Apr 22, 2019 - Health

How "Medicare for All" would affect hospitals

Kirsten Gillibrand ans Bernie Sanders standing behind a medicare for all sign

Sens. Bernie Sanders and Kirsten Gillibrand introducing the "Medicare for All Act of 2019" in April. Photo: Tom Williams/CQ Roll Call via Getty Images

One of the most important questions regarding a "Medicare for All" system in which private insurance disappears is how hospitals would be paid. The answer has huge implications, the NYT reports.

The big picture: Private insurance pays much higher rates for the same services than Medicare does. Hospitals say that's because Medicare underpays, so they must make up the difference through private insurance.

  • If Medicare for All pays higher rates than Medicare currently does, the price tag of the program balloons. But if it leaves rates unchanged, the impact on hospitals would be drastic.

Between the lines: We're paying a ton for hospital care, and reducing these costs is part of the point of Medicare for All.

  • But hospitals' finances vary significantly, and some hospitals — especially struggling rural ones — would quickly be forced to close, experts told the NYT. Others would lay off workers or end less-profitable services like mental health care.

The bottom line: While the current system is unsustainable, evidenced by ballooning hospital costs, instituting Medicare rates across the board would cause massive disruption. How it'd play out is hard to predict and sure to become part of a fierce political debate.

Go deeper: How your health care would change under "Medicare for All"

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