So why can’t we all have Medicare? I’m not sure.
Because after you put everyone on Medicare, nobody would want it anymore.
Currently, a senior pays $135 a month for Medicare. They generally pay another $50–$100 for a Medigap policy so they’re protected against the stuff that Medicare doesn’t cover, but let’s leave that aside for a moment.
So, $135 a month. If I hop on to ehealthinsurance.com, I find that a plan with the equivalent coverage to Medicare will run me $1382 a month, minimum (I’m 62). So, the Medicare premium runs about a tenth of what the actuarial cost of the plan is; the government picks up 90% of the cost, and takes it out of the Medicare Trust Fund, which because of this disparity, is due to run out of money in 2028, after which benefits will get cut by some percentage (probably around 30%) meaning that plans will get substantially more expensive in some way (premiums rise drastically, deductibles rise drastically, copays rise drastically, whatever).
But wait, there’s more!
Medicare doesn’t cover the actual cost of your treatment as set by the provider. It pays doctors a set fee per service, and that fee is often well under the cost the doctor must charge to keep the lights on in their practice. So, they engage in a practice called “cost-shifting”, where they OVERcharge patients with private insurance to make up what Medicare, Medicaid, and the ACA don’t pay them.
Obviously, if there was Medicare-for-all, suddenly there would be no private plans to cost-shift to; premiums would be driven up even further.
How much? Hard to say. Halfway down this article, which called out Mrs. Clinton for some cost-shifting BS she tried to peddle in one of the debates, a discussion on cost-shifting occurs.
Estimates, however, seem to galvanize around 25–30%. So, Medicare-for-all premiums would go up by that amount as well.
So, in addition to the 30% that the system needs to stay solvent, you need ANOTHER 30% to cover the cost shift.
What’s that mean for each age group? Well, let’s do a costing for a 30 year old, a 45 year old, and a 60 year old, all premium plans with lower deductible and copays, much like private insurance and Medicare (and NOT like the ACA).
30 yr old male: @$500/mo +30% + 30% = $800 a month premium
45 yr old male: @650/mo premium +30%+30% = $1040 a month premium
60 yr old male: @1250/mo premium +30%+30% = $2000/month premium
Sound good to you? Or, do we maybe need to consider a different payment model that does a better job of cost control?
And, of course, we still have to cough up the 3.2% payroll tax that pays for Medicare (that’s 1.6% that comes out of our paycheck, and the 1.6% that your employer lowers your wage by so he/she can pay their part of the tax).
