The detail that could make Medicare for All generous — and expensive
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Now that the Democrats have taken control of the House, their "Medicare for All" proposals are going to get hearings and scrutiny. One feature of Bernie Sanders' version that hasn't gotten a lot of attention yet, but it will: the plan has no deductibles or other forms of patient cost-sharing.
Why it matters: In a country where so many Americans are bedeviled by medical bills, especially people who are sick and use a lot of medical care, this would be a big deal. It would actually make our system more generous than any of the other developed nations that Democrats like to cite as models for our own.
Details: It may be surprising, but no other developed nation has zero out of pocket costs — even those that treat health care as a basic human right, as Medicare for All supporters want to do. That’s because their national health plans have cost-sharing, or allow people to purchase health care outside the plan, or both.
- Even in the United Kingdom’s very comprehensive National Health Service, there are copays for some drugs and consumers pay a substantial amount for long term care.
- As the chart shows, consumers in other high-income countries spent an average of $857 per person out-of-pocket on health care in 2016, ranging from $467 in France to $2,326 in Switzerland.
Two proposed national health plans — Sanders’ plan and a similar plan in the House now sponsored by Rep. Pramila Jayapal of Washington state — have no cost-sharing for covered services. (Details regarding exactly which benefits these plans would cover are still evolving, so patients could end up with some out-of-pocket costs for non-covered services.)
- Other congressional proposals that would expand access to Medicare or Medicaid have various cost sharing arrangements based on the Affordable Care Act, Medicare, or cost sharing levels set by states.
The big picture: Deductibles and other forms of cost sharing have been rising steadily in private coverage, far outpacing wage growth. The Sanders cost sharing strategy could make the proposal more popular to the more than 150 million Americans who would have to switch from their private coverage to join a national plan.
- It will certainly appeal to the one third of people in fair or poor health, with insurance, who had trouble paying for health care in 2017.
The catch: A zero cost sharing approach is also sure to make any Medicare for All plan more expensive — because if the patients aren't paying for any of the costs, the government has to pick up the entire bill.
- It will also subject any plan to the inevitable criticism that it will lead to overuse of medical care and drive up health spending, since there wouldn't be any incentive for patients to worry about costs.
- All of this will draw new attention to the price tag of the plan. (Sanders says it would still be less expensive than our current system because it would get rid of bureaucracy and administrative costs.)
What to watch: House Speaker Nancy Pelosi has said that hearings may begin soon in the House on Medicare for All, but we are far from the stage where legislative sponsors have had to make significant compromises in order to get a bill passed.
If and when the debate gets to that point, it seems likely that there would end up being a modest level of cost sharing to deter unnecessary use of medical care and keep the overall costs of the plan down.
No doubt cost-sharing would be kept lower than it generally is today, both as a selling point and to eliminate the barriers to care and economic burdens high cost-sharing has become today for many families. It is also possible that enrollees would be allowed to buy additional care outside of the plan, as they can in some other countries.
The bottom line: There will be plenty of other arguments, for and against a Medicare for All-style plan. But the burden of rising out-of-pocket costs is one reason the plan could have appeal for many Americans — even if it's not possible to get rid of them completely.
