Medicare for All Plan=A Big Bust?

By Prateek Patel

I want to discuss Medicare for All, the plan that has become a major initiative of the
2020 Democratic platform. A plan that would increase government spending on
healthcare by $32.6 trillion dollars.

As of December 2018, the United States spends more on Medicare than most
countries spend on their entire healthcare costs altogether. We spend roughly 4.4
trillion dollars on Medicare alone. By 2030 at the current rate, we will be spending
around 7.7 trillion dollars without including the costs of inflation. This is without the
creation of the new Medicare for All plan assembled by the Senate Democrats. So, let
me explain how the current Medicare system works and why Medicare for All is merely
an ineffective utopian dream. This plan will cost around $32.6 trillion dollars at the
forefront and additional costs will rise as the plan would take effect. This appropriation
is more than our entire national debt combined.

Currently 44 million beneficiaries are enrolled in the Medicare program–around 15% of

the US population. Enrollment is expected to rise to 79 million by 2030. Only 1 in 10
beneficiaries’ programs cover the entire costs for health care coverage. The rest have
some form of supplemental coverage to help with medical expenses. Basically, if
you’re an elderly citizen, despite the country providing you this benefit, you still will not
be able to afford these expenses.

To make things more complicated, there are four plans for Medicare coverage. Plans
A, B, C, and D. Whenever you turn 65 years old, you automatically are enrolled in
Medicare Plans A and B. Plan A covers the expenses of the hospital, skilled nursing
facility care, and some hospice stays. While Part B covers the supplemental costs,
paying for services like clinician visits, outpatient care, and some preventive services.

When you apply to Medicare, you are automatically enrolled in the Part A plan. You
likely won’t have to pay a monthly premium for Medicare Part A, for the people who
have worked for at least 40 quarters in the United States and paid taxes. If you are a
U.S. citizen or permanent resident and have not worked long enough to qualify for
Medicare, and can’t qualify through a spouse, you will probably have to purchase Part
A coverage. Part A pays about 80 percent of your Medicare-approved, inpatient costs
for the first 60 days you are hospitalized. If you have a longer hospital stay, you will
have to pay a larger share of the costs. But you will have to pay a yearly deductible
before Medicare A will cover any hospital costs. This yearly deductible for Part A will
increase from $1,340 in 2018 to $1,364 in 2019. This is just another way the
government makes money off retired old people.

While Medicare Plan B, also provided to elderly individuals over the age of 65, covers
the supplemental costs for elderly patients. Part B pays for a portion of your doctor
visits, some home health care, medical equipment, outpatient procedures,
rehabilitation therapy, laboratory tests, X-rays, mental health services, ambulance
services and blood. Unlike Part A, B is still optional, and you can opt out of Part B if
you still have health insurance through an employer, union, your spouse, etc. Part B
requires that you pay a monthly premium and a deductible for Medicare that must be
provided before Part B begins paying for services. The standard monthly premium for
Medicare Part B enrollees will be $135.50 for 2019, an increase of $1.50 from $134 in
2018. While, the annual deductible for all Medicare Part B beneficiaries is $185 in 2019,
which is two dollars more since the $183 in 2018.

Now here is where Part B gets complicated, when you arrive at the Hold-Harmless
Clause. According to Business Dictionary, the Hold Harmless Clause is a provision in
an agreement under which one or both parties agree not to hold the other party
responsible for any loss, damage, or legal liability. In effect, this clause indemnifies the
parties on a unilateral or reciprocal basis (as the case may be). See also indemnity
clause. An estimated 42 percent of all Part B enrollees are subject to the hold harmless
provision in 2018 and will pay the full monthly premium of $134. This is because the
increase in their Social Security benefit will be greater than or equal to an increase in
their Part B premiums up to the full 2018 amount. While about 28 percent of all Part B
enrollees are subject to the hold harmless provision in 2018 and will pay less than the
full monthly premium of $134. This is because the increase in their Social Security
benefit will not be large enough to cover the full Part B premium increase.

Here is the clincher, Part B is not able to cover all of the supplemental costs for the
elderly. With the costs continually escalating, seniors must look to other forms of
insurance either Employer Based Healthcare, Medicaid (only if they are qualified. So,
the government encourages the seniors to apply for their so-called platinum package.
This package has a very creative name, Medicare Advantage better known as
Medicare Part C.

