At the time of the Affordable Care Act’s passage, many suspicious conspiracy theory proponents suggested the goal of Obamacare was to fail in order to usher in a single-payer program of Medicare-for-All. The theory goes something like this: with nowhere to turn except the government, Americans would finally throw up their hands and acquiesce to government intervention. Seniors purportedly all love their Medicare, so why not expand the program to cover everyone?
It’s not that hard to believe Obamacare was a conspiracy, with asinine design features intended to cause the program to unravel. If I were designing a health proposal intended to fail it would be hard to find a better plan design for that purpose. All that’s keeping Obamacare afloat are huge subsidies for middle-class voters, huge subsidies for low-income enrollees and huge subsidies for insurance companies. Without huge subsidies, it would collapse like a house of cards in an adverse selection death spiral.
Medicaid expansion was another brick in the road towards Medicare (or Medicaid-for-All). Over the years I’ve derisively referred to expanding Medicare to cover the entire U.S. population as Medicaid-for-All. My point was that the program the elderly have come to rely on is not the same program we would have if it were expanded to cover the entire population. Various proposals, from Vermont, to Colorado and others, such as California have been derailed by cost projections that give taxpayers and voters pause. Nonetheless, there have been numerous others, with some type of initiative proposed in 21 states from 2010 t 2019:
Since the ACA was passed in 2010 through 2019, legislators in twenty-one states have proposed sixty-six unique single-payer bills. Although our research turned up over 100 bills that can be characterized as proposing a state-based single-payer plan, removal of duplicates (i.e., substantially similar bills introduced in different chambers in the same legislative session or bills assigned different numbers as they move through the legislative process) resulted in sixty-six bills. Although many bills explicitly stated that their purpose was to establish a single-payer health system, not all did.
As recently as this past May the Medicare for All Act of 2023 was introduced by Democrats and cosponsored by nearly one-fourth of Members of Congress. The Biden Administration apparently hasn’t gotten the message. It is currently propping the ACA up using expanded middle-class subsidies.
There are numerous reasons Medicare-for-All faces an uphill battle. Expanding Medicare would upset 57 million seniors, whose benefits would be worth far less if they have to compete with 270 million more people in the program. It would upsell most doctors because Medicare pays lower provider fees than private insurance – in some cases substantially lower. On average, Medicare only reimburses doctors $0.70 to $0.80 cents for every dollar that private insurers pays them. Hospitals too would oppose Medicare-for-All in its present form. There are examples where hospitals with monopoly power are charging private insurers 300%, 400% and sometime 500% of what Medicare reimburses them for some procedures. Doctors and hospitals would undoubtedly lobby for higher fees, which would negate any advantage of Medicare-for-All, without fixing the flaws, waste and cost-overruns.
Before people like Vermont Sen. Sanders or Washington Rep. Jayapal clamor for Medicare-for-All, perhaps they should work to fix the flaws inherent in Medicare by making Medicare more competitive. Reforms like making hospitals compete for business by including competitive bidding for some procedures, reference pricing, selective contracting, bundled payments, fraud control, refusing to pay for poor quality, etc. The list is endless. Currently Medicare is treated like an economic development entitlement for state and local health care organizations. Medicare doesn’t even have the authority to withhold payments to vendors who perpetuate fraud. Medicare is required to pay and chase fraudulent payments rather than block them. Apparently, most Medicare beneficiaries prefer private insurance rather than government-run insurance. Indeed, the sector of Medicare that is growing is Medicare Advantage, those private insurance companies that service Medicare beneficiaries. Medicare Advantage now covers half of Medicare beneficiaries.