How much would Universal MEDICARE cost?

[Hilarity_N.Suze]

One of the great things Denver used to have, when I first lived here in the '70s, was cheap and effective health care at Denver General. For instance, when I tried to kick a soccer ball in the park and tripped over it instead and thought maybe I had broken my wrist, the evaluation, x-ray, diagnosis (sprained, not broken) and subsequent care (pain pills and a wrap) cost me… $1. But I had to spend about six hours at the hospital for all this. (The cost to the patient was on a sliding scale and I had a pretty low income, although it was more than minimum wage.)

By contrast, a couple of years ago, and I should note as an old lady and not a young thing, I did exactly the same thing with one of those construction sandbags somebody left lying on the sidewalk. Tried to move it off the sidewalk with my foot, tripped on it instead, faceplanted on (fortunately) the asphalt street instead of the concrete sidewalk. Went home, checked my coverage, determined that it might cost me as much as $700 so I decided to wait and see if things improved on their own. As in, if the wrist was actually broken I might be okay but if it was merely sprained then possibly Medicare wouldn’t cover it–they only cover ER visits for actual emergencies, and none of the free-standing urgent care places near me take Medicare patients.

How did they do it, back then, and they can’t do it now? What happened? I don’t know, but Medicare really seems to just cover extreme stuff and not your day-to-day bungups. For instance Medicare does not cover vision correction, hearing problems, or mental health, unless you add onto some Medicare-assisting health “insurance.” Which, it’s cheaper just to pay for it.

I dunno but my 22-year-old son really needs a workup (to rule out hypochondria) and he does not have the same access to health care that I had at a similar age, and it’s sad. His entire savings would be wiped out with one ER visit, and then what?

Medicare is a massive bureaucratic sinkhole, that’s one thing.

[puddleglum]

@Red_Wiggler

I don’t understand what point you are trying to make in response to what point I was trying to make.

The reason corporate america does not push for universal health care. Currently lets say a company spends an average of 50K for salary and 25K for benefits. After a health care bill they would then be spending 60K for salary and 15K for benefits. There is no reason for them to lobby to make that change.

[Hilarity_N.Suze]

When I worked at a hospital (in a non-patient-care position), we had an entire department just to handle the annual cost report for Medicare, plus temps at critical times. And this was not a department full of cheap assistants, it was a department full of MBAs who were paid commensurately. Not to mention that every department in the entire hospital devoted human resource time to the paperwork involved. I would say in salaries alone it probably cost the hospital $650,000 a year to handle all this paperwork, generate it, review it, maintain the copy machines–that’s probably a conservative estimate. All money that in no way contributed to any person’s health care.

[Red_Wiggler]

@puddleglum

The reason corporate america does not push for universal health care. Currently lets say a company spends an average of 50K for salary and 25K for benefits. After a health care bill they would then be spending 60K for salary and 15K for benefits. There is no reason for them to lobby to make that change.

You can’t make that assumption (about pay simply replacing benefit). Plus there is the benefit to employers of not having to fuck with health care administration any more.

[Horatius]

@tracer

Ah, thank you. So, with your rough estimate, we get a total cost that is roughly two-and-one-half (2½) times what Medicare costs right now.

That’s nearly as high as Bernie Sanders’ (optimistic) estimated cost for his Single-Payer Health plan, which is $1.38 trillion per year on top of the Federal medical outlays already in place. (Though as the link in my OP points out, others have disputed his price tag.)

Darn. I was naively hoping it would be cheaper than this.

But the point is, it really should be cheaper than that.

@wolfpup

How do we know these two facts are true, broadly and generally speaking? Simple. One, by looking at all the other first-world countries, especially those that are economically very similar to the US, like Canada. Here is a chart of per-capita health care costs. On a chart like this, whether it’s per-capita or as a percentage of GDP, US costs are just staggering compared to the rest of the world – per-capita, Americans pay two and half times the OECD average for health care – and medical outcomes are no better and sometimes worse, with tens of millions having no insurance at all.

I did a simple comparison between the US and Ontario. Our Ontario Health Insurance Plan is projected to cost us about $61 billion next year, and covers about 13.6 million people. Scaled up to the population of the US, and you should be able to get an equivalent to OHIP for about $1.5 trillion, which is just barely more than you’re already paying for Medicare. And, frankly, OHIP sounds like a much better deal than Medicare.

