The call for “Medicare for All” sounds really good until one recalls the tagline promises of the Affordable Care Act: If you like your doctor and plan, you can keep them, rates will stabilize and so on. None of that materialized.
What we ended up with were fewer plan options, fewer physician options, higher out-of-pocket costs and a 400 percent rate increase unless you qualified for tax credits. Pre-Obamacare, we had eight or more health insurance providers throughout the state. Today, there are two providers on the Clark County exchange, both of which are HMO only. Rural Nevada has it worse with only one. How can we trust the government when they say Medicare for All is the solution?
Let us also consider how Medicare currently works and what changes are being proposed.
Medicare currently covers 80 percent of health care costs. Outpatient prescriptions are not covered. To be fully covered, each Medicare enrollee must acquire a “drug benefit” and supplemental coverage (to cover the 20 percent). With myriad options to choose from, we have the ability to buy the broadest coverage available in today’s health insurance market. We also have the option of buying down to reduce our costs.
Medicare currently costs the federal government roughly $950 per insured per month — as mentioned, covering only 80 percent of medical costs and zero coverage for outpatient drugs. The plan proposed by Bernie Sanders would include 100 percent coverage as well as outpatient prescriptions. His plan also includes additional services currently not included with Medicare, such as vision and dental coverage. The real question then is how much more will this really cost us?
Currently, every eligible Medicare recipient pays into the system for 45 years. The cost is 2.9 percent of your income, which is split 1.45 percent from you and 1.45 percent from your employer. If self-employed, you cover the entire 2.9 percent. As an example, if you make $40,000 annually, you would pay approximately $62,055 into the system over the same 40-year span. This does not cover or address any charges for supplemental plans purchased once Medicare benefits are received. This leads to the real looming question: What will this really cost the average individual who has never paid into the system?
With 100 percent coverage — which will include pharmacy benefits — just how can we afford it? The numbers we are hearing are far greater than the average family now pays.
Sanders claims that one way to cover costs would be to reduce the medical reimbursement by 40 percent. But as a result of the ACA’s reduced reimbursement policies, there are fewer physicians and wait times have increased. When touting government-run health care systems such as the one in Canada, Sanders and others never mention the wait times Canadians experience trying to see a doctor or to have medical tests. Reducing doctor and hospital reimbursements will produce the same results here. Are you willing to wait six to nine months for your much-needed MRI?
The unspoken health care solution is very obvious when dissecting the average “explanation of benefits” or EOB as they are called. That being true transparency. Transparency could lead to a major reduction in net costs for those with or without insurance.
The charges by hospitals, testing facilities and medical offices always start off higher and end up much lower due to negotiated contract discounts. Why not just cut to the chase and implement regional pricing? Look at the net reimbursements across the board for those with insurance and make that the real cost and eliminate all the repricing? Why not post charges for services, like retailers do for the products they sell?
An educated consumer is a happy consumer. Why can’t medical pricing be transparent enough to allow for us to make educated decisions across the board? This one change would eliminate the necessity of “bigger government” and would lead to reduced insurance premiums and out-of-pocket expenses.
Patrick Casale is managing partner of the Mutlicare Group, specializing in all aspects of employee benefits. He writes from Las Vegas.