Medicare is health insurance for people aged 65 and older, as well as some younger people with certain medical conditions.
Some members of Congress and a portion of the United States’ populace are interested in changing the country’s current healthcare system to one that would provide coverage for most residents, including those under 65.
If this happened, the new system could be called “Medicare for All” or single payer healthcare.
Below, we discuss the meaning of Medicare, Medicare for All, single payer, and universal healthcare. We also look at the pros and cons.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare is a health insurance program in the U.S. that covers three groups of people:
- individuals who are age 65 and older
- younger people who have certain disabilities
- individuals with end stage renal disease who need a kidney transplant or dialysis
There are several parts to Medicare. Original Medicare consists of Part A, hospitalization insurance, and Part B, medical insurance. A person with original Medicare is eligible to get prescription drug coverage through Part D.
If someone with Medicare needs help in paying deductibles, copays, and coinsurance, they are also eligible to get Medigap, which helps with these costs.
There are also alternatives called Medicare Advantage, which offer the same benefits as original Medicare, in addition to prescription drug coverage and dental and vision care.
Single payer refers to a healthcare system in which the government alone pays. The term “Medicare for All” means the same thing. In this case, the two terms are interchangeable.
In the broader sense of the term, single payer means healthcare that a government finances, but not necessarily the American government.
Some other countries have a single payer system that is not Medicare. For instance, the United Kingdom has a single payer system under a different name, the National Health Service or NHS.
Single payer vs. multiple payer
Single payer is a healthcare system that one entity finances. In most cases, this entity is the government. In the single payer system, the government pays for medical services using money that comes from taxes.
However, the government does not employ doctors and other healthcare providers. In other words, it does not own or operate the system. Instead, it merely pays the bills.
In a single payer system, there might be intermediaries between the government and healthcare providers.
An example of this type of relationship is Medicare Advantage, where private health insurance companies serve as intermediaries between the government, Medicare, and doctors and hospitals.
Multiple payer is a healthcare system that more than one entity finances. It involves private insurance companies and may include the government.
Currently, the U.S. uses a multiple payer system. Funds for healthcare come from beneficiaries, employers, and the government.
Single payer vs. universal healthcare
Universal healthcare means all people who live in a particular area have health insurance coverage. This requires a government ruling.
However, universal healthcare could come from a single payer system, multiple payer system, or a system that is a mixture of both single and multiple payer.
With this in mind, universal healthcare and single payer are not interchangeable terms. In some cases, universal healthcare could be a single payer system, but this would not be true in every case.
The main benefit of the single payer system is the provision of health insurance for many people who do not have it.
In an average month in 2018, approximately 29 million Americans under age 65 had no health insurance, notes the Congress of the U.S. Congressional Budget Office.
A single payer system could greatly lower this number, but the exact reduction would depend on the system’s design.
For instance, people who are not citizens but lawfully reside in the country might not be eligible.
Experts have also noted that, despite paying more for health care than other comparable countries, the people in the U.S. have a lower life expectancy and score lower on many other health measures.
The high price of the current healthcare system comes, in part, from its complexity, lack of price control, and administrative costs.
Depending on the system, the possible downsides of single payer healthcare include:
Possibility of higher taxes
One of the possible barriers to a single payer or Medicare for All system is the reluctance to pay higher taxes rather than having employers pay for health insurance.
While many models find that individuals could say money, voters tend to be concerned about high cost to taxpayers.
Some of the significant stakeholders in the current U.S. healthcare system could have losses if the country were to transition to a single payer system.
These stakeholders include health insurance companies and pharmaceutical companies, who are significant lobbyists in government.
Medicare is a healthcare system for people who are aged 65 and older and for younger individuals with certain disabilities.
Transforming the country’s multiple payer system to a single payer or Medicare for All system would mean the government would pay for healthcare for everyone, not just older people.
The main pro of single payer is that many people who do not have health insurance would get coverage. Despite this benefit, many people believe that a Medicare for All system would come with financial drawbacks.
The debate over the pros and cons will likely continue for some time.