Medicare for All = end of private insurance?

I’m pretty sure I don’t understand what folks mean by Medicare for All. I naively assumed that it means extending the Medicare benefits offered to most folks over 65 to everybody. But then I keep reading how this means the demise of private insurance companies.

I’m on Medicare, but I have supplemental insurance, as does just about every senior citizen I know. And these plans have to be very lucrative to insurance companies, based on the extensive marketing they do to entice people to sign up.

So why does Medicare for All mean no more private insurance?

You aren’t alone.

The phrase “Medicare for All” is used to describe a range of plans advocated by a number of different people. Here’s an article that describes some (but not all) of the sometimes quite different plans for it.

Some would essentially mean an end to private insurance. Others would not.

There are gaps in your medicare coverage that are made up for in private coverage. Hopefully, with a medicare for all package, these gaps would be filled, and you would not have to pay out to a third party in order to do so.

If everyone is able to buy into such a plan, then no one would have a reason to buy into a private insurance plan. Private insurance wouldn’t be banned, any more than 8 track tapes or BetaMax Cassettes, but it would be as obsolete as either.

Now, the idea that it would completely dismantle the private insurance market is a boogieman that is made up in order to make people with private insurance scared of it going away and having to change to something new and different. Most, if not all public health care countries still do have supplemental insurance, but it is for things like private rooms, or maybe even shorter wait times, it is not a gatekeeper as to whether you have access to healthcare without bankrupting yourself as our current system is. We’ll probably still have dental and vision as separate as well.

The thing is, you don’t have to ban private insurance at all. If medicare were offered to all, then it would be such a superior product, that companies that rely on using a high percentage of premiums for profit could not compete. The ability for a single payer to negotiate with drug companies and healthcare providers would allow them to keep their costs down, their lack of need to contest every claim means that they save money on not having adjusters, and the lack of CEOs and stockholders means that they do not need to focus on profit.

No, it doesn’t. Most nations with single payer also have the option to purchase private insurance on top of it to get more comprehensive coverage, faster coverage or better coverage. The US would have the same thing.

We’d probably be like Australia or the UK. They have single payer along with private insurance you can optionally purchase.

However private insurance would be an accessory, not the bulk of the insurance industry like it is in places like Switzerland.

It all depends on the model that is chosen. The Canadian system generally does not allow private insurance as an alternative to the public system, and certainly not to allow wealthy people to jump the queue, which is what “reduce wait times” sounds like.

One of the policy reasons for taking this approach is that we are very conscious of the huge US health insurance companies, which would probably want to expand north, bringing all the issues that the US health system has. A bar on allowing private insurance prevents that. Historically, that’s not been an issue for the UK and Australia, but given our proximity to the US, it’s always been a concern here.

There still are private insurance companies, but they offer supplemental such as ambulance fees and drug costs, things that are not covered by our Medicare. They are not an alternative to the public health care.

There are two major reasons that no realistically achievable “Medicare for all” plan would eliminate private insurance.

First, even the most socially liberal European countries like the UK and Germany have a separate private insurance tier for those who financially qualify and wish to take that option. If European countries do so, then certainly a far more free-market oriented nation like the US would inevitably do so too, and indeed would most likely make private insurance a bigger factor in the overall system than most other countries. The reason Canada (effectively) prohibits private insurance for medically necessary procedures is as stated by Northern Piper above.

The second reason private insurance will remain in any realistically achievable UHC plan is that any such plan would very likely have limitations and perceived inadequacies, and there would be a significant market in filling these gaps with private supplemental insurance. This in fact happens with Medicare as it exists today.

Canada has medical insurance “for all” but private insurance still exists. That covers gaps (for instance, dentistry and optometry are not covered by Canadian provincial insurance) and also covers medication and drugs (doctor visits are free, but prescribed medication is not).

