Although my column from spring of 2016 covered this subject, I am visiting it again because Vermont Senator Bernie Sanders is preparing to introduce a health care bill that he refers to as “Medicare for All.”
This phrase is often used as a short-hand version of a single-payer, government-centered plan that would give comprehensive coverage to everybody. It is a misleading misnomer. This column is not meant to be an argument for or against single-payer, but merely an explanation of why labeling it as “Medicare for All” is inaccurate.
The problem with the name “Medicare for All” is that it is not at all consistent with what Senator Sanders himself describes as his idea of the perfect plan. He proposes a plan that would rely on taxes for payment and have few if any deductibles, co-pays, and coinsurance. As any regular Medicare beneficiary could tell him, this is not Medicare.
In fact, with Medicare, a person would need no fewer than two private insurance policies in order to have the best coverage.
First there is the premium. Most beneficiaries pay nothing for Medicare Part A because they have paid for it all of their working lives. Part B will cost most beneficiaries $109 a month in 2017 with those new to Medicare in 2017 paying $134. Beneficiaries with more than $85,000 in income ($170,000 for a couple) will pay higher premiums.
Next we have deductibles. For Part A, which covers primarily hospitalization and skilled nursing facilities, the deductible for a hospital stay of one to 60 days is $1, 316 per benefit period. If a person is readmitted within 60 days of discharge, there is no further payment; however, after that 60-day period, the deductible must again be paid. Beneficiaries who have hospital stays spaced throughout the year might pay this deductible several times. The skilled nursing facility is free for the first 20 days and $164.50 per day thereafter.
The deductible for Part B, which covers doctors’ visits, lab work, durable medical equipment, and supplies, is just $183 per year, paid at the first use. After the deductible, Medicare pays 80 percent of the Part B costs and the beneficiary pays 20 percent.
There is more. Beneficiaries are responsible for the first three pints of blood they receive and for days over 60 that they are in the hospital at one stay. Medicare Parts A and B do not cover self-administered drugs, which are the overwhelming majority of drugs taken by Medicare beneficiaries.
The two private insurance plans that Medicare beneficiaries need to make Medicare work best for them are a Medicare supplement or Medigap and a Part D drug plan. A Medicare supplement policy helps a beneficiary pay all or part of the deductibles, co-pays, and coinsurance charges noted above that Medicare approves but does not pay in full. The Medicare supplement can begin at 65 with a modest monthly premium below $100 but increase with age so that beneficiaries in their 70’s and 80’s might be paying over $200 a month in premiums. Beneficiaries who do not buy a Medicare supplement policy when they first qualify may find that the insurance companies can refuse to sell them one later or charge them more if their health is not good.
Having written at length about Part D drug coverage, I will not elaborate on it here. Which drug plan is best for beneficiaries depends primarily upon what drugs they take. A few cheap generics will be less expensive than several expensive brands. The premium is generally higher for plans covering more brand name drugs; and the doughnut hole, which is determined by drug costs, comes much sooner with expensive drugs. A drug plan can cost as little as $204 per year or over $4,000 depending upon what drugs a beneficiary takes.
It should be obvious that although Medicare is good insurance, it is not the plan that Senator Sanders is promoting. Additionally, “Medicare for All” implies that the new plan will merely involve enlarging the Medicare database size to accommodate more beneficiaries. Instead, it is a total revamping of our health insurance system that will have to cover those with insurance from employer coverage, private coverage including the Affordable Care Act, Medicare, and Medicaid along with those not covered at all and to devise a means to pay for it all. It would be a long, winding road with many a twist and turn.
I suggest that Senator Sanders retire “Medicare for All” and start using a more accurate name, such as single-payer, and that he be more forthcoming in how this new system would be implemented, including when certain key functions will be successfully activated, what it will cost, and how it will be paid for.
Deena Flinchum is a retired IT professional who has lived in the New River Valley since 2002. She serves on the board of the NRV Agency on Aging and as an RSVP volunteer. She also serves the Agency on Aging as an insurance counselor.