Medicare is very Beneficial for the United States

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Updated: Mar 28, 2022
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Politics surrounding healthcare have always been a very controversial topic amongst the public and political officials. Topics such as lowering healthcare costs, the ability of hospitals to merge, and most importantly the move towards universal coverage are highly researched and gravitate a lot of attention. More specifically, universal coverage is very popular and appealing towards the vast majority of Americans. The reason why universal coverage is popular is due to the fact that the American population face major amounts of individuals who have no insurance.

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According to the Kaiser Family Foundation, 28 million Americans are uninsured and left with extremely high burdens of debt with no financial assistance which leave them bankrupt (Kaiser Family Foundation 2017). This is concerning considering that the United States is regarded as one of the major economies in the world. However, despite this, it is important to state that the country is in fact trying to leverage more benefits for the public through radical changes in the healthcare sector. These changes revolve around introducing healthcare that contains universal coverage, a single-payer system, and eliminating various private insurers (Seidman 2015). The term that is used to encompass these changes is normally noted as “Medical for All” or simply a single payer system. Onlookers see Medicare for All as a saving grace that can lower healthcare GDP, eliminate cost-sharing, and provide universal coverage. However, the opposition for this legislation see Medical for All as nothing more than an issue for the federal government. Overall, Medicare for All is indeed very beneficial for the United States to satisfy the public; however, in the long run the country may not be able to sustain the massive budget needed to afford this legislation.

To start off, what exactly is the general basis for Medicare and why would expanding its coverage be highly favorable for the public? Medicare, as of right now, is for individuals who are 65 years or older or for individuals who face certain disabilities or diseases such and End-Stage Renal Disease (CMS 2018). In basic terms, Medicare is a type of insurance that covers for an individual’s screenings and services for when they visit a hospital or doctor. A very appealing aspect about Medicare revolves around part A and B of the insurance plan. Part A covers inpatient services while part B expands the services individuals are allowed to obtain. Moreover, these two different sections in the plan are highly subsidized by the government and are often associated with low premiums (