What Does Bernie Sanders’ ‘Medicare for All’ Mean?

Medicare
Universal health care is one of the top priorities of Democratic presidential candidate Bernie Sanders.

Among the developed countries that are members of the Organization for Economic Cooperation and Development, the United States stands alone as the only country without universal health coverage for its citizens. If Democratic presidential candidate Bernie Sanders has his way, that could change.

Although Sanders’ early showing in the polls has been surprisingly strong, the winner of 2016’s presidential race won’t be decided for several months. And during that period the political fortunes of the diverse candidates in the race will undoubtedly undergo significant changes. However, if Sanders should prevail, he has made clear that one of his primary goals will be a universal health plan he has dubbed “Medicare for All.”

So what does “Medicare for All” mean? In introducing his comprehensive health plan in January 2016, Sanders had kind words for the Affordable Care Act, one of the Obama administration’s major accomplishments. However, Sanders pointed out that while Obamacare has secured health care coverage for millions of previously uninsured Americans, as many as 29 million still have no health care insurance.

Funding the Sanders Plan

The projected $1.38 trillion annual cost of Sanders’ universal health care plan would be covered by a combination of individual and employer premiums along with tax increases, most of which would target high-income Americans. Employers would pay a 6.2 percent income-based premium, raising an estimated $630 billion a year, while households would pay a 2.2 percent income-based premium, raising another $210 billion annually.

Among the higher taxes contemplated under the Sanders plan would be progressive income tax rates on high-income Americans, which would raise an estimated $110 billion a year. Income between $250,000 and $500,000 would be taxed at a rate of 37 percent, while the tax rate on income between $500,000 and $2 million would jump to 43 percent. The tax rate on income between $2 million and $10 million would increase to 48 percent, and all income above $10 million would be taxed at a rate of 52 percent.

Sanders’ health care plan would represent a much more comprehensive national health plan than that provided under Obama’s Affordable Care Act.
Americans Pay More, Get Less

This high number of uninsureds is particularly ironic in a country that spends more of its gross domestic product on healthcare than any other country. Data from the OECD indicates that the United States is spending $8,713 a year on health care for every man, woman, and child in the country. That’s a whopping 16.2 percent of GDP spent on health care. Despite these massive outlays of money, millions of Americans remain without health coverage, and the premiums for those who do have insurance are skyrocketing with little promise of relief in the foreseeable future.

Under Sanders’ vision for the future of health care insurance, all Americans would have access to health care, no matter how much or how little they earn. “Medicare for All” envisions a single-payer health care program administered by the federal government. As described at Sanders’ website, the program would cover the entire spectrum of health care services. Specifically, that encompasses inpatient and outpatient care, preventive and emergency care, primary and specialty care, as well as long-term and palliative care, vision, hearing, oral health care, mental health and substance abuse services, prescription drugs, medical equipment, supplies, diagnostics, and treatment.

No More Networks

If “Medicare for All” should become the law of the land, patients would be able to consult the health professional of their choice and would no longer be restricted to those within an insurer-circumscribed network. “As a patient, all you need to do is go to the doctor and show your insurance card,” according to the outline of “Medicare for All” at Sanders’ website. “Bernie’s plan means no more copays, no more deductibles, and no more fighting with insurance companies when they fail to pay for charges.”

Sanders’ plan for universal health care clearly would carry a hefty price tag — $1.38 trillion a year according to the candidate’s website and much higher according to others. However, one of the ultimate goals of Sanders’ plan is to bring America’s health care spending under control. The United States currently is spending roughly $3 trillion a year for health care in all its varied forms. Sanders claims that his plan, if enacted, would save Americans $6 trillion a decade.

Savings Foreseen for Workers and Employers

Breaking down the projected savings for Sanders’ health care plan, his website claims that the average American working family in 2015 paid $4,955 in premiums to private health insurers and an additional $1,318 in deductibles. Under his plan, a family of four with an annual income of $50,000 would pay only $466 a year in the single-payer program, saving about $5,800 a year.

There would be big savings for employers as well, claims Sanders’ website. The average annual cost for covering a worker making $50,000 a year and his family would drop from $12,591 a year to $3,100, a major savings.

Hillary Clinton, Sanders’ opponent for the Democratic presidential nomination, favors retaining Obamacare but expanding it to ensure greater health care coverage.
Clinton’s Health Care Plan

So what does Sanders’ opponent for the Democratic presidential nomination propose for health care if she were to become president? Hillary Clinton would retain the framework of Obama’s Affordable Care Act but make a handful of modifications to improve the coverage under Obamacare. She proposes the following four key changes:

1. In addition to the free preventive care provided under Obamacare, Clinton’s plan would allow three free doctor’s visits each year.

2. Families whose out-of-pocket medical spending exceeds 5 percent of their annual income would be eligible for a tax credit of up to $5,000. For those who qualify for this tax credit, it would replace the current tax code provisions that allows a deduction for medical costs in excess of 10 percent of adjusted annual income.

3. The Clinton plan would put a cap on health care costs incurred for out-of-network emergency and hospital services. Under this cap, insureds would not be required to pay more than their normal in-network charges.

4. Monthly out-of-pocket prescription drug spending would be capped at $250 per individual. Under Clinton’s plan, Americans would be permitted to buy non-generic versions of drugs from Canada. To help fund this prescription drug provision of the plan, Medicare would be allowed to use its very considerable buying power in negotiating drug prices, which should result in significantly lower prices for prescription drugs.

Some Tax Breaks Would End

Sanders’ plan would raise another $92 billion a year by taxing capital gains and dividends at the same rate as regular income. By limiting tax deductions for rich Americans and instituting the so-called Responsible Estate Tax, an additional $36 billion would be raised annually. Finally, existing tax breaks that subsidize health care would be eliminated, resulting in increased revenues of $310 billion.

Despite a promising early showing by Sanders, the road to the Democratic nomination for president is long and arduous, and whether he can convince American voters to opt for his brand of Democratic socialism remains to be seen. However, even if Sanders should eventually claim the White House, getting his radical universal health care program through Congress would be a formidable challenge. Obama’s health care program was far less radical, and he had a daunting task selling that plan to a Democratic-controlled Congress.

If you’d like to read additional articles about topics of interest to health consumers, check out our blog.

Don Amerman is a freelance author who writes extensively about a wide array of nutrition and health-related topics.

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