Medicare for All

Rep. John Conyers (D-MI) again introduced his bill for “Medicare for All” establishing a single-payer healthcare insurance program for America. The bill this year has 37 co-sponsors which is 12 more than last year. Unlike the controversial Obamacare which requires participants to buy health insurance from the private for-profit insurance industry, Conyers’ Medicare-for-All eliminates the overhead and profits sucked down by the middlemen. The bill numbered  HR 676 is summarized below:

H.R. 676 establishes a unique American universal health insurance program with single-payer financing. The bill would create a publicly financed, privately delivered health care system that improves and expands the already existing Medicare program to all U.S. residents, and all residents living in U.S. territories. The goal of the legislation is to ensure that all Americans will have access, guaranteed by law, to the highest quality and most cost effective health care services regardless of their employment, income or health care status. In short, health care becomes a fundamental human right, with no financial barriers or financial harm resulting from seeking care. With 50 million uninsured Americans, and another 30 million who are underinsured, the time has come to change our inefficient and costly fragmented non-system of health care. The current for-profit health care system in the U.S. is not financially sustainable over the long run, hence the need for a unique nonprofit, universal single-payer health care system.

Who is eligible

Every person living or visiting in the United States and the U.S. Territories would receive a “Medicare For All Card” and ID number once they enroll at the appropriate location. Social Security numbers may not be used when assigning ID cards.

Health care services covered

This program will cover all medically necessary services, including primary care, medically approved diet and nutrition services, inpatient care, outpatient care, emergency care, prescription drugs, durable medical equipment, hearing services, long term care, palliative care, podiatric care, mental health services, dentistry, oral surgery, eye care, chiropractic, and substance abuse treatment. Patients have their choice of physicians, providers, hospitals, clinics, and practices. There are no co-pays or deductibles allowed under this act.

Conversion to a nonprofit health care system

Doctors, hospitals, and clinics will continue to operate as privately entities. However, they will be unable to issue stock. Private health insurers shall be prohibited under this act from selling coverage that duplicates the benefits of the Improved Medicare For All program. Exceptions to this rule include coverage for cosmetic surgery, and other medically unnecessary treatments. Those workers who are displaced as the result of the transition to a nonprofit health care system will be the first to be hired and retrained under this act. Furthermore, workers would receive their same salary for up to two years, and would then be eligible for unemployment benefits. The conversion to a not-for-profit health care system will take place as soon as possible, but not to exceed a 15-year period, through the sale of U.S. Treasury bonds.

Cost containment provisions/ reimbursement

The Improved Medicare for All program will negotiate reimbursement rates annually with physicians, allow for global budgets (monthly lump sums for operating expenses) for hospitals, and negotiate prices for prescription drugs, medical supplies and equipment. A “Medicare for all Trust Fund” will be established to ensure a dedicated stream of funding. An annual congressional appropriation is also authorized to ensure optimal levels of funding for the program, in particular, to ensure the requisite number of physicians and nurses need in the health care delivery system.

Families and individuals will pay less

Currently, health care costs for a typical family of four in the most common health plan offered by employers are an average of $8,584 a year — $5,114 in premiums and another $3,470 in out-of-pocket medical services, drugs, and supplies. Employers pay an additional $12,144 towards the coverage, for a total cost per family of $20,728 (Milliman Medical Index, www.publications.milliman.com). Fiscal studies by economists Dean Baker (2007) and Gerald Friedman (forthcoming) have estimated that under H.R. 676, 95 percent of U.S. households would be paying less than they now for all health care costs. Most businesses would pay less too.

Containing annual health care costs, while covering all Americans

Savings from reduced administration, bulk purchasing, and coordination among providers will allow coverage for all Americans while reducing health care inflation in the long term. Annual savings from enacting H.R. 676 have been estimated at $387 billion (Baker, 2008) to $589 billion (Friedman, forthcoming).

Proposed funding for the Improved Medicare for All program

* Maintains current federal funding for health care.

* Increases personal income tax on the top 5 percent of income earners

* Institutes a modest and progressive excise tax on payroll and self-employment income.

* Institutes a modest tax on unearned income.

* Institutes a small tax on stock and bond transactions.

SOURCE: Physicians for a National Healthcare Program (see links)

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5 responses to “Medicare for All

  1. I have advocated Mediicare for All for aboiut a decade.

    My only caution is that the taxes will not be all that modest. I know you have to sell the program and bluntness does not sell, but here are the facts.

    The claim payments actually received by doctors and hospitals for the under 65 population totals about $1 trillion a year.
    (This excludes all the profits and commissions of insurance companies.)

    Therefore, a single payer plan must raise $1 trillion in new tax revenue or it will face a rebellion by doctors and hospitals.

    This would be a payroll tax of about 16% if the money were all raised by a payroll tax.

    The payroll tax in Germany is 15% and it is not killing them………but I do not see how you manage the transition. Small cash-strapped American businesses would go broke left and right with a 16% tax.

    Solutions are welcome!

    Bob Hertz, The Health Care Crusade

    • dissentingdemocrat

      Everything costs something. The system we have now is the most costly in the world. Among the healthcare plans in the USA, Medicare costs the least: about 8% of every dollar spent as compared to 22% in the for-profit health insurance sector. Eliminating the profit, marketing costs, sales overhead of the for-profit companies will reduce expenses considerably.

