Medicare Expansion (Medicare For All) - The Effects

By: Agnus Smith
Published: Thursday, October 04 2018
Last Updated: 4 years ago

Of all the political issues that currently affect our nation, one of the more important matters is the state of the healthcare industry. It is no exaggeration to say that there is a crisis on the subject of healthcare in America. Costs have spiraled upwards for decades, creating a situation where healthcare is simply unaffordable.

What caused this? Who is to blame? No one seems to be asking those questions. And that might be for the best since solutions are infinitely more important than the question of blame.

According to the American Medical Association, Americans pay more for healthcare than the majority of the civilized world. In 2016, the United States spent about 17% of its GDP in combined healthcare costs.

When you consider the sheer size and scope of the American economy, this is a very significant sum of money. For the average American, health problems must routinely be put off for lack of money to pay for their care. There are many who find this situation to be unacceptable.

What Is Medicare Expansion (Medicare For All)?

Medicare expansion is a political idea that has been proposed by some as a way to fix America's ailing healthcare system. The idea is a relatively simple one, at least on the surface. The idea is to take Medicare, which is currently available mainly to older Americans, and expand it into a national healthcare program. Naturally, there are some significant issues that come up when you take a specialized program like Medicare and extend it to the entirety of American citizens.

Gaining Popularity On The Political Front

The idea of Medicare expansion is a controversial one, but some sources indicate that support for this idea is very high. According to many media reports, a recent study determined that roughly 70% of the public are in favor of the idea. However, a single study is not conclusive evidence of the program's overall popularity. Also, the results of this particular study can be misleading.

In this study, Medicare expansion was referred to as a single-payer healthcare system. The fact is that most people do not know what that term means. Many people would probably assume that it is just a simple, straightforward system where each individual purchases services on an open market.

The Debate

Those who favor Medicare for all argue that Medicare has already proven to be an effective system for managing the healthcare costs of older Americans. Thus, they argue that it can just as easily serve the whole nation.

Those who oppose an expansion of Medicare point out that the tremendous costs of such a program could bankrupt the entire nation, and could also result in a dramatically reduced quality of healthcare.

Proponents of Medicare for all also point out that our current system is completely broken, and that there is therefore little risk in trying something radically different. Proponents also argue that the current system gives the insurance companies no incentive to put people over profit, resulting in poor outcomes for many.

Opponents of Medicare expansion counter with the claim that a government-run healthcare system would likely have the same problems, but with no possibility for competition. Under the current system, one can shop around for the best rate. A government-run system would have no such option.

How Expanding Medicare Would Affect Current Beneficiaries

It is impossible to fully describe the ways in which Medicare for all would affect current Medicare beneficiaries because this is theoretical legislation that has not been passed. However, most draft plans introduced in relation to this idea include a provision that would end the age tax. The age tax is not really a tax, but a de facto situation. Insurance companies tend to charge higher premiums for Medicare beneficiaries who are between the ages of 50 and 64.

These rate hikes are based on risk assessments, just like nearly every aspect of the insurance business. So, Medicare beneficiaries between the ages of 50 and 64 would likely see a reduction in their premiums.

The Potential Cost Of Medicare Expansion

It goes without saying that the dramatic expansion of Medicare would require a large source of funding. The extra money would most likely come from new taxes and tax increases. Medicare for all will do nothing to address the root of the problem, which is the excessive cost that has come to characterize the healthcare industry. If the root problem is not addressed, it will likely become worse and worse.

Before long, the government will not be able to absorb the costs, even if they hike rates to the highest level that they reasonably can. From a neutral standpoint, this seems like an idea that could work, but only if undertaken in a responsible and fiscally viable fashion.