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Robert Reich: The Real Deal With Medicare For All – OpEd

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Republicans and even some Democrats are out to scare you about Medicare for All. They say it’s going to dismantle health care as we know it and it will cost way too much. 

Rubbish.

The typical American family now spends $6,000 on health insurance premiums each year. Add in the co-payments and deductibles that doctors, hospitals, and drug companies also charge you — plus typical out-of-pocket expenses for pharmaceuticals – and that typical family’s health bill is $6,800.

But that’s not all, because some of the taxes you now pay are for health insurance, too — for Medicare and Medicaid and for the Affordable Care Act. So let’s add them in, again for the typical American household. That comes to a whopping $8,975 a year. Oh, and this number is expected to rise in the coming years.

Not a pretty picture. If you’re a typical American, you’re already paying far more for health insurance than people in any other advanced country. 

And you’re not getting your money’s worth. The United States ranks near the bottom for life span and infant mortality. Or maybe you’re one of the 30 million Americans who don’t have any health insurance coverage at all.

You see, a big reason we pay so much for health insurance is the administrative costs involved in private for-profit insurance. About a third of what you pay goes to the people who oversee billing and collections. And then of course there are the marketing and advertising expenses, and the profits that go to shareholders or private-equity managers.

What happens if we have Medicare for All? 

Let’s first consider a limited version that keeps private insurance — as proposed by candidates including Joe Biden, Pete Buttigieg, and Kamala Harris. The insurance costs remain the same because it’s the same private insurers and the same co-payments and deductibles. The only difference is more of this would be paid through your taxes, rather than by you directly, because the government would reimburse the insurance companies.

This could help bring down costs by giving the government more bargaining leverage to get better prices. But we don’t know yet how much.

Now, let’s talk about a different version of Medicare for All that replaces private for-profit health insurance, as proposed by Bernie Sanders and Elizabeth Warren. In this version, total costs — including a possible combination of premiums, co-payments, deductibles, or taxes — are even lower. This option is far cheaper because it doesn’t have all those administrative expenses. It’s public insurance that reimburses hospitals, doctors, and pharmaceutical companies directly and eliminates the bloat of private insurance companies.

Economists at the University of Massachusetts-Amherst say Medicare for All that replaces private for-profit insurance would reduce costs by about 10 percent, mostly from lower administrative and drug costs. The Urban Institute estimates that households and businesses would save about $21.9 trillion over ten years, and state and local governments would save $4.1 trillion.

You’d pay for it through a combination of premiums, fees, and taxes, but your overall costs would go way down. So you’d come out ahead.  And everyone would be covered.

You’d keep your same doctor or other health-care provider. And you could still buy private insurance to supplement Medicare for All, just like some people currently buy private insurance to supplement Medicare and Social Security. The only thing that’s changed is you no longer pay the private for-profit corporate insurers.

Any Medicare for All is better than our present system, but this second version is far better because — like Medicare and Social Security — it’s based on the simple and proven idea that we shouldn’t be paying private for-profit corporate insurers boatloads of money to get the insurance we need.

It’s time for true Medicare for All.



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Robert Reich

Robert Reich

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

2 thoughts on “Robert Reich: The Real Deal With Medicare For All – OpEd

  • Avatar
    November 20, 2019 at 4:18 pm
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    Reimbursement via taxes! And the costs will go down and everybody is insured. Amazing. what happens to income taxes and an assortment of taxes covering everything from retail purchases to the so called ‘corporate’ taxes which are passed on to the consumer. there ain’t no free lunch and this is a golden example of oir in the sky thinking.

    Reply
  • Avatar
    November 21, 2019 at 7:44 pm
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    Is this the same guy that pushed the Obama care narrative that said the average family’s cost would be reduced by $2500 a year and if you like your doctor, you can keep your doctor? None of it was true and we still listen to this stuff because nobody questions these political operatives disguised as objective reporters? Why do we trust this type of political rah, rah? An eHealth report concluded that from 2013 to 2017, the average individual market premium increases were 99 percent for individuals and a jaw-dropping 140 percent for families. Now, this guy is pushing the upheaval of our total system and literally does not know what he is talking about! Wake up people…this guy’s article is laughable!

    Reply

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