Medicare for all?

The Medicare system in the United States currently covers the healthcare needs of people over the age of sixty-five. Various federal and state lawmakers have tried, mostly unsuccessfully, to create universal healthcare plans to cover all of the needs of all of the American people. The newest entrant is the Bernie Sanders plan, a tremendously generous attempt at providing free healthcare for all Americans.

What the plan does

Most socialist countries provide a certain level of coverage for its citizens but does not cover all healthcare costs. For example, the Canadian government covers hospital and doctor visits but doesn’t cover vision and dental care, home health services or rehabilitative care. The Netherlands has a similar program. Australia’s program is also similar, and it also requires patients to pay 15% of visits to specialist physicians. In Taiwan, all patients outside of the low-income population are charged a fee when they see a doctor.

The Sanders plan is a single-payer program, meaning the federal government, that covers all American healthcare costs. In contrast to other socialized countries, this ambitious plan means to exclude any payments for health costs outside of prescription drugs. No copays and all costs, from dental to rehabilitative, covered.

The current system in the United States is operated through private health insurers. Most employees have a plan through their jobs, and in those situations, they usually have a deductible, typically $1,000. Private workers pay for insurance individually. The Medicare system that covers seniors requires them to pay 20% of the cost of a doctor’s visit.

Pros of the new Universal Medicare plan

The main benefit of the program is full coverage and no out of pocket costs. No one would have to worry about being able to afford healthcare.

Another benefit is the streamlining of the healthcare payer system. Right now, with multiple insurers, insurance companies negotiate different prices for procedures that can span a large range. In a single payer system, each procedure would cost the same amount for all patients.

Patients and doctors also spend an inordinate amount of money paying for administrative costs that will be severely reduced with a single-payer system. Right now, doctors need to employ a staff to deal with all of the different insurance companies and follow all of their instructions for reimbursement.

Cons of the plan

With a system that completely covers hospital and doctor visits, there is a strong fear that patients might abuse this “freebie” and take unnecessary health care visits, driving up costs.

Even more, this generous system, outdoing other socialist programs, will cost a tremendous amount of money to operate.

This brings us to the main problem, which is how to fund such an operation. The Sanders plan doesn’t address this outright, and this is often the issue upon which such ambitious plans end up folding. The bill proposes several options, such as these:

• A 4% increase in income tax on an employee, above $29,000 for a family of four.
• A 7.5% increase on employer taxes above $2 million in payroll payments.
• Increasing federal marginal tax rates to 70% for people who earn more than $10 million.
• Increasing the estate tax rate to 77% for estates worth more than $1 billion.
• Creating a high tax for “extreme wealth.”
• Creating high fees for financial corporations.

Progressive systems generally tax the rich to pay for the poor, and this system seems likely to attempt to do the same.