The other simple thing that I’ve done is just talked to people who have relocated from Canada to the US, and who have experience with both health care systems. The message that I constantly hear is that, by and large, the health care they get in the US is just fine, but the insurance aspect of it is a huge. monumental, frustrating, time-wasting pain in the ass. Back home, they were accustomed to just go to a doctor or a hospital, get the care they need, present their health card, and go home. Now they are faced with a staggering burden of forms and paperwork, phone calls, claims denials, arguments, co-pays, deductibles, cost-sharing arrangements, etc. etc. Somebody has to pay for all that work, even though it has zero medical benefit. Someone should ask the insurance industry shill at the Heritage Foundation about that.

This is the other factor so few Americans seem to discuss. And it’s not just a factor in comparing OHIP to US health insurance. It’s also a factor in other areas where Canada does have private insurance, like drug plans or dental plans. I was just into the dentist today, and paying was literally no more effort than the grocery shopping I did afterwards. The receptionist punched a few keys on the computer, told me the insurance company had approved it, charged me the co-pay on my credit card, and handed me the receipt, in like, 30 seconds. My drug plan is the same way - when I pick up the order I phoned in the day before, the drug store has already printed a label that has the amount I need to pay on it’s face, and the insurance is all dealt with. Scan a bar code, pay with my credit card, and I’m gone, just like buying an over the counter medication, or a candy bar.

[Shodan]

@Red_Wiggler

You can’t make that assumption (about pay simply replacing benefit).

Well, that’s true, but if Medicare-for-all is the model, then instead of paying for private insurance, your taxes would go up. Or you would need Medi-gap insurance as seniors do now, and that cost would be included under benefits.

As previously cited, health care providers lose about 10% per Medicare patient, on average. They make up the difference by charging private insurers more. Either there will be other private insurers, in which case they will get charged the same, or there won’t, in which case health care providers will need to get the money from somewhere else. As also previously cited, administrative costs per patient are as high, or higher, for Medicare, and so it does not seem like we are going to save money by adding more patients.

TANSTAAFL.

Regards,
Shodan

[Voyager]

@Horatius

My drug plan is the same way - when I pick up the order I phoned in the day before, the drug store has already printed a label that has the amount I need to pay on it’s face, and the insurance is all dealt with. Scan a bar code, pay with my credit card, and I’m gone, just like buying an over the counter medication, or a candy bar.

My drug plan in the US worked exactly the same way, both under my employer covered private insurance and Medicare Plan D. Though most of my drugs are ordered online, 3 months worth, and sent from the insurer’s pharmacy with a very low co-pay and no shipping charges.
We have the technology, just not the will to apply it to everyone.

[Wesley_Clark]

@puddleglum

Why does it become 20% cheaper? Where does the money come from?

Medicare has lower reimbursement rates, so providers would get less income. A surgery that costs $30,000 in private insurance may cost $20,000 in medicare or medicaid.

Medicare can negotiate costs of bulk purchases, which would drive down costs.

Medicare spends far less on administration (2%, vs about 10-20% in private insurance).

Because of all these things, medicare for all should be cheaper than our current system.

Where does the money come from?

Take the money we currently spend on tax revenue to fund government health programs and direct that towards single payer. the medicare FICA tax and the income tax already raise close to 2 trillion to fund health care. Redirect that existing tax revenue to single payer

Then add a progressive income tax and small payroll tax on top of it. Then eliminate all employer and employee spending on health care. In the end most people come out ahead.

[Red_Wiggler]

@Shodan

Well, that’s true, but if Medicare-for-all is the model, then instead of paying for private insurance, your taxes would go up. Or you would need Medi-gap insurance as seniors do now, and that cost would be included under benefits.

As previously cited, health care providers lose about 10% per Medicare patient, on average. They make up the difference by charging private insurers more. Either there will be other private insurers, in which case they will get charged the same, or there won’t, in which case health care providers will need to get the money from somewhere else. As also previously cited, administrative costs per patient are as high, or higher, for Medicare, and so it does not seem like we are going to save money by adding more patients.

TANSTAAFL.

Regards,
Shodan

We are a totally unique country, seeing as how we can’t manage what every other industrialized nation in the world does at two thirds the cost.

