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Medicare for All? Not Really

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ThinkAdvisor has been running articles about a top Democratic contender’s support for a government-run, single-payer health care system that would outlaw private health insurance.

The candidate, Bernie Sanders, calls this system “Medicare for All.”

(Related: Why Single-Payer Insurance May Be Closer Than You Think (and What to Do About It))

Is this system really Medicare for All, or something else?

What Sanders is actually proposing is Medicaid for All, but he’s afraid to say that, because of the connotations of the word “Medicaid.”

The original Medicare program covers only 80% of the medical bill. If we had original Medicare for all, that would mean that the individual would be required to pay the 20% unlimited coinsurance amount. Today, that 20% coinsurance bill can be paid with Medicare supplement insurance, or avoided with the use of a Medicare Advantage plan. Sanders, however, has proposed additional requirement that would eliminate the 20% out-of-pocket costs entirely. In other words, the benefits would look like Medicaid benefits.

On July 3, Sanders said that his plan will save money overall by lowering health care costs. For whom he never says.

Insurance companies all need to have reserves. Those reserves must be in compliance with state rules, or else the insurance companies cannot function.

So, where are the federal government health insurance reserves? Where will the money come from to fund this idea if there are no premiums?

Sanders says Americans could erase $20,000 of annual private health expenses for $10,000 in additional taxes.

Well I respectfully disagree, because government estimates never seem to get it right, and Social Security is proof of that. Social Security has about $2.89 trillion in reserves, as of the end of 2018, but those reserves are expected to be exhausted by 2035.

Unlike insurance company reserves, Social Security’s reserves are in government savings bonds only. So, what happens when the amount of money being paid to recipients exceeds the amount coming in from payroll taxes?

When I was in Washington, I asked my congressman’s office that question. The answer was: From the federal government’s general revenue. But the federal government is running a deficit. Taxes will eventually have to be raised to cover the expenses.

At what point does this become unaffordable? And we have yet to talk about getting people healthier.

Finally, I ask, what is the real reason that Sanders wants a single-payer system? My answer is control.

Prices are lower when we have competition. A single-payer system doesn’t allow for real competition!

— Read The Real LTC Finance Problemon ThinkAdvisor.

Pen (Image: iStock)

Gary M. Albert, CLTC, NSSA, is an insurance agent at Integrated Planning Strategies LLC in Cincinnati. He serves individuals and small businesses.