All of that is true, but it’s also important to note a basic philosophy in the system that exclusions as a broad rule tend to be nickel-and-dime items, while it offers comprehensive coverage for all procedures deemed to be medically necessary, regardless of cost and with no caps or limitations. The practical implication of this is that no one needs to take out supplemental insurance to protect against some major health event that may not be adequately covered, because it always will be. It has to be this way because there is no private tier option. This is dramatically different from the situation with basic US Medicare, which has gaping holes and limitations in medically necessary coverages.

It also means that there’s often little incentive in Canada to bother with supplemental insurance at all, which I never had when self-employed, and why it’s primarily a benefit almost universally provided by employers rather than purchased as individual plans. The fact that dental coverage purchased on an individual plan is practically useless when you look at cost/benefit, and the fact that seniors automatically get free prescription drug coverage anyway, only underscores the minimal role of supplemental insurance. I suspect under the kind of two-tier system the US would implement, getting adequate coverage would entail either supplementing a limited Medicare for All plan or just going into the private tier.

It’s an amporphous and generally poorly defined description for some form of a single payer UHC system without having to say politically senstive things like UHC. There are a bunch of different uses of the term, now. Bernie Sanders used the term in his 2016 His concept saw it replacing most insurance.

Cite

As Bernie Sanders conceived it it’s more like a brand new Medicare 2.0 but for everyone. The old Medicare system gets replaced too. Most of the private insurance component under current Medicare goes away in his vision. Since he popularized the term it’s not entirely without basis to assume that people saying they support it have a similar vision. Since many of the politicians using it are light on the details we end up stuck having to assume.

Just thought of one other point about the Canadian system, which fits into Great Antibob’s comment that the single payer system would be more efficient, so private companies can’t compete.

My understanding (open to correction) is that there is no ban on private payments to a doctor in our system(s), whether by the patient or by an insurance company, so long as the doctor is not also billing claims to the public system for other patients. That is, the doctor is entirely in the public system for all patients, or entirely out of it for all patients. If the doctor wants to go private, there’s nothing stopping that, but the doctor can’t also be part of the public system.

And that simply is not profitable, for the doctor or the insurance companies. Why would a patient pay large sums to the doctor, or premiums to the insurance company, when they can get the coverage without payment through the public system?

That’s my understanding as well, and while it does serve as a disincentive to keep physicians from going private, it also make a lot of sense in certain ways.

Consider a physician who is employed by a pro sports team, for example–he or she has likely negotiated a nice salary with the team, without the need to accept public patients. I’m also pretty sure that Canadian Forces physicians draw a salary from the Forces, and do not bill according to a schedule of benefits. There are likely other examples where it makes sense for a physician to opt out of the public system and practice privately for an employer, but the point is that having an opt-out provision in the program allows physicians to practice privately for employers who are willing to pay them to do so.

The other exception is the physician who performs procedures that are medically necessary as well as those that are not. The only examples I know of are dermatologists and plastic surgeons, who are permitted to perform cosmetic procedures for patients paying privately while still remaining on the public billing system for medically necessary services. That is certainly the case in Ontario, and I’m pretty sure in other provinces, too.

Some may wonder about gray areas where it may not be clear if such a procedure relating to appearance is genuinely necessary or just “cosmetic”. The answer is that placing trust in the physician as the arbiter and gatekeeper to medical treatment is a well established tradition that has worked well in this country, and though physicians may on very rare occasions be tempted to violate that trust, they do so at great peril.

Gentlemen, you are likely forgetting that we once had the huge US insurance companies already operating up here, prior to the adoption of Canadian medical insurance. I myself, as a klutzy kid, was treated under my Dad’s private insurance (Aetna), in the ER of Sick Kids in Toronto (where I had two surgical procedures prior to age nine), plus a couple of other hospitals where my broken bones were attended to.

Insurers like Aetna operated here–heck, my Dad worked for Aetna, and so our family had gold-plated health insurance back prior to 1968 or whenever Ontario went to OHIP. But when all medical insurers (Canada Life, Manulife, Aetna, etc.) could no longer underwrite major medical because of the law, they simply diversified into supplementary health insurance, along with their existing lines of whole and term life insurance (and in Aetna Canada’s case, into life and casualty and surety). See here:

I am unsure why you gentlemen feel that US insurance companies are anxious to get a toehold into the Canadian market. They already had a toehold into Canada that ended back in the 1960s. They lost it, and they know that they are not going to get it back. They know that their major-medical insurance policies, under our law, will not put their policyholders at the front of the line, so that’s not a selling point. Really, under Canadian and provincial law, I’m unsure what their selling point would be.

