The demand for health insurance company bailouts and recent news reports about a surge of applications for Medicaid and Minnesota Care programs—due to tens of thousands of workers losing income and jobs in the pandemic—reveal once again the chronic failures of our inefficient employer-based private health care system.
Meanwhile, the great Minnesota-centered national uprising over racial discrimination is dramatizing once again that our country suffers from shameful inequities in the care provided to people of different races, incomes, and places of residence.
In these perilous new circumstances, the case for Medicare for All (M4A)—an efficient and unified national system of health care financing that provides high-quality health services to everyone—has grown stronger than ever.
Americans overall would pay significantly less
Despite an ever-present flood of misinformation from those making huge profits from the status quo, almost all reputable research and projections about M4A indicate that Americans overall would pay significantly less than we do now under our irrational mishmash of public and private plans and programs.
That’s the finding of my recently published review of seven studies conducted by academic economists and health policy experts to estimate the cost of health care under the M4A bills currently before Congress (H.R. 1384 and S. 1129).
The conclusions of these studies are remarkably similar. The average of their estimates of health care costs under M4A is a 5.7% decrease from what we currently spend, despite more people being insured, out-of-pocket payments being eliminated, and more benefits being added.
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How can this be? The answer lies in eliminating private insurance administration waste and negotiating down the cost of prescription drugs. Private insurance companies spend 13.2% of premiums on administration; the current Medicare program spends 2.3% on administration. Our drug prices, currently the highest in the world, also would be dramatically reduced. Under either M4A bill, current Medicare restrictions on negotiating with pharmaceutical companies would be abolished, leading to savings of at least 10 percent and perhaps as much as 40 percent. Over time other health care savings would also be possible.
Funds would be redirected
Overall spending under M4A would decrease even though federal spending would increase. The necessary federal revenue would be obtained not by increasing the amount of money paid for health care but instead by redirecting money now flowing through the profit-seeking private health care bureaucracy. The funds would flow instead through the federal government and then on directly to hospitals, physicians, and other health care professionals.
M4A would not have prevented the COVID-19 pandemic. However, as nations with universal health care have shown, preparation and response have often been more effective under a coordinated national system. Under M4A, a unified national health budget would provide for preventive care, therapeutic care, public health, medical research, and other health investments. The unified budgeting process would be a tool for assuring coordination of public health with clinical care.
The pandemic has made the perils of poor coordination starkly vivid, creating confusion about how to organize testing for the disease, how to distribute scarce equipment, and how to proceed in testing treatments. Under M4A, the federal government would be motivated to make public health activities more effective. At present, failures in public health increase health care costs primarily for private insurance companies. Except for higher costs in the Medicare and Medicaid programs, the government suffers no financial consequence for failing to prevent disease. These mismatched incentives result in underfunding of public health.
COVID-19 and the national protests over George Floyd’s brutal killing have put the costliness and inequality of U.S. health care on full view. Early in the pandemic, New York Times columnist Farhad Manjoo astutely observed that the net effect of bailouts and temporary expansion of federal public health entitlements was “Medicare for All But Just For This One Disease.’’ We know that M4A would serve us well beyond the current pandemic and the current surge of social unrest.
The preponderance of research shows that the cost of M4A is not an obstacle to its implementation. The principal obstacle has been fear of the unknown, but this fear is now more than counterbalanced by fears of the pandemic and uprising. We must seize this opportunity to build heightened public awareness of our defective system to become better informed, and to take action. We must build on the growing political will to enact universal health care and to manage the transition to it.