Many believe our health care system needs fixing. Would “Medicare for All” be the fix? “Medicare for All” would require the Medicare law to change to permit additional categories of beneficiaries. Antitrust laws, whose purpose is to facilitate “… economic liberty aimed at preserving free and unfettered competition as the rule of trade” will have to be applied to a monopoly for health care. Which is right for the U.S.?
Medicare isn’t cheap. According to the Kaiser Family Foundation a Medicare beneficiary spends $5,460 per year on health care annually. The Motley Fool’s average is $7,620. I spent $7,139 in 2019. That includes Medicare supplement plans I need (these supplements are provided by private insurance companies). I reviewed my bills for my care in 2019 and Medicare paid 0.9% of what was billed!
The amount billed may have been too high but the amount paid might have been too little for doctors to want to continue to treat me. It was difficult to learn what my supplements paid as they pay a percentage of Medicare approved amounts that Medicare didn’t pay. It wasn’t much greater than what Medicare paid. When I owned my business, employees and I may have paid over $350,000 (estimate) in Medicare payroll taxes. Today the tax rate is 2.9% of payroll shared between the employer and employee. So, Medicare isn’t cheap.
There are other concerns. There are 12 Medicare Administrative Contractor areas in the U.S., and contractors in the aggregate process 1.2 billion claims annually. Let us presume that a universal coverage/ one payer system was so popular that every person in the U.S. wanted it to be the answer to our health care problems. Let’s say for our purposes that such a system began January 1, 2021. But since our universal coverage/one payer system has done away with private insurance companies, where would medical providers send their bills on January 1 or December 31, 2020? Who would process the claims? What education/experience would they have? Where would they be located? What equipment would they be using (computers, phones, desks, etc.)? Who would figure this out and who would pay for it? I have a guess!!!
These are a few problems such a system would present. Before we get excited about a universal coverage/one payer system we should look at what is broken in order to fix it.
It’s easy to blame insurance companies, pharmaceutical companies and providers for charging too much and maybe they do but the system requires reviewing. For example, Medicare often pays the lower of cost or charges. Is this actually the least expensive way to reimburse providers? And what is meant by “cost”? Should providers be required to publish their charges? Would letting insurance companies cross state lines reduce insurance premiums? Should beneficiaries pay a percentage of the provider’s bill? Exactly where do our health care dollars go? These are a few of the questions that require answering so we have an idea of how to fix what is broken.
The point I am trying to make is that no system is perfect. But before we can improve it, we must analyze our system. It’s not good enough to say, “Well, we need to do something,” we must do something that has a chance of working.