      Also, the key to understanding insurance in general is the pooling of risk. The cheapest insurance schemes are those with the biggest pool of clients — more payers in relation to payees — so that the cheapest of all will be a pool of ALL citizens.

      SIXTY-FIVE years ago, Great Britain decided to socialize medical care completely. Britain in 1948 was a much poorer country than the United States is in 2013 and yet Britain was able to afford its National Health Service. The United States has a surplus of Billionaires and they have about $ 2.5 TRILLION in funds secreted in overseas tax havens. About half of all Corporations pay ZERO in corporate income taxes and very few, if any, pay the full rate of 35%. The U.S. manages to find the money to maintain a military establishment greater than the rest of the world put together. We are not a poor nation, we have just chosen to put our money into Billionaires’ foreign accounts, Corporate profits and paying the expenses of the largest empire in history. We could choose to reinvest these funds in the American people.

      • You are partly correct about re-directing military spending.

        If the Pentagon budget was reduced from $700 billion a year to $400 billion a year, this would be a huge down payment on Medicare for all.

        But even then, we would need to raise taxes by $600 billionm so as to reach $1 trillion a year to pay claims. (remember, I am already writing off insurance company profits.)

        A state agency or a generous employer like General Motors will eagerly choose a 15% payroll tax, versus the extortionate health insurance premiums it pays today.

        But a real estate agency or restaurant or farm or retail store that pays nothing for health insurance today will go ballistic before they pay a 15% payroll tax for health care

        The NFIB (National Federation of Independent Businesses) basically scuttled the Clinton health plan Please give me some comfort that they would not similarly scuttle a new version of single payer

        Most advocates of single payer are professionals and liberals who do not work in or own low wage businesses. This does not mean that they are wrong but it does make them oblivious.

  2. dissentingdemocrat

    Where did you get your Trillion Dollar projection? The Urban Institute calculated that universal healthcare coverage would increase the Federal Budget by $ 200 Billion and against that they further computed that business would save about $ 60 Billion by being able to end their private healthcare plans. Prior to retirement (yes even “liberals” have met a payroll) I ran a very small business and provided health insurance for my full-time staff. I would have loved to scrap an expensive private insurance plan for a simple payroll tax of 15%. I paid healthcare costs of about a fifth of my full time payroll expense. Nevertheless, I am not persuaded that your suggestion that a payroll tax of 15% would be the only means of finance.

    The Physicians for a National Healthcare Program (PNHP) have proposed that a single-payer plan for the U.S. would best be funded using a combination of revenue streams: (1) a 4% payroll tax, (2) a tax on financial transactions of 2%, (3) a 6% tax on unearned income (dividends, interest, capital gains) and (4) a 6% surtax on the top 5% incomes. Now you may have objections to these sources as well but the point is that a 15% payroll tax is not the sole source of funding.

    I am sure NFIB and others would oppose a national healthcare plan but this is not an argument against such a plan only a concern for tactics. I would bet that NFIB (or their precursor) probably opposed Medicare, Medicaid, Social Security, Workers Compensation, Unemployment Insurance, Public Schools, and the Minimum Wage. The vast majority of plantation owners in the South opposed emancipation but it was still a good idea.

    Would national health insurance kill small business? Canada has had single payer national health insurance for 50 years and they have many prosperous small businesses; Britain has had socialized healthcare since 1948 and they too have small business. Even “Socialist” Sweden and Denmark have thriving small businesses. I recall reading in a history of the New Deal that many businessmen said Social Security would kill their business in 1933. Indeed, universal healthcare would be a boon to small business in that they would no longer have to compete against big business with health plans for the very best personnel. I think universal healthcare would prove to be a boost for the creation of new businesses. So many times in my career I know I as well as others have forsaken entrepreneurial opportunities because the stability of salaried employment offered health insurance. I expect that many wage-earners liberated from the company health plan could choose to start a business of their own if they had their health needs covered. So if you truly believe in the liberation implicit in capitalism you should choose to support national healthcare.

  3. That is a wonderful point about how the cheap labor conservatives have predicted terrible doom with every social improvement for the last century — the 8 hour day, the end of child labor, female voting, Social Security, the Marshall Plan, et al. I can send you a great piece on this history.

    My trillion dollar estimate comes from just going into the Statistical Abstract of the US, counting the total revenues of doctors and hospitals,which is about $2 trillion, and then subtracting Medicare and Medicaid.

    The taxes proposed by PNHP are diversified, which is good, but two of them will be easy to evade. Securities transactions can be taken offshore with the click of a mouse, and capital gains can be postponed or gamed in other ways.

    The reason I think I am right is that the state of Vermont has put serious effort into a single payer design, and their thinking right now is that it will require a 12% payroll tax plus an increase in the state income tax about 2%.
    These numbers are coming from the friends of single payer.

    You are correct about other nations doing just fine with higher taxes for national health insurance……..but in many cases, their plans emerged just after WWII when health care was much cheaper.

    I think that you may underestimate the number and size of businesses that do not offer health insurance now, or at least do not pay for it. Especially in the southern and western states. We must have a national health system that does not increase unemployment, and I fear that the PNHP plan would do just that.

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