Why Medicare For All Actually Makes Sense (and would be cheaper)

As human beings who live in the democracy that is the United States of America, we have an impressive number of privileges, resources, and freedoms that many of us take for granted. However, healthcare, one of the most basic of needs, is not among these. The United States should have a Medicare For All single-payer program because it is more cost-effective than private insurance, more practical to manage, and ensures that everyone gets the health treatment they need when they need it.

Since the presidency of Franklin Roosevelt and the introduction of the New Deal in 1933, the idea that the government could provide a safety net for people when they needed help became one of the accepted roles of government in the United States. What many see as the “safety net” has grown over the years, from the introduction of social security in 1935 (which introduced unemployment insurance, retirement and disability benefits) to Lyndon Johnson’s “Great Society” programs (which included Medicare, Medicaid and other expanded social security benefits, as well as extensive programs to eliminate poverty in America) to Barack Obama passing the Affordable Care Act with the goal of providing health insurance for every American (History.com, Starr). This steady advancement of what we deserve as the minimum level of care has expanded. Medicare For All is no different. We must guarantee that everybody has access to the healthcare they need whether they have a job that provides health insurance benefits or not.

Medicare For All is more cost-effective than having many different private insurance companies. Under this plan, medical providers receive a set fee for services that are not dependent on what insurance patients have or don’t have. In our current system, those who have no insurance at all pay the highest rates to medical providers because no one is negotiating a lower price for them. For example, a person with insurance goes to the doctor and is billed $300 which is sent to the insurance company. The insurance company says they will only pay $100 which the doctor accepts as payment. A person without insurance, on the other hand, is billed $300 and pays $300 because no one is advocating for them. This is a basic inequity in our healthcare system. As a result, those without health insurance put off going to the doctor and then go to the emergency room when they have to, causing overcrowding at our hospitals.

According to Harvard economist David Cutler, the number one reason our country’s healthcare costs are so high is that “the administrative costs of running our healthcare system are astronomical. About one-quarter of healthcare cost is associated with administration, which is far higher than in any other country” (Cutler). One example Cutler brought up in a 2010 discussion on this topic with National Public Radio was the case of the 1,300 billing clerks at Duke University Hospital which has only 900 beds. Those billing specialists are needed to determine how to bill in order to meet the varying requirements of multiple insurers. Canada and other countries with a single-payer system do not require this level of staffing to administer healthcare.

If we keep our current healthcare system, national health expenditures are projected to total $52 trillion over the next ten years. A recent study by epidemiologists at Yale University showed that Medicare for All would save approximately $5 trillion in health care costs over those same ten years (Galvani, et al.). This is done by eliminating the waste in the system from health insurance administration (outlined in the Cutler study) and by implementing a common-sense method of financing for families. Currently, the average American family makes around $60,000 a year. That same family currently pays for their healthcare through premiums, deductibles, co-payments, and out-of-pocket expenses, which is approximately $12,000 a year and 20% of that family’s annual income. Under Medicare for All, all of these expenses are gone, period. Instead, the family earning $60,000 will pay a 4% income tax exempting their first $29,000 of income. This leaves $31,000 in taxable dollars, which results in a yearly expense of $1,240 for the average American family’s healthcare. This saves the average family 90% on their coverage, and is made possible by the significant savings made through eliminating the industry’s administrative waste outlined by Cutler.

For businesses who cover their employees, a similar model would be implemented. In 2018, employers paid an average of $14,561 in private health insurance premiums for a worker with a family of four. These premiums would be totally eliminated, and employers would pay a 7.5% payroll tax to help finance Medicare for All — just $4,500 — a savings of more than $10,000 a year. Again, these significant savings are made possible by eliminating the tremendous waste that is health insurance administrative costs.

One of the arguments against Medicare For All can be found in the experience the State of Vermont had shortly after the passage of the Affordable Care Act in 2010. Between 2012–2014 Vermont attempted to institute a single-payer system but could not find a way to make it cost-effective and soon scrapped the whole plan (Suderman). However, a plan like Medicare for All is not designed to be efficient at a level as small as the state of Vermont (which holds only 624,000 people), and the Governor did a rather poor job of working to adapt it to these conditions. Another argument is that Medicare For All will reduce the number of doctors available for the neediest patients because physicians will be unwilling to accept the reimbursement rates offered under this model (Caffrey). I remain optimistic that productive negotiations could prevail given all that is at stake.

For people who say we cannot afford this, I say we cannot afford not to, particularly as we consider the needs of future generations. Do we want to be like Ebenezer Scrooge and let people die to decrease the surplus population for the sole reason that they cannot afford healthcare? I think we can do better as a country. In the wealthiest country in the history of the world, we have an obligation to guarantee healthcare to everyone as a right

Works Cited

Booth, Stephanie. “Medicare for All: What Is It and How Will it Work?” Healthline, 26 Aug. 2020, www.healthline.com/health/what-medicare-for-all-would-look-like-in-america#2.

Caffrey, Mary. “Physicians Far Less Likely to Take New Medicaid Patients, CDC Finds.” The American Journal of Managed Care, 20 July 2017, www.ajmc.com/view/physicians-far-less-likely-to-take-new-medicaid-patients-cdc-finds.

Cutler, David. “Why Does Health Care Cost so Much in America? Ask Harvard’s David Cutler.” PBS News Hour, 19 Nov. 2013, www.pbs.org/newshour/economy/why-does-health-care-cost-so-m.

History.com Editors. “New Deal.” History, 27 Nov. 2019, www.history.com/topics/great-depression/new-deal.

Starr, Paul. “The Health-Care Legacy of the Great Society.” Princeton.edu, Jan. 2014, www.princeton.edu/~starr/articles/articles14/Starr_LBJ_HC_Legacy_1-2014.pdf.

Suderman, Peter. “This Is the Strongest Argument Against Medicare for All.” The New York Times, 19 Oct. 2019, www.nytimes.com/2019/10/09/opinion/bernie-sanders-single-payer.html.

Professor Galvani, Alison, PhD; Parpia, Alyssa, MPH; Foster, Eric; Burton, Singer, PhD; Fitzpatrick, Meagan, PhD. “Improving the Prognosis of Health Care in the USA.” The Lancet Magazine, Feb. 2020,

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)33019-3/fulltext#seccestitle10