

Who will pay for it?

To pay for his Medicare for All plan, Sanders’ has provided the following means as potential sources of funding:

  • 7.5% income-based premium paid for by businesses. In this scenario, employers responsible for more than $2 million in payroll would be required to pay a 7.5% payroll tax.
  • 4% income-based premium paid by households. Families making over a certain amount would be required to pay a 4% income-based premium.
  • Progressive income tax rates. This solution is comprised of strengthening progressive income tax rates, taxing capital gains and dividends the same as earned income, and limiting tax deductions for the wealthy.
  • Making estate taxes more progressive. As of today, the estate tax only applies to the wealthiest 0.2% of Americans. Under Sanders’ plan only the first $3.5 million of a single person’s estate and the first $7 million of a married couple’s estate would be exempt.
  • A wealth tax on the top 0.1% percent. This option would place a 1% federal wealth tax on households with a net worth exceeding $21 million.

For more of Sanders’ plans for funding, you can check out his website.

Kamala Harris’ Medicare for All plan

How does Kamala Harris’ Medicare for All plan work and what are the benefits?

Kamala Harris’s Medicare for All plan will “cover all medically necessary services.” These services would include a majority of what was proposed in Sanders’ plan; visits to the doctor, vision, dental, medical devices, and reproductive care. It would also allow the Secretary of Health and Human Services to negotiate lower drug prices. Additionally, Harris makes it a point to mention expanded mental health coverage that would include innovative solutions such as telehealth.

Harris’ plan promises a 10-year-phase-in period. This phase-in period would work by first automatically enrolling all newborns and uninsured individuals into the new Medicare program, then “provide a commonsense path” for everyone else to transition. The details of how this transition would work remain unclear.

Where Harris’ plan most poignantly diverges from Sanders’, is what will become of private insurers. Under Harris’ plan, private insurers will be allowed to offer their own Medicare plans, providing they meet stringent standards regarding cost and benefits.

How much will Kamala Harris’ Medicare for All plan cost?

Because of how similar Harris’ plan is to Sanders’ one can assume that the $32 trillion dollar figure estimated by the Mercatus Center at George Mason University and Urban Institute would remain more or less the same. However, in her plan, Harris cites a report by over 200 economists that claims by not switching to a universal healthcare system the American people will actually end up paying more in the long run.

Who will pay for it?

Harris’ plan to pay for her Medicare for All plan adopts all of Sanders’ funding sources except the 4% income-based premium paid for by households making over $29,000 a year. Instead, Harris’ plan would raise the minimum threshold from $29,000 a year to $100,000 a year – or higher depending on how high the cost of living is where you live. To make up for the difference lost by raising the threshold, Harris would levy a 0.2% tax on stock trades, a 0.1% tax on bonds, and a 0.002% tax on derivative transactions.

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The House Medicare for All Bill.

How does the House Medicare for All Bill work and what are the benefits?

Introduced by Rep. Pramila Jayapal (D-WA) with 106 cosponsors, the Medicare for All Act of 2019 would transform our existing healthcare system into a single-payer system with extremely generous benefits. This bill would put healthcare exclusively into the hands of the federal government within two years of its passing – two years faster than Bernie’s plan. Every form of private health care would be reduced to only covering what the single-payer system failed to, and traditional Medicare and Medicaid would no longer exist. In fact, the only two government health care institutions – excluding the new federally mandated single-payer system – allowed to remain would be Veterans Affairs, known as the VA, and the Indian Health Services. Finally, out-of-pocket spending would be completely eliminated, with the exception of prescription drugs.

How much will the House Medicare for All Bill cost?

Unlike Sanders’ plan, the Medicare for All Act of 2017, the House’s Medicare for All bill hasn’t had any studies done that estimate how much it would ultimately cost the country. However, due to the plans’ similarities, we can assume a similar cost of over $3 trillion a year.

Who will pay for it?

When asked how this plan would be funded, Jayapal is quoted as saying “Most bills don’t have that when they’re introduced, that comes later in the process. I actually think the question is not about how we pay for it, the question is where is the will to make sure every American has the health care they deserve and have a right.” This is the only plan that lacks a preemptive funding strategy.

The Medicare For America Act.

How does Medicare For America Act work and what are the benefits?

The Medicare For America Act (MFA), would automatically enroll those currently receiving Medicare, Medicaid, CHIP, insurance on the individual market, and individuals who are uninsured. Unlike other Medicare for All plans, the MFA would allow employer-sponsored coverage that meets gold-level coverage to stay intact. Benefits under the Medicare For America Act would include covering prescription drugs, dental and vision, and certain medical devices. Additionally, the MFA covers long-term support and services for Americans living with disabilities and seniors.

How much will Medicare For America Act cost?

According to the bill, premiums will not exceed more than 9.69% of an individual’s or household’s monthly income. Those living in poverty will pay nothing.

Who will pay for it?

To pay for Medicare for America, the bill would do the following:

  • Allow the Republican tax bill to expire.
  • Levy a 5% surtax on adjusted gross income above $500,000 – including on capital gains.
  • Increase the Medicare payroll tax and the net investment income tax.
  • Increase excise taxes on all tobacco products, beer, wine, liquor, and sugar-sweetened drinks.

What does M4A mean for private insurance?

Under a Medicare for All system, the private healthcare industry as know it would cease to exist. In the majority of plans, private insurance companies would transition from their current leading role in covering the costs of basic healthcare needs to one that’s been consigned to supplemental coverage – like cosmetic surgeries. In other M4A plans, such as Kamala Harris’, private insurers could still provide basic healthcare needs, but only if they worked within the new Medicare for All framework. Almost all Medicare for All plans do away with employer-sponsored coverage.

Can I keep my existing coverage under a Medicare for All system?

The short answer is ‘No’. Every version of Medicare for All will spell change for your coverage. For those who are already on Medicare or Medicaid, your existing coverage will expand and get better. For those who belong to employer-sponsored plans, your coverage may not change immediately, but within a few years, you’ll be transitioned onto the government plan. Alternatively, for people who currently receive no coverage, or are underinsured, you’ll likely see a change in coverage immediately.

Presidential candidates who currently support M4A

Bernie Sanders, Cory Booker, Kamala Harris, Tim Ryan, Elizabeth Warren, Kirsten Gillibrand, and Tulsi Gabbard.

The Rantt Rundown.

What M4A is, how it works, and what it will cost are widely debated subjects that are ever-evolving. As of now, Medicare for All is only a concept, but there are five major plans leading the conversation on it into 2020. And should a Democratic candidate emerge victorious in the 2020 election, one of these concepts could become your reality.

Healthcare // Bernie Sanders / Healthcare / Kamala Harris / medicare for all / Medicare for America