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Feb
27

Medicare for All – the three versions

There is no consensus about what MFA is – and that makes it really easy for supporters and opponents to convince the uninformed it is great or awful.

They do that by picking out whatever they think you’ll love/hate – even if it has nothing to do with MFA. Then, they yell about that at maximum volume in an effort to convince you that the whole thing is terrific/awful.

Before we decide if MFA is worse than the stomach flu or better than a teenager that actually listens to mom and dad, let’s spend two minutes understanding what MFA is.

There are three general “versions”, each coming in multiple variations and with different tweaks. The basic differences are:

  • who is covered
  • what types of healthcare are included
  • is there a role for private insurers
  • what mechanism/payer system is used.

Notably, many of the proposals aren’t exactly precise on where the dollars to pay for all this will come from.

There’s the Bernie Sanders version which is basically – every kind of healthcare service anyone could think of for free for everyone – provided only by the government, with no private insurance allowed. Another even richer version is to be announced today – which is even more generous – and hyper-expensive.

My take – completely unrealistic for several excellent reasons which I’ll get into in a future post.

Then there’s Medicare for some – which would allow older folks to “buy in” to current versions of Medicare, while leaving employer-based insurance alone. A similar proposal, known as the “Public Option” was part of the ACA until the Democrats took it out in an unsuccessful effort to get Republican support for ACA legislation

My take – this makes more sense for multiple reasons; again we’ll dive into this next week.

Some – including your author – have pitched Medicaid for some or all. To me this is more viable as it heavily involves states, wouldn’t affect federal taxes nearly as much as Medicare for All, and uses an already-existing program that is much simpler than Medicare.

What does this mean for you?

A gentle reminder – yes, there are issues with all of these. But what is the alternative? Our current system is a mess and is getting worse by the day. If you object, what’s a better solution?

What does this mean for you?

Change is coming – make darn sure you understand what it means for you.


2 thoughts on “Medicare for All – the three versions”

  1. I would like the Congress to take a critical look at the ACA. That is still in place and has many good points that we can build on. Millions of dollars and time were spent on this bill and implementing it into law since it was established in 2010. Now 9 years later we are letting it go to waste. That is a disgrace. MFA would cause us to start over. Get a group of experts together and work on the ACA.

  2. Response to Ann Llewellen: As a practicing income tax professional, I can say without hesitation that the interplay between the ACA as it exists today and a taxpayer’s tax return is a nightmare for anyone who does not have full-year coverage thru something other than the Marketplace (i.e., Obamacare). Penalties for non-compliance are difficult to understand or compute for the layperson, and even harder to predict. I recently had a client (annual salary of $44,500) who would have received a modest refund but ended up owing almost $7,000 because his boss decided to give deposit his (about $3,800 gross) January 2019 monthly paycheck a day early on December 31. This caused him to have to repay the entire Advance Premium Tax Credit. The APTC allows lower-income taxpayers to use their credit throughout the year to reduce their monthly premiums, rather than getting the credit in a lump sum when they file their return. My client’s effective income was no different than when he signed up for insurance at the start of the year, yet a $3800 difference in ‘taxable income’ created by a 1-day timing issue caused a $7,000 difference in cost. That is a disgrace.

    I like the concept of Medicare for all from a simplicity standpoint: one payer, existing premium collection mechanism, established claims handling and payment processes, and the availability of private insurer add-on policies in a wide variety of flavors. But I also like freedom of choice. I propose a compromise: Employers must choose whether to enroll their employees in a MFA that causes their FICA costs to go up substantially (and the FICA costs of their employees to go up but less so), or to provide a private-insurer group health policy that meets certain federal norms. The same choice would be given to self-employed individuals and those between jobs. Net result: coverage for (virtually) all.

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Joe Paduda is the principal of Health Strategy Associates

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