“Medicare for All” – 8 Things You Should Know

“Medicare for All” – 8 Things You Should Know

As Presidential candidates from both sides ramp up their campaigns in preparation for the 2020 election, healthcare is positioned high on most agendas. With politicians throwing around terminology such as “Medicare for All”, “Public Option”, “Single Payer”, and “Socialized Medicine”, distinguishing the differences between each can seem daunting.

To start with, let’s be clear on the fact that healthcare and health insurance are not the same thing, even though people, including politicians, often use the terms interchangeably.

Healthcare is the maintenance or improvement of health via the prevention, diagnosis, and treatment of disease, illness, injury, and other physical and mental impairments in people.

Health insurance is simply a mechanism for financing healthcare.

Deciding who should have access to healthcare, and determining how to finance it represent a philosophy and a strategy that lie at the heart of every argument ever made around healthcare.

In Part one of this two-part series I examine the various healthcare models frequently referenced in the news, and list the factual, distinguishing characteristics of each.

1. Medicare

Senator Bernie Sanders of Vermont has used the term “Medicare for All” to capture his vision of improved healthcare in America. Before we can understand “Medicare for All” we have to first understand “Medicare”.

As citizens of the United States, we pay into Medicare our entire working lives and in return we gain “access” to “free” healthcare at age 65 – although not truly “free” because we’ve financed it ourselves. The Federal government uses our Medicare premiums to pay for the healthcare services we receive under the program, reimbursing physicians according to a set fee schedule.

Healthcare services under Medicare are delivered by private healthcare providers who are willing to accept the Federal reimbursement rate for their services, typically much less than what they would bill privately for those same services.

1. Healthcare Philosophy:
Assured healthcare for the disabled and elderly persons aged 65+.

2. Financing Strategy:
Funded by mandatory unique payroll deduction (Medicare premiums)

3. Who has access to healthcare under this system and when?
All legal residents who are either totally disabled, or age 65+.

4. Who pays the claims?
The Federal Government is the primary insurer paying the claims.

5. Cost Control Mechanisms:
Claims submitted by healthcare providers are paid according to a set fee schedule set by the Federal Government.

6. Can private insurers participate?
Yes. Private insurers are allowed to sell supplementary policies to cover anything the Federal plan doesn’t cover.

7. Are healthcare providers, doctors and hospitals delivering the services employees of the government?
No

8. Country That Employs This System:
United States

2. Single Payer (a.k.a. “Medicare for All”; “National Healthcare”)

“Single-payer”, often called “Medicare for All” or sometimes “Nationalized Healthcare” is a more general term used to describe a healthcare payment strategy. Single payer is a government operated health insurance system typically financed by taxes and/or a combination of taxes and unique payroll deductions in which the Federal government behaves as the “single payer” of healthcare claims.

1. Healthcare Philosophy:
Assured healthcare for all citizens & legal residents.

2. Financing Strategy:
Funded by tax revenue and also mandatory unique payroll deduction.

3. Who has access to healthcare under this system and when?
Citizens at birth or the point at which legal residence is established; the biggest distinguishing factors between Medicare and “Medicare for All” relates to who has access to the subsidized healthcare and when.

4. Who pays the claims?
The Federal Government is the primary insurer paying the claims.

5. Cost Control Mechanisms:
Claims submitted by healthcare providers are paid according to a set fee schedule set by the Federal Government.

6. Can private insurers participate?
Yes. Private insurers are allowed to sell supplementary policies to cover anything the Federal plan doesn’t cover.

7. Are healthcare providers, doctors and hospitals delivering the services employees of the government?
No.

8. Country That Employs This System:
Canada. However Canada’s single payer system is not as generous as the version being proposed by Bernie Sanders. Under the Canadian system, preventative care, basic office visits, diagnostics and hospitalization are covered but vision, dental & prescription medications are not.

As such, nearly 70% of Canadians purchase supplemental insurance either directly through private insurers or through their employers.

Under Bernie Sander’s proposed single-payer system, all residents of the U.S. would be covered for all medically necessary services, including doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs.

Healthcare services would still be delivered by private healthcare providers but private insurance companies wouldn’t be allowed to participate under Bernie’s proposed plan.

3. Universal Healthcare

With universal coverage, all individuals receive access to healthcare services, including preventative, emergency and palliative care, without it becoming a financial hardship. With this type of plan, coverage is provided by different entities. For example, residents can choose from a pool of insurance companies to pay for their healthcare.

1. Healthcare Philosophy:
Assured healthcare for all citizens and legal residents.

2. Financing Strategy:
Funded by tax revenue and mandatory unique payroll deduction

3. Who has access to healthcare under this system and when?
Citizens at birth or the point at which legal residence is established

4. Who pays the claims?
The Federal Government is the primary insurer paying the claims.

5. Cost Control Mechanisms:
Claims submitted by healthcare providers are paid according to a set fee schedule set by the Federal Government.

6. Can private insurers participate?
Yes

7. Are healthcare providers, doctors and hospitals delivering the services employees of the government?
No.

8. Example of Country That Employs This System:
Germany is an example of a true, Universal Healthcare system, whereas Canada in comparison is a hybrid with characteristics of both single payer and universal coverage.

The German system provides universal coverage through two insurance premium-funded systems: a taxation-funded, Social Health Insurance system for all Germans and a Private Health Insurance system that is an option for high-income and self-employed Germans.

If you’ve heard politicians talk about a “Public Option” when it comes to healthcare, the German system is similar to what’s being envisioned. Ironically, this two-tiered system is the one most Canadians would prefer and for which a growing number continue to advocate.

4. Socialized Medicine

The term “socialized medicine” is often misused to reference any government involvement in healthcare. However, in its purest form, a socialized system is one in which the government not only finances healthcare, but also manages hospitals and employs medical providers directly.

1. Healthcare Philosophy:
Assured healthcare for all citizens and legal residents

2. Financing Strategy:
Funded by tax revenue

3. Who has access to the program and when?
Citizens at birth or the point at which legal residence is established

4. Who pays the claims?
The Federal Government is the primary insurer paying the claims.

5. Cost Control Mechanisms:
Claims submitted by healthcare providers are paid according to a set fee schedule set by the Federal Government.

6. Can private insurers participate?
No

7. Are healthcare providers, doctors and hospitals delivering the services employees of the government?
Yes

8. Example of Country That Employs This System:
Britain’s National Health Service is an example of a socialized system where doctors are employed by the government.

The United States has its own socialized system for military veterans. Veterans Affairs owns hospitals, employs doctors, nurses and other medical professionals and negotiates directly with pharmaceutical companies for drugs.

 

In Part 2: As a prior resident of Canada and private health insurance professional in that country for many years, I’ll explain the impact of government cost containment tactics can have on the quality of care in single payer models. Further, I’ll examine the unique features of our employer-sponsored system here in the U.S. and make my own suggestions of where we need to focus going into 2020.

Author
Joanna Morrow

Joanna Morrow is an employer consultant and advocate who has worked in the employee benefits industry for over two decades. She works diligently to help employers overcome obstacles in their business by sharing her expertise in Human Resources, Benefits & Compensation, Process Mapping, Risk Management and ERISA/DOL/IRS compliance. She is a licensed life and health insurance professional in the State of Arizona and is an active member of the National Association of Health Underwriters (NAHU). Joanna is a senior partner at Arizona Benefit Consultants in Phoenix.

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