One would think that Medicare patients cost more because they’re mostly senior citizens but that might be crazy thinking, too.

[galen_ubal]

Lemme add a touch of anecdata to this discussion.

I am a dual citizen, US and Australia, who resides full-time in Australia. Since I’m still a US citizen, I have to file taxes on my income, though it is all below the exemption for non US-sourced income. Still, it’s a doddle to figure out what I would owe at my current income, and compare it to what I’m actually paying in Australian income tax.

One quirk - Australia doesn’t have filing statuses, so I used the Married Filing Separately status in my calculation, as that’s how I file anyway.

I pay 11.6% more in income tax in Australia than I would in the US (allowing for exchange rates and all that).

Note that that is the only tax I pay on income - no Medicare/FISA/state/ income tax here. No additional withholding for employee health insurance premiums. I suspect accounting for that would bring it the difference much closer - on the order of 8% or so.

In return, I don’t have to worry about it. Practically all* of my medical expenses are covered, I don’t have to seek out a particular doctor or hospital, and my wait times have been less than any I experienced in the US. I think it’s a more than fair trade.

My father-in-law was in a bad motorcycle accident a few years back - busted femur, broken ribs, etc. My in-laws paid nothing out of pocket.

For the “it can’t work in the States” crowd - would you be willing to pay 10-15 percent more income tax to not have to worry about it? Would you be willing to pay so that your friends, family, and even the people you hate would be covered?
*Optical, dental, private hospitals, and ambulance fees are not covered. That said, when I had some major dental work at a private hospital, about 2/3 of the general anesthetic fee was covered. Ambo insurance is cheap, and I don’t worry about the rest.

[puddleglum]

@Wesley_Clark

Medicare has lower reimbursement rates, so providers would get less income. A surgery that costs $30,000 in private insurance may cost $20,000 in medicare or medicaid.

Medicare can negotiate costs of bulk purchases, which would drive down costs.

Medicare spends far less on administration (2%, vs about 10-20% in private insurance).

Because of all these things, medicare for all should be cheaper than our current system.

Where does the money come from?

Take the money we currently spend on tax revenue to fund government health programs and direct that towards single payer. the medicare FICA tax and the income tax already raise close to 2 trillion to fund health care. Redirect that existing tax revenue to single payer

Then add a progressive income tax and small payroll tax on top of it. Then eliminate all employer and employee spending on health care. In the end most people come out ahead.

Unlikely that Medicare would be able to keep charging less. In 1997 congress passed a law that cut Medicare payments to doctors if the program went over budget. Then for 18 straight years they postponed the payment cuts before getting rid of them once and for all in 2015. Because doctors can charge marginal cost to Medicare patients that are below average costs and still make money that does not mean they can do the same when all patients are Medicare patients. The most likely outcome would be the doctors and nurses would howl when you try to cut their compensation by 20% in a year and it would quickly be restored to the previous level.
Medicare and other huge insurers could do this currently. The fact that they don’t means that this is unlikely to happen.
Medicare spends less on administration partly because it outsources the some of it to the SSA. It is probable that Medicare spends too little on administration because it is estimated that there is $60 billion in Medicare fraud annually. If you quadrupled the size of the program without increasing the administration costs you would like quadruple the fraud rate to a staggering amount of money.

Changing to Medicare for all would involve a massive upfront cost as the new bureaucracy is created. Then hopefully there would be savings as costs rise a little bit less each year than they would have otherwise. However, it is unlikely that these cost savings would make up for the initial outlay plus the cumulative deadweight loss of the massive tax increases for decades.

[Quartz]

@tracer

Estimates for the cost for a full-blown Single Payer health care system range from $1.38 trillion to $2.8 trillion. (Source: PolitiFact | How expensive would a single-payer system be? )

You’ve got some major inefficiencies there. The UK’s NHS budget is approx £125B for ~65 million people. Multiply that by 5 to get the American population and you get £625B. If you round it up a bit, you’re at about $1T.

Oh wait, the UK has DEATH PANELS! (Hint: no, we don’t.)

[Voyager]

@puddleglum

Changing to Medicare for all would involve a massive upfront cost as the new bureaucracy is created. Then hopefully there would be savings as costs rise a little bit less each year than they would have otherwise. However, it is unlikely that these cost savings would make up for the initial outlay plus the cumulative deadweight loss of the massive tax increases for decades.

