People Don’t Know What ‘Medicare For All’ Means. Democrats Want It That Way.

Next week, Democrats will convene their second round of presidential debates. As during last month’s debate, health care is sure to be a focus.

The candidates have sharpened their differences on the issue in recent days. Frontrunner Joe Biden released his vision for health reform—a sort of Obamacare on steroids—last week. He went to great pains to emphasize that people would be able to keep their private insurance under his plan. “If you like your health care plan, your employer-based plan, you can keep it,” he said.

Senator Bernie Sanders continues to beat the drum for Medicare for All—a government takeover of the country’s health insurance sector. “At the end of the day, you’ve either got to be on the side of the people or the side of the health insurance companies,” he said. “I know which side I’m on.”

Polling data seem to indicate that only Democrats with a political death wish will get behind Medicare for All. Once voters learn what Sanders-style health reform entails, support for it plummets.

Let’s look at three things most of the public believes about Medicare for All: that they’ll be able to keep their private health plans, that doctors and hospitals will be paid enough to stay in business, and that ordinary Americans will save lots of money.

None is true.

Take the first—that Medicare for All will coexist with private health insurance. A recent Kaiser Family Foundation poll found that 55% of Americans believe they’ll be able to keep their plans under Medicare for All. Sixty-eight percent of Democrats say workers would be allowed to keep their private employer-sponsored plans; 65%  think those with individual-market coverage could do the same.

But the plan Sanders has introduced in the Senate is clear—it would be, “unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act.” And because Medicare for All would cover just about every medical service known to man, private health insurance would effectively become illegal.

Everyone who has a private plan—whether through work, or one they bought on the individual market, or a plan their unions negotiated on their behalf—would lose it. So too would the 22 million retirees with Medicare Advantage plans. Only those who receive their health care through the Veterans Health Administration or the Indian Health Service would be able to keep their pre-Medicare for All coverage.

Or consider the second big misperception—that doctors and hospitals will be paid adequately. The Kaiser poll found that 58% of Democrats and half of independents were unaware that doctors and hospitals would be paid less under Medicare for All.

The plan’s architects claim it will provide comprehensive, first-dollar coverage to everyone residing in the United States—including undocumented immigrants—and still cut national health spending by trillions of dollars. The only way to do that without directing virtually the entire federal budget toward health care is to pay providers less. Reimbursements for doctors and hospitals under the Sanders plan would be roughly 40% less than what private insurance pays.

Those kinds of pay cuts would be catastrophic. Hospitals would lose up to $151 billion in annual revenues under Medicare for All, according to an article published in the Journal of the American Medical Association.

Paying doctors less would also exacerbate the existing physician shortage. The United States is projected to be short more than 120,000 doctors by 2032, according to the Association of American Medical Colleges. That shortage would balloon further under Medicare for All. Some older doctors would probably prefer to retire than work for lower pay. America’s best and brightest students, meanwhile, would decline to pursue careers in medicine, if they’d be looking at long hours and low pay.

Finally, there’s the notion that Medicare for All will save everyone money. It’s a big part of Senator Sanders’s sales pitch. “People who have healthcare on the Medicare for All will have no premiums, no deductibles, no co-payments, no out-of-pocket expenses,” he said during last month’s Democratic presidential debate. “Yes, they will pay more taxes but less in healthcare for what they get.”

“More taxes” will certainly be needed to cover the plan’s cost—between $30 trillion and $40 trillion over ten years, according to estimates Sanders released last week.

Among those taxes? A new payroll tax on employers, new taxes on individuals, and higher taxes on investment income. An analysis of the tax plan Sanders advanced during his last bid for president, which has a lot in common with the ideas he’s proposed for paying for Medicare for All this time around, estimated that average post-tax income for all taxpayers would fall by about 12.84%, when factoring in reduced GDP as well.

Families today have some measure of control over their own health costs under the current system—they can opt for cheaper health plans, or shop around for lower-cost services. But they’d lose any measure of control over their health expenditures under Medicare for All. They’d have no choice but to pay whatever taxes the government socks them with.

Medicare for All may play well in the Democratic primary. But it’ll be a liability during the general election, when health care promises to be among the most important issues for voters. At next week’s presidential debate, we’ll see if Democrats can get wise to that reality.

Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. 

Read more

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top