The Medicare Advantage Plan or Medicare Part C has approximately 9.4 million
beneficiaries (one-fifth of the Medicare beneficiaries). Many of the beneficiaries,
automatically receive this so-called platinum package through private plans. These
plans are offered by private companies that contract with Medicare and can cost
around $183 per year. After your deductible is met, you typically pay 20% of the
Medicare-approved amount for most doctor services (including most doctor services
while you’re a hospital inpatient), outpatient therapy, and durable medical equipment.
The Part C monthly premium varies by plan. But if you are receiving Part C coverage,
then you are already paying for Part A and Part B. Under Part C or the Medicare
Advantage Plan, you are provided with all of your Part A and Part B benefits along with
additional perks. Medicare Advantage Plans include Health Maintenance
Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special
Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a
Medicare Advantage Plan, most Medicare services are covered through the plan, not
all Medicare services are paid for by Original Medicare in Parts A and B. And, most
Medicare Advantage Plans offer prescription drug coverage, which is nonexistent in
Parts A and B.

Basically, in short, Part A and B rarely covers any of the elderly hospital costs and
receive a major bulk of the current $4.4 trillion appropriations. If you want to be
upgraded and receive the best insurance that your tax money should be paying for,
you have to pay extra for Medicare C. But it covers some drug costs, unlike Part A and
Part B. For drugs, you need the fourth medical plan, Medicare Part D.

Medicare Part D provides prescription drug coverage and covers an estimated 25.4
million beneficiaries through a combination of stand-alone prescription drug plans and
Medicare Advantage plans that include drug coverage. Part D adds prescription drug
coverage too: Original Medicare, Some Medicare Cost Plans, Some Medicare Private-
Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are
offered by insurance companies and other private companies approved by Medicare.
Medicare Advantage Plans may also offer prescription drug coverage that follows the
same rules as Medicare Prescription Drug Plans. To receive the Medicare Part D
Prescription Drug Plan coverage, you must pay a higher monthly premium, if you go 63
or more consecutive days without creditable prescription drug coverage after your IEP.
Creditable prescription drug coverage is coverage that is expected to pay at least as
much as standard Medicare prescription drug coverage, on average.

Currently, Medicare calculates the late-enrollment penalty by multiplying the 1%

penalty rate of the “national base beneficiary premium”, around $35.02 in 2018, by the
number of full, uncovered months you were eligible to enroll in a Medicare Prescription
Drug Plan but did not (assuming you didn’t have other creditable prescription drug
coverage). The final amount is rounded to the nearest $0.10 and added to your monthly
premium. You also have the “national base beneficiary premium”. This premium may
go up each year, so the penalty amount may also go up every year. In addition to your
premium each month, you may have to pay this penalty for as long as you have a
Medicare Prescription Drug Plan. This is the worst part of Medicare. Basically, this is a
sales tax to help pay for drugs. But because your 4.4 trillion cannot appropriate enough
funds to the higher drug costs, the elderly should pay an additional fee for using a
service that they already pay for.

The biggest problems with the Medicare for All Plan and the current Medicare System
revolve around Part D. The average nationwide monthly premium for 2018 Part D is
$34, although plan costs vary depending on the plan you choose and where you live.
You will generally only want to choose a plan with low premiums if it also has the
lowest overall cost per year, including the costs for the drugs you take. There is also a
“catastrophic coverage” provision. This means that, once a patient’s annual out-of-
pocket costs have reached $4,950 out of pocket in 2017, he or she will pay only a
small co-insurance amount or co-payment for all covered drugs over the remainder of
the year. This is a kind of insurance that protects you against high drug costs if and
when you need it in the future. In these circumstances, consider enrolling in the Part D
plan in your area that has the lowest premium, which would give you coverage at the
least cost.
This is why Medicare for All won’t work.

The US government struggles to make ends meet already when they provide coverage
to $47.8 million people. So how will the coverage improve when the amount of people
rises to another 150 million people. The math and the logic both don’t add up. Plus,
what about the seniors, that have worked their entire lives and have paid taxes into this
Medicare system. They receive absolutely no benefits from this atrocious plan, if
anything now they will pay more money for less. Just think about it if more people have
coverage: individual incomes taxes will increase, the amount of people that regularly
visit the hospitals will also increase (causing waiting lines), and the number of doctors
is still relatively going to stay the same. It’s not a cost-affordable or practical plan, if all
politics are foregone, from a purely fiscal perspective.

Overall, with the escalating costs in drug prices and increased hospital visits, the plan
for providing Medicare to all citizens will not work. The costs of medicine continue to
skyrocket, which directly impact elderly populations that have more limited funds and
survive off retirement benefits and pensions. Along with this, the elderly population
have more hospital visits and need expert medical attention at a higher rate than any
other demographics.
By expanding this coverage to non-elderly beneficiaries, you reduce the elderly
benefits to an even greater degree. So, these Democratic lawmakers must ask
themselves that when the elderly are not able to receive the most effective treatment
and services, from our heavy appropriations to Medicare, how will we manage to afford
providing Medicare services to all American citizens?

These issues remain the biggest problem for this not-too-well-thought-out overly
expensive idea that has already dominated the 2020 Democratic primary.