“There is a moral imperative to correct the massive deficiencies in our current health system and to eliminate profit from the provision of healthcare.” This underlying premise of the Medicare For All Act of 2019 is actually buried on page 78 of H.R. 1384, the legislation introduced in the House by Pramila Jayapal (D-WA) and cosponsored by 107 other House Democrats. In the Senate, Bernie Sanders, who has championed Medicare for All for years, submitted  a corresponding bill, S.1129. 14 other Democratic Senators including Booker, Gillibrand, Harris and Warren signed on as co-sponsors of the Senate bill.

Every Resident Gets Comprehensive Healthcare Benefits

Medicare For All 2019 would guarantee free access to healthcare for “every individual who is a resident of the U.S.” Moreover, you can choose your doctors and hospitals “from any institution, agency or individual qualified to participate.”

Health insurance as we know it is gone. So are premiums, deductibles and co-pays. Unlike Medicare today, there is no cost sharing. In fact, it becomes illegal for any medical provider to charge you for covered healthcare benefits no matter what age you are.

It’s also illegal for any employer or private insurer to offer a plan with the same benefits you’re already entitled to, essentially eliminating any competition and consolidating all healthcare in government hands.

The built-in benefits are extensive, adding dental, vision, transportation and long-term care to the services already mandated by the Affordable Care Act.

Physicians and Facilities Qualify to Provide Services

To participate in the system, physicians, medical facilities and other healthcare providers must qualify to treat patients using the same licenses and certifications Medicare already requires. Providers sign a Participation Agreement every year and are bound by a duty of ethics to “advocate for and act in the exclusive interest of each individual.”

The fed sets standards and guidelines to follow. However, a doctor can override those mandates if it’s “medically necessary” and “consistent with individual wishes.” Hospitals, clinics, long-term care facilities and other providers can only employ those who qualify and must also meet requirements like minimum nurse-to-patient ratios.

These providers remain independent entities. In the Senate bill, rates are the same as the current Medicare fee schedule. In the House bill, providers must negotiate payment with the government every year in advance. They can choose to be paid a flat rate or charge a fee per service. Prices are based on factors such as the value of services provided, actual expenditures, new programs and innovations, and the comparative rates other providers have negotiated. Bonuses, pay for performance and other financial incentives are no longer allowed.

The prices Medicare currently pays are lower than those paid by insurance companies which could create financial challenges for providers. However, that might be offset by reduced time spent on paperwork and administration.

Prescription Drug Prices Are Controlled

Pharmaceutical companies are also independent. But, unlike current law, drug companies would now be required to negotiate with the government on pricing.

To make sure the U.S. doesn’t pay more for medications than the rest of the world, in the House bill, prices will be determined by an international average of similar OECD countries. If an agreement can’t be reached, this legislation lets government manufacture that drug rather than buy it, even if there’s a current patent in place.

The Senate bill uses a formulary to set prices. It’s also the only benefit that requires a co-pay which is capped at $200 per person per year.

How to Fully Fund Medicare For All Is Still Unclear

To pay for all this healthcare, Medicare For All sets up The Universal Medicare Trust Fund. All existing government healthcare funding, except Native American and Veterans Affairs, rolls into this trust.

Chart of Who Pays for U.S. Healthcare

Federal, State and Local governments already pay nearly half of all U.S. healthcare expenditures, about $1.5 trillion a year. But independent estimates of the cost of Medicare for All (mostly before long-term care and other new benefits were added) put the total over $3 trillion per year, costing between $28 and $33 trillion over the next 10 years.

Neither the House nor the Senate bill explains where the balance of the funding will come from. However, Bernie Sanders has published a companion document that calls for an estimated 4% additional tax on the American people who will no longer have to pay any out-of-pocket healthcare costs or premiums plus additional taxes on high income earners plus a 7.5% tax on business since employers who will save the cost of providing healthcare benefits to employees.

Also, experts like Professor Gerald Friedman of the University of Massachusetts point to the savings we could realize, itemizing as much as $12 trillion in reductions over the next 10 years.

The Trust Fund budget will include:

  • The Operating Budget – Payments to institutions and individual providers
  • Capital Expenditures – Construction and renovation of facilities and major equipment purchases
  • Special Projects – New facilities, equipment and staff
  • Quality Assessment – To ensure the quality of care and measure improvement
  • Education – To keep providers informed of the latest information and innovations
  • Administration – Which is projected to be significantly lower than for-profit operations
  • Reserve Fund – For emergencies like an epidemic or natural disaster
  • Preventive and Public Health Activities – To encourage adoption of healthy lifestyles

How the Transition and Administration Works

The House bill has a two year transition period while the Senate bill calls for a 4 year period. During that time, government sets up the programs to enroll all residents and participating providers and people can buy in through a plan offered on the ACA exchanges. But once the Medicare For All program is fully implemented, exchanges and all other private health insurance will be eliminated. Every citizen is covered and pays nothing (other than taxes and maybe a prescription co-pay) for healthcare services.

Currently, there are about half a million people employed in the healthcare insurance industry who would effectively be out of a job. Both these bills provide training, education and wage replacement benefits for those displaced workers.

Administration of Medicare For All falls under the Department of Health and Human Services, The Secretary, supported by regional offices, must review quality, guidelines and prices every year and audits are mandated at least every 5 years. A separate office called the Beneficiary Ombudsman handles complaints.

Other Key Features of the Medicare For All Act:

  • Prohibits any kind of discrimination.
  • Prioritizes geographic equity and rural access.
  • Prosecutes fraud and bans violators from the healthcare system.
  • Protects whistle-blowers.
  • Permits employers and private insurance companies to offer healthcare benefits that are not already included in the Medicare For All Act (although that would only cover optional procedures like cosmetic surgery).
  • Allows States to require higher standards than the Fed has set.

Top 5 Reasons People Say Yay!     

  • Healthcare is a right and every resident is guaranteed care.
  • It will improve the overall health of the U.S. population.
  • There is no out-of-pocket cost for any essential medical service or treatment.
  • It restores doctor-patient decision-making.
  • It improves access in rural and under-served communities.

Top 5 Reasons People Say Nay!

  • We can’t afford it.
  • It’s a socialist approach with too much change, too fast.
  • The quality of care will be diminished because there are not enough providers.
  • Provider pay would be cut.
  • It disrupts an industry with nearly 500,000 employees.

All the quoted text in this document comes from HR 1384. It’s pretty straightforward if you’d like to read it for yourself.

You can also read S 1129.

Where Leading Democratic Candidates Stand on Medicare For All