“Single Payer” “Medicare Free For All” Nothing Is Free

By Bill Buth

‘Single Payer!’ ‘Medicare for All!’ What does that even mean? No one seems to be able to define it except to say that they envision eliminating our health insurance and health care markets, and opening the current Medicare program to all US citizens, regardless of age. Can anyone explain the mechanics of how that would work? I think that most people under the age of 65, including those calling for Medicare-for-All, don’t even know how the Medicare program actually functions now. Last year, at 65, I ‘qualified’ for Medicare. That and the fact that I’ve had about 3% of my gross pay taken out of every paycheck throughout my entire working career to fund Medicare. And it is a lot of money. For example, someone who has averaged making $40K/yr for 45 years of a work life has ‘contributed’ about $54,000 to the Medicare system. So, at 65 years old, most Medicare participants have already paid in quite a bit. So how is someone, say a newborn, going to make up that money to join Medicare and ‘catch up’ to the seniors who have already contributed for decades? Would it be fair to retirees that newbies get in for free? Where is the money going to come from to pay for the newbies’ medical care if they have never contributed?

Unfortunately, I think a lot of people envision Medicare-for-All as a sunny utopia where patients can visit friendly doctors and gleaming hospitals at will, with no co-pays, no bills, and no-cost prescriptions, and somehow it will be paid for by someone else.

Bad News: in no way is Medicare like that now, and I can comfortably say without fear of contradiction, it never will be.

Enrolling in Medicare was eye-opening to me. For most people, Social Security benefits also start the same year as Medicare. Your Social Security benefit is based on a formula using your lifetime contributions (through forced payroll deductions), etc. Say your SS benefit is $1000./month. On the first month of your Medicare eligibility, Medicare will ‘charge you’ about $105./month, and your Social Security benefit is reduced by that much; now your Social Security check is just $895./month. You don’t have any choice in this, even if you never use Medicare.

However, with basic Medicare, only 80% of your medical expenses will be made for you. You are responsible for the remaining 20%. So if your doctor bills Medicare $200. for your annual physical, you will have to pay your doctor $40. Or, if you have a hip replacement that costs $20,000., your cash obligation will be $4000. And, there is no deductible or maximum ‘Out-Of-Pocket’. There is no top limit to your 20% obligation, as there would be with a traditional Health Insurance Policy sold by an insurance company.

To prevent financial catastrophe, most people get a supplemental plan to cover part or all of the 20% that Medicare does not pay. And this is where it can get a little confusing.

Low income people can opt to get a ‘Medicare Advantage’ plan. These are very low cost, and sometimes free to join. The plan picks up most, if not all, of the 20% balance, but they are usually limited to a couple of local clinics, a hospital, and a handful of doctors. If you get a heart attack out of state and have to visit a facility that is outside of your system, you will have to pay 20% of whatever charges are billed to you. Another option is to purchase a ‘Medicare Supplement’ plan. There are several of these, depending on how much you want to cover, and how much you want to pay. The Plans are lettered, A to F, the ‘F’ plan generally covering all your Medicare costs that Medicare doesn’t pay. Medicare strictly defines what is in each of these plans, which are typically offered by many insurance companies in a given state. The only flexibility the insurance companies have with these plans is price. Here in Arizona, I have an ‘F’ plan, which costs me about $150./month. In other states, it might be more, but not a lot less. Medicare Supplement plans do not cover drugs, so because I want a drug plan (Medicare Part D), that costs me an additional $40./month. And even with Part D coverage, you will wind up paying for prescriptions, just not as much as you would without the coverage, and there are some drugs they won’t pay for at all. So, when I add up the monthly costs for the Supplement Plan ($150.), and the Drug Plan ($30.), that totals $180. When I add in the $105. that Medicare grabs from my Social Security account, my total monthly ‘bill’ for Medicare is $295./month. As you can see, there is no free lunch. So figuring a family of four in a ‘single payer’ system or Medicare-for-All scheme would be paying $1180./month for coverage (4 X $295.), or over $14,000 every year. And assuming that everyone in the family-of-four is under the age of 65, they would not have already paid the average of $54,000 each into Medicare that most seniors have already paid, for a family total (deficit) of $216,000.!

I don’t think that many families, even upper middle-class, could cough that up easily.

Some might say that lower income people could be ‘subsidized’. But all that would do is take money from Taxpayer A and give it to Taxpayer B, not a happy solution.

Medicare, even with a Supplemental Plan, does not cover vision or dental at all. Some of the Medicare Advantage Plans will pay for some vision and dental, but very little.

But the biggest problem of all is the fact that Medicare is slowly but surely running out of money. In its current state, it is not ‘sustainable’ as the politicians say. The money coming in is barely enough to cover the money going out, and that will only increase dramatically if nothing is changed. Some have called for higher FICA taxes (these are the taxes that are deducted from every paycheck to fund Social Security and Medicare). But they now total about 15% of gross pay. If politicians increased the FICA tax, there could be mass revolt, as this would directly reduce the take-home pay of everyone that gets a paycheck. The other way the Federal Government has to slow the collapse of Medicare is to reduce payments to doctors, hospitals, etc. But many doctors have realized that, after their expenses, what Medicare gives them now makes it not worth it to perform many services. And as Medicare itself will tell you, there are many doctors and facilities that won’t take Medicare at all. This is mainly because of the stingy reimbursements, but also the cost of hiring additional employees for the sole purpose of processing Medicare claims. The thing is, by telling doctors and hospitals what it will pay for every procedure, they are performing the very definition of price fixing. Just imagine your boss telling you that she was reducing your pay because she can. Same work, less pay, an outrage. But that is what doctors face continually with Medicare.

Many say if we just reined in the Waste, Fraud, and Abuse from Medicare, it could have a chance of running in the black. However, if the Federal Government had the ability and motivation to do that, it would have done so already. It doesn’t have enough of either. Medicare is already a fantastically bloated bureaucracy that is easily fooled into making billions of dollars of fraudulent payments.

The Medicare situation, even as it exists today, can’t be fixed by tinkering around the edges or by creating accounting gimmicks to convince the gullible that there is a ‘lockbox’. Medicare needs major reform just to remain above water, but our cowardly politicians on all sides are scared to death of bringing on the wrath of of special interests and a naive but loud media.

And what about people that currently have employer based insurance? The Medicare-For-All folks don’t talk about them, but they are the largest group (by far) of those currently insured. Will they be able to keep the insurance they get through their job, or will they be forced into an inferior Single Payer program? It’s not really single payer if some people are allowed to continue their employer-based insurance, but every one else is forced into Medicare-for-All.

Unless our Beloved Leaders can take a chance and totally reform Medicare for the existing participants, we’re screwed. And to extend this failing program to all would be a continuous train wreck.

If you want to have a debate about reforming health care and the way we pay for it, please do some research on what you think should happen, and not just regurgitate feel-good slogans that don’t make economic sense.

About Letter to the Editor 171 Articles
Under the leadership of Editor in Chief Huey Freeman, the Editorial Board of the Arizona Daily Independent offers readers an opportunity to comment on current events and the pressing issues of the day. Occasionally, the Board weighs-in on issues of concern for the residents of Arizona and the US.