As the 2020 election cycle heats up, we’ll be hearing much more about the various Medicare reforms that various candidates are touting. While Bernie Sanders’ Medicare for All is certainly the one that most people are familiar with, there are also several other proposals out there.
Many are wondering which one, if any, is likely to become a reality for America. Let’s look briefly at some of the bills and how they propose to change Medicare.
Medicare for All
Presidential candidate Bernie Sanders has been behind the Medicare for All movement since the last election. However, this time around he has more support via a number of co-sponsors in the Senate.
Of all the various Medicare proposals, this proposal would create the most sweeping change as it would essentially eliminate the private health insurance industry altogether. Employees would no longer get their health insurance through their employers but instead, the whole nation would be on Medicare.
This would be a single-payer health coverage system run by the federal government. It would offer coverage to anyone in the United States, even those who are not citizens.
Unlike current Medicare, which has both premiums and cost-sharing for beneficiaries as they use the coverage. Sanders supports a program in which everything about Medicare would be free. No premiums and no deductibles or copays or coinsurance. Taxpayers instead would foot the bill, so critics insist that there would be significant tax increases for all Americans.
The coverage would include preventive services, primary care, both hospital and inpatient care, prescription drugs, maternity care, and emergency care. It would also provide free coverage for both mental health care and substance abuse care.
In addition, it would cover several things that the current Medicare program does not, including dental, vision, hearing, and long-term care. This type of comprehensive national healthcare would eliminate the need for Medicare supplemental coverage.
Considering that Medicare doesn’t currently cover many of these things and current Medicare also requires significant premiums, some people find it hard to imagine a system in which Medicare would not only be significantly expanded but would also be suddenly free overnight, not just for the current 60 million beneficiaries, but for everyone living in the United States.
Many Congressmen have also expressed grave concern about whether this system would worsen the current doctor shortage as reimbursements for medical providers are considerably lower by Medicare than by private health insurance for the millions of people under age 65.
These concerns are why there have been these other proposals, which implement change, but it would be change that is less sweeping.
Medicare at 50
The Medicare at 50 Act is pretty much just what it sounds like. It would keep the Medicare program as is, but it would allow people to buy into Medicare at age 50 instead of having to wait until age 65.
This particular legislation is aimed at a group of people who sometimes find themselves without good access to affordable coverage: early retirees. People who lose their job at or after age 50 or who purposely decide to retire sooner than age 65 would finally have access to Medicare, which is considerably more affordable than individual ACA plans for many people.
This bill appeals to people who are nervous about how the nation would pay for the kind of sweeping change that Medicare for All would cause. The private health insurance system would continue to cover people under age 50, which means this bill would be less dramatic for providers because they would still be collecting higher reimbursements for younger patients.
Paying for the bill would perhaps be easier as well since the people age 50 – 64 would be choosing to buy-in at their own expense and people already on Medicare would continue to pay premiums and cost-sharing that they already pay now and which are necessary to pay for the Medicare program.
One interesting part of this legislation is that it would still allow people to qualify for the tax credits (based on lower income) that they can currently qualify for with the ACA plans.
Is it possible that such a bill would be a stepping-stone on the way to America implementing a single-payer system like Medicare for All eventually?
Perhaps. Time will tell. A prior similar type of program for Medicare at 55 never got anywhere in Congress, but when comparing Medicare at 50 against Medicare for All, many Congressman feel it would be easier to sell to the public and easier to implement.
Medicare for America
Two Democratic Congressmen have also proposed a bill for Medicare for America. This bill proposes a large government-run healthcare system that would replace both the existing federal government programs (such as Medicaid) as well as private insurance policies (such as the ACA plans). It would guarantee coverage via universal healthcare.
The bill differs from Medicare for All in that it does not propose to be free for everyone. People with higher incomes would pay substantially more than people with low incomes. However, it would cap premiums at 9.69% of an individual or family’s monthly income.
Individuals would have a $350 deductible with an annual out-of-pocket maximum of $3500 which families would have a $500 deductible with a $5000 out-of-pocket maximum.
The biggest difference between this plan and Sanders’ plan is that it would allow large employers to continue offering private coverage to employees. The employees could choose between enrolling in their employer coverage or opting for the public Medicare program.
In addition, the bill would not discontinue the current Medicare Advantage plans that about 30% of Medicare beneficiaries currently are enrolled in.
One part of the bill that will appeal to many people is that it would remove the ban on allowing the government to negotiate directly with pharmaceutical manufacturers to lower the costs of prescriptions under Medicare Part D.
Consider this bill as sort of falling in between Medicare at 50 and Medicare for All on the spectrum of change.
In April two other Democratic Senators introduced yet another potential healthcare act called Medicare X. This would be a public plan that would offer coverage to individuals, families and also small businesses.
It would introduce new lower-cost health insurance choices by creating competition. It would achieve this by offering Medicare as a choice on the exchange, initially starting with rural areas. By 2023, it would expand to all zip codes.
Essentially, the bill would use Medicare’s framework to provide better healthcare choices for people under 65 in rural areas where the health insurance market currently fails many Americans with a lack of affordable options. Individuals could choose between existing ACA options and Medicare.
It would also guarantee that people would pay no more than 13% of their income on healthcare premiums.
So, as you can see, we have a host of proposals for healthcare in America, and it will be interesting to watch what happens as the election cycle kicks into high gear. Let’s hope that Congress can finally begin working together to determine which programs are truly in the best interest of the public.
Would you like to stay tuned on Medicare changes between this year and 2020? Join our Medicare 6-Day Email Course to learn the basics of Medicare and also to be added to our email list so that you will always receive updates from Boomer Benefits on anything that is changing with Medicare.