Sens. Tim Kaine, D-Va., and Michael Bennet, D-Colo., recently unveiled their “Medicare X” proposal, which would create a public Medicare plan that anyone could purchase.
The idea’s supporters are framing it as a moderate counterpoint to “Medicare for all,” which would ban private insurance coverage and force everyone onto a new government-run plan. Medicare X, the argument goes, would just give people another healthcare option.
But Medicare X is far from moderate. It’s simply “Medicare for all” in slow motion.
The existing Medicare program is already in dire financial straits. This week, the program’s trustees announced that Medicare Part A, which covers hospital care, will be insolvent by 2026. Expanding Medicare to even more people would make the program’s finances worse.
Further, hospitals and doctors cannot afford to take on more patients paying Medicare’s rates. At present, Medicare’s payments to hospitals are about 87% of the cost of caring for the program’s beneficiaries. Providers depend on payments from private insurers to make up the difference. On average, private companies pay hospitals about 145% of their cost of care.
Medicare’s low payment rates to providers, and the fact that it’s comfortable running deficits, mean that it could price its plans well below private ones.
As people flock to cheaper Medicare X plans with lower provider reimbursement rates, hospitals will have to raise prices for private insurers to cover their costs. That will lead to higher private insurance premiums — and drive yet more people into Medicare X.
The cycle would repeat until Medicare X was the only option remaining on the insurance market. Hello, “Medicare for all” — which, in practice, will result in Medicare for None.