This is not quite true. There are procedures for which I have an alternative. My doctor orders a battery of blood tests every year. He hands me a list. I have a choice. Go to a hospital, wait for an hour or two (or three sometimes) get it done for free. Or go to a private clinic that charges me $500, send the bill to my supplemental insurance company and get back $400. I would go the hospital; my wife wants to jump the gun at the private clinic.

At one time I had a high PSA (around 8, contrasted to under 2 the previous year) and the doctor wanted a biopsy. I could wait 6 months and have it in a hospital or pay $200 at a private clinic. I chose the latter. The clinic was about 2 blocks from the hospital. After they did the biopsy, they gave it to me to walk over to the hospital with instructions of where I should take it. Which I did and the results (benign) came a few days later. What was that all about? The hospital did the diagnosis. That was 15 years ago and I stopped doing PSA tests after that.

However I should add that that private insurance is really my former employer acting as a self-insurer. My premiums always exceed by a fair amount what I collect from it. I do it because it includes out-of-the-country insurance. My neighbor and fellow faculty member had a heart attack attending a meeting in New Orleans and they paid something like $25,000 to medevac him to a Montreal hospital.

No, not forgetting. I am well aware of that, and so are the insurers.

They’re anxious to get back because health insurance is a $1 trillion market for them in the US, so the Canadian market is roughly a $100 billion opportunity for them – all of it net new income additional to all the things that any US health insurers still here are already doing. Which is why, far from doubting that the US health care industry – particularly insurance – constantly exploits every opportunity to get back into Canada, I’ve typically drawn the analogy that it’s somewhat analogous to the entire Atlantic ocean being held back by a small beaver dam. If the dam isn’t scrupulously maintained and it’s breached, we’ll be overrun by an unstoppable flood of for-profit health care entrepreneurship. We already have American health care providers here, often operating on the fringes of the law, and if we had two-tier health care, they and the private insurers who enable them would overrun the place.

Bear in mind that when the Trumpeter was speaking in Britain about a possible US-UK trade deal, post-Brexit, he said that access by US health insurance companies to the UK health market would have to be a condition of the trade deal. That would mean the end of the National Health Service.

The US health insurance companies are only interested in making a profit. Canada and the UK are untapped markets for them.

OK, MOST Polticos mean that everyone would get Part A for free. They could buy Part B as usual, based upon your income.

There would still be a need for Medicare gap insurance. Not everyone would want it, of course. Thats’ Part C & D.

And, just like in Canada or GB, there still would be private hospitals and Doctors for those who want first class priority care and dont care what it costs.

Right. If you can pay the price you get premium care RIGHT NOW.

Except I don’t think we have any private hospitals in Canada that aren’t part of the public health system.

There are some private hospitals, but if they take any patients on the public system, they get paid the public rates and aren’t allowed to charge higher rates to other patients.

And I’d be surprised if there are many doctors who work entirely off the public system and only take paying patients - the economics are against it, as I mentioned earlier.

It’s becoming a concern in the UK and also in Spain, where people are massively buying into the notion that “private is better” with exactly no proof and despite several instances of fraud by private insurers. In general, this fraud takes the form of sending patients to the public system and then having the bollocks to charge for it (I already paid my taxes, you leeches).

I’ve recently encountered a spate of articles on cross-country fraud, in fact: UK insurers whose coverage in Spain consists of less than what people would get on account of being UK residents (through European Social Security). Heck, less than what people would get on account of being human beings: where someone without that “added insurance” would be sent to the nearest appropriate public hospital and forwarded to another if necessary, the insurers add a layer of paperwork and a series of procedural and mental brakes which make patients’ situation worse by difficulting the transfers.