Explainer: Single Payer vs Universal Coverage

Will Medicare-For-All mean every American has access to health care? 

In a previous post I discussed Medicare-For-All but didn’t go into the particulars. 

There are many different systems that can add up to universal coverage. Medicare-For-All is one of those ways. 

How Other Countries Do It

Many, many countries have universal health care. Almost all do it with the same few ingredients.

1. Government pays for basic health care for citizens who can’t afford it;

2. Compulsory coverage;

3. Funded by taxes, often paid by employers and employees; and

4. Those who can afford it pay for private insurance.

How the United States Does It Now

1. Medicaid.

2. Individual mandate in the Affordable Care Act/Obamacare.

3. Medicaid is technically paid by federal and state taxes you pay (if your state has state income tax) when you file your taxes. Medicare tax is paid as a percentage of your income in payroll tax, which you split with your employer. Most Americans who receive health care through their job usually pay a portion of it at every paycheck.

4. This happens rarely, most people with private insurance have it through an employer.

The reason the United States can’t manage full universal coverage is cost. Our health insurance costs an obscene amount compared to our nation’s actual health and wellness. (See my deep dive post on why health care is so expensive)

Single-Payer vs Multi- Payer

When you are talking about anything-payer, you are talking about only the funding source for the provision of health care. The single-payer in the single-payer discussion is the government. Multi-payer is then government and private insurance. 

As I touched on above, most other countries have multi-payer systems. Even countries known for their single-payer systems, such as England, actually have private insurance, though everyone is eligible to go to NHS. The rich, therefore, can pay to avoid wait times for care, or to get treatment unavailable within NHS.

Medicare vs Medicaid

Medicare is funded by a protected federal “account” (Al Gore would probably call it a lockbox) and provides very affordable care to those age 65 and older. Medicare does not cover prescription drugs. With pharmaceutical costs rising sharply, Congress passed legislation in 2003 to create Medicare Part D that helped seniors pay for medication. Many seniors also have a Medicare advantage plan that extends coverage to pay for things that are not covered under Medicare. Also important: reimbursements to care providers under Medicare can be lower than through private insurance, but are much higher than Medicaid.

Medicaid is the insurance plan for the poor, but just being poor is not enough to qualify. Over 60 million Americans are on Medicaid, including some disabled people, low income children and people with incomes below a certain level. Medicaid is financed through both states and the federal government. Techically this would make it a dual-payer system, but it is still government funded and thus is often lumped in with Medicare when talking and public health care options. Ironically, the majority of Medicaid recipients actually have private managed health care contracted out through their state’s Medicaid program. 

Medicaid reimburses care providers at a percentage of the fair and reasonable rate. This makes many providers reluctant to see Medicaid patients.

Dual eligibles are on both Medicare and Medicaid. These Americans cannot afford health care beyond what Medicare covers. Many times, seniors in nursing homes are paying for that care through Medicaid.

What Should the United States Do to Get to Universal Coverage?

We already have the health care system in place necessary to get to universal care. The reason it is not working is the cost of health care is too freaking high.

Unfortunately, I don’t think Medicare-For-All addresses this, but it could be a good first step to getting to 100% coverage. The problem, as I wrote in a prior post on Medicare-For-All, is that an incredible number of people would lose their job with Medicare-For-All, because their insurance company employer is going out of business. Access to Medicare, with its reputation as very high quality care, would likely move many with private insurance into Medicare.

And the problem of sky-high health care costs in America would not be addressed and could even get worse. Medicare is known for incredibly tiny co-pays, which is the opposite of cost sharing. However, I don’t think cost sharing would work in America because we already do it and it is bankrupting families with massive medical bills.

The Affordable Care Act has increased coverage through what is called a Medicaid expansion. However, Medicaid-For-All would not work unless again there was some way to improve reimbursements. Medicaid-For-All passed the Nevada legislature but was vetoed by the Governor earlier this year.

Medicaid-For-All would probably not result in a mass private insurance exodus. But the price of doing that would probably be difficulty in finding participating providers.

I think multi-payer is the best way to go, but with a few major changes.

1. All-payer rate setting

2. A mechanism to bring down pharmaceutical prices

3. Much more emphasis on prevention, exercise, nutrition and reducing non-evidenced-based care like back surgery where physical therapy is proven to be more effective.

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