Two Kinds of Medicare for All

(Bloomberg Opinion) -- Today brings the first-ever hearing in Congress on the idea that the U.S. government should provide “Medicare for all.” And it isn’t a moment too soon. Already seven separate bills to expand Medicare have been introduced. And most of the 21 people vying for the Democratic Party’s presidential nomination have come out in favor of vastly broadening it.

Legislation isn’t imminent. Even so, opening the official discussion will be useful if it can show the country what’s at stake — and just how disruptive to the U.S. health-care system a full-fledged conversion to a single-payer system would be.

This hasn’t been obvious because people use “Medicare for all” to mean two very different things. There’s the idea contained in the bill at issue today, a proposal by Representative Pramila Jayapal of Washington state, that Medicare should be mandatory: Medicare for all whether they like it or not. Then there’s the idea that some people should be allowed to buy into Medicare: Medicare for all who want it.

Only the latter choice could be managed without great upheaval. Medicare for all whether they like it or not would largely eliminate the private health-insurance industry, and would force hospitals, doctors and everyone else employed in the health-care sector — 17 percent of the economy — to accept Medicare’s reduced payments. This kind of Medicare for all would disrupt even Medicare itself, because a third of today’s beneficiaries use Medicare Advantage, which provides coverage through private insurers.

Medicare buy-in could also be pretty disruptive, if it were carried out too abruptly and without raising the amounts that Medicare pays health-care providers. Gradual moves toward this alternative, however, are well worth considering, because they could extend adequate health care to many of the more than 28 million Americans who remain uninsured.

To start, the option might be offered to people shopping for individual policies on the Obamacare exchanges in places with few private insurance choices. (One of the measures before Congress, the Medicare-X Choice Act, envisions such a strategy.) Or Medicare buy-in could be offered to people aged 60 and older before they qualify for the Medicare benefit. (Two separate bills propose an age-based buy-in, starting at age 50.) This way, Medicare could become a public health-insurance option, helping to strengthen and expand the present system.

Indeed, the biggest question for supporters of mandatory Medicare is, why upend the American health-care system rather than build on the substantial progress that the Affordable Care Act has made? Some 20 million Americans have gained health insurance in the nine years since the ACA was signed into law, without undue economic turmoil (granted, there’s been some of the political kind).

Polls make it clear that Americans want Congress to maintain protections for people with pre-existing conditions and address scandalous medical expenses — from the prices of prescription drugs to medical bills that, by design, take patients by surprise. But voters are wary about upending the entire U.S. health-care system. Reformers in Congress should be, too.

Editorials are written by the Bloomberg Opinion editorial board.

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