Adding more people to look for fraud, a good idea, is not a massive upfront cost. And it would replace similar efforts in private insurance. In fact, with more data, using data analysis to find fraud would work better.
Aside from that, just changing the date you are eligible does not seem a major upfront cost. Sure there will be a lot more people working for Medicare, and lot fewer working for competing private insurence companies. And most health care providers deal with Medicare already, so no increase there.

Being a doctor is an excellent way of getting into the 1%. Is this really reasonable? Perhaps lower pay and repayment of medical school bills after a certain number years of practice - anywhere - might be better.

[PatrickLondon]

@Quartz

You’ve got some major inefficiencies there. The UK’s NHS budget is approx £125B for ~65 million people. Multiply that by 5 to get the American population and you get £625B. If you round it up a bit, you’re at about $1T.

Footnote perhaps: don’t forget the NHS is a devolved responsibility, i.e., it is controlled and funded separately in England, Wales, Scotland and Northern Ireland. Across the whole UK, therefore, the total spend is about £150bn. Still comes more closely to $1tn at today’s rate of exchange, but we do sometimes forget that the budget for England is not the whole story.

Not to mention all the issues about cost control in a nationalised provider system, and hazier questions about the culture of patient expectations and so on.

[puddleglum]

@Voyager

Adding more people to look for fraud, a good idea, is not a massive upfront cost. And it would replace similar efforts in private insurance. In fact, with more data, using data analysis to find fraud would work better.
Aside from that, just changing the date you are eligible does not seem a major upfront cost. Sure there will be a lot more people working for Medicare, and lot fewer working for competing private insurence companies. And most health care providers deal with Medicare already, so no increase there.

Being a doctor is an excellent way of getting into the 1%. Is this really reasonable? Perhaps lower pay and repayment of medical school bills after a certain number years of practice - anywhere - might be better.

The massive up front cost would be to sign everybody up at once. Currently you can just do it when the reach the eligible age but everybody at once would be a massive project. Hiring government workers is not as easy as hiring in the private sector, most likely contractors would be doing the work and that means a lengthy bidding process. Quadrupling a huge government program in a year would be a huge and expensive undertaking.

[adaher]

@Quartz

You’ve got some major inefficiencies there. The UK’s NHS budget is approx £125B for ~65 million people. Multiply that by 5 to get the American population and you get £625B. If you round it up a bit, you’re at about $1T.

Oh wait, the UK has DEATH PANELS! (Hint: no, we don’t.)

NICE actually decides what will be covered in the system, and they don’t just consider effectiveness. They consider cost and Quality Adjusted Life Years to determine who will get expensive treatments and who will not.

No, it’s not technically a death panel, but it is as Sarah Palin described it, a panel that decides whether or not you are worth expensive treatments.

In the US, we expect hip replacements for 95 year olds and $100,000 cancer drugs that extend life by 30 days. That must be reflected in cost estimates, and it is, which is one reason our single payer will be more expensive. But we’re a lot richer than you, so we might be able to afford it.

[PatrickLondon]

@adaher

NICE actually decides what will be covered in the system, and they don’t just consider effectiveness. They consider cost and Quality Adjusted Life Years to determine who will get expensive treatments and who will not.

No, it’s not technically a death panel, but it is as Sarah Palin described it, a panel that decides whether or not you are worth expensive treatments.

No, they don’t. As you note, they decide what’s cost-effective for the system, i.e., what the NHS is compelled to provide if a doctor prescribes it, for any patient they prescribe it for. NICE doesn’t deal with individual cases.

[adaher]

Not individual cases, sure. But I’m sure it seems that way when your life extending drug isn’t approved because you’d be too much of a burden for society.

That just won’t happen here in the US, so we have to count on paying a lot more than Britain does.

[Quartz]

@adaher

Not individual cases, sure. But I’m sure it seems that way when your life extending drug isn’t approved because you’d be too much of a burden for society.

Then you pay for it yourself or hope it’s covered by your health insurance. Yes, in the UK you can buy health insurance on top of the NHS.

[Novelty_Bobble]

@adaher

That just won’t happen here in the US, so we have to count on paying a lot more than Britain does.

Are you saying that your health insurance policies cover all those cutting-edge, marginal gain treatments?