The Case Against Forced Medicare: Evidence Says Single Payer is Not the Best Policy
Medicare is the single most successful health care coverage program in America. It has near-universal participation by providers (few providers can afford not to see the patients who are likely to use the most care). It is a core part of the American social and generational compact. It has less complicated billing than most non-Medicare private insurance, and beneficiaries are, overall, satisfied with the quality of their coverage. While it’s got cost overrun problems - and the trust fund is ticking down fast - its costs are still better contained (and certainly lower) than most private market plans, due, famously, to Medicare’s low overhead.
So why shouldn’t everyone have it?
Three reasons: first, because not everyone has decided that it’s what they want. Second, the evidence actually does not suggest that strictly single-payer health care is the best option (nor, though, does it suggest the “free” market is). Lastly, the plans being suggested under the moniker of “Medicare for All” bear little resemblance to actual Medicare.
The truth is that Americans generally like their health insurance: whether it is in the non-Medicare private market or Medicare itself. A recent Gallup poll found that the percentage of people on private insurance plans who rated the quality of their care as excellent or good stood at 85%, six points higher than those on Medicare and Medicaid. Another survey found that Medicare satisfaction rate is at 75%.
The Gallup survey also found that while those with private plans outside Medicare rate the quality of care they receive more highly than do Medicare beneficiaries, only 70% of non-Medicare private plan participants are satisfied with their coverage, while 79% of Medicare beneficiaries are.
What is really interesting, however, is the revealing look inside Medicare. It is important to understand that current Medicare is not, in fact, a single-payer system. Not only does Medicare incorporate significant cost-sharing in line with that of private market insurance plans, Medicare also offers private insurance plans under the Medicare umbrella. Etched into law under Medicare Part C, these plans run by private companies are known as Medicare Advantage, and combine benefits provided by Medicare Part A (hospital insurance, usually free to Social Security recipients), Part B (outpatient care such as doctor visits, screenings, etc.), Part D (prescription drug coverage), and in some cases ancillary benefits like vision and dental coverage not provided by Medicare.
The difference between traditional Medicare and Medicare Advantage is quite obvious: traditional Medicare, which has an acceptance rate of 85% by doctors in major metropolitan areas, is much less bogged down with network restrictions, while Medicare Advantage plans with narrower networks provide ancillary benefits and lower out-of-pocket costs.
Given all this, as well as the ideological attachment to single-payer plans by “Medicare for All” evangelists, what would you think has greater beneficiary satisfaction rate, traditional Medicare or Medicare Advantage? It turns out that private plans have the edge: overall, Medicare Advantage plans have an 80% satisfaction rate, compared to 75% for Medicare overall (as noted above). Since about a third of Medicare beneficiaries are enrolled in Medicare Advantage plans, some easy statistical calculations yield that traditional Medicare has a satisfaction rate of around 72%.
It is worth mentioning that even those who choose traditional Medicare administered by the government cannot receive prescription drug benefits through the government. Beneficiaries enrolled in traditional Medicare can only obtain prescription drug coverage through a private insurer (with the exception of those who are dual-eligible for programs like the VA or Medicaid).
Then there are Medigap plans, also known as supplemental coverage. These plans - also all private insurance plans - cover what Medicare doesn’t, or help beneficiaries pay copays and deductibles.
Satisfaction with both Part D and Medigap plans outstrip those of traditional Medicare, and by a couple of notches. 85% of Part D plan participants are satisfied with their prescription drug coverage, and a whopping 94% of those with Medigap plans like those plans.
Bottom line, private plans under Medicare have a big lead in popularity over both traditional government-administered Medicare and non-Medicare private insurance.
Which brings us to the key policy reason that “Medicare for All” forced on everyone is a bad idea: highly regulated, closely monitored, private plans that provide government-defined benefits perform better than either government-run single-payer plans or left-to-their-own-devices private insurer benefits. I am afraid that means both left and right ideologues are wrong on health insurance (like they are on almost everything else): the best way to do health insurance is neither a fully government-run single-payer system nor a “free” unfettered market. It is a highly regulated market with government-defined benefits, cost controls, and a healthy range of choices within that framework.
In other words, Obamacare on steroids.
Of further note is the fact that despite the rhetoric of the proponents of forced Medicare about the universal health care models of other developed nations, not a single one has one that looks like what Bernie Sanders and Elizabeth Warren are proposing: coverage for essentially everything (primary care to deluxe care to long term care, medical to dental and vision) through one, single, national government payer. That simply is not the case anywhere in the world.
In France, everyone is required to buy health insurance (individual mandate) which are sold by private nonprofit funds, and that insurance covers, like Medicare, about 70-80% of costs. Most French citizens also have voluntary private insurance akin to Medigap. Switzerland’s plan most closely resembles Obamacare, with the country requiring everyone to buy insurance offered by private insurance companies under strong community rating and guaranteed issue provisions to keep premiums down. In Germany, private insurance is available. Singapore’s public insurance only covers primary care, leaving most other things to health savings accounts and private insurance. Israel has a highly subsidized nonprofit health insurance model in which health plans are mandated to provide coverage determined by the government.
Even in Canada, the system of the most fascination of US single-payer advocates, the public health insurance system does not cover prescription drugs, dental, or vision care - highly regulated private insurance takes care of those. And each of Canada’s provinces run their own public insurance system, rather than the federal government running a single system.
The world over, there is really no evidence that a single, centrally run, government-only payer health coverage system is a better alternative to highly regulated, effective choices in a market that combines both private and public plans. Indeed in the US’s own experiment with a mix of systems, the plans Americans seem to like the most are private plans with government-mandated benefits and strict cost and price controls.
Forcing a Medicare-only payment model for, in essence, everything in health care will not only be a huge shock to the system, it will be a jolt that, evidence would suggest, would work out worse than plans building on Obamacare through either Medicare or another public plan as an option for everyone, or allowing traditional Medicare as well as private plans under the Medicare umbrella to become available to everyone and bringing down cost through direct controls, price negotiations, competition, and subsidies.
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