How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

Excerpts from representative Comments:

“Well, of course! But isn’t the ACA a step in the right direction?”

“Medicare for all would be far superior to any other plan, which was why it was killed before it could get out of committee.”

“ahh, if only the Republicans had not fought the entire idea so hard, that would have been the ideal solution.”

“A big concern, that not a lot of people know about-more and more doctors are refusing to take on new Medicare patients.”

“Medicare is an existing program that could simply be expanded and fixed a bit where necessary. This seem like a much much more common sense approach than a whole new bureaucracy.”

“Authors often site Medicare’s discount rate and admin cost. Both are a mirage. The Medicare discount rate is so low that it does not pay lights on costs.”

“It’s true that Medicare is already set up very well and that a minor legislative action could make it available to all…ObamaCare puts more power into the hands of private insurance companies and BigPharma, and how do you think those will use it?”

“Of course “single payer” would be better, but was not proposed in anticipation of Republican opposition to “socialized medicine” and their insistence on the primacy of a role for the private health insurance companies. As to Medicare for all on a voluntary basis, it still does not answer what to do about the uninsured who get sick. Who pays for them?”

“DUH! How soon could America deal Rich Smith and “Medicare for All” for Ovomit and OvomitCare?”

“Of course Medicare for all makes sense.”

“Regarding hospital charges vs. what insurers pay ($24,000 vs. $4000). . .that is a HUGE problem in healthcare that in a way, single payer WOULD correct.”

“You are dreaming in theory. The Complete Lives System that withholds medical care from infants, special needs children and reduces the amount of medical care available each year by a dollar amount to anyone over 50.”

“the money saving answer is to repeal the ACA and start over with insurance pools and letting those who could afford insurance and don’t have it suffer for their sin”

“PS: don’t forget that Obamacare expands IRS and gives IRS much control over your healthcare”

“Physicians often limit total Medicare patients, and broadening the program will just further stratify medical care from those who have the money to pay and those who do not.”

“Medicare for all would work but only if the discounts were renegotiated.”

“Obamacare will be the destruction of America !! Obama wouldn’t have it any other way !!! Hail to ol RACE BAITER IN CHIEF !!!”

“More and more doctors are refusing new Medicare patients since the pay is too low and it takes too long to get reimbursed. If we moved to a Medicare-based system, what would happen? We would all have insurance, but it would be next to impossible to find a doctor that accepts the insurance. Yeah, that’s smart. Real smart.”

“You don’t have the right to infringe on someone else’s liberties and that is exactly what happens when the government taxes one person to give it to another. Freedom is the answer. God Bless America.”

“This is exactly what Dr. Ben Carson has been proposing the past two years. EACH and every American citizen would have a medicare spending plan and credits to that fund would start immediately upon birth.”

“i think eveyone knows that single-payer is the only efficient answer, but the scum in washington d.c. won’t allow it – they their souls to big pharma”

“Great article. This is so straightforward anyone could understand it. Maybe even congresspeople?”

“Of course this is a step in the right direction, and someday a single payer system will prevail.”…

About The Motley Fool

The Motley Fool is a multimedia financial-services company dedicated to building the world’s greatest investment community. Reaching millions of people each month through its website, books, newspaper column, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company’s name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king — without getting their heads lopped off.

This article is truly remarkable because of its source. The Motley Fool “champions shareholder values and advocates tirelessly for the individual investor.” Although they didn’t get everything right (they would include private insurance options and would have no requirement to even be insured), nevertheless this is a particularly strong statement for Medicare for All from a Wall Street source that is just now joining the parade.

Perhaps even more remarkable are the comments posted in response to this article. Considering that these comments are from the investment community, there is strong support for Medicare for All. Inevitably, as with most comment sections, there is a representation of ill-informed, ideologically-driven and sometimes belligerent comments, but those can be ignored.

We should take home from this the lesson that many in the investment community understand that Medicare for All really does make sense from the business perspective. We should tailor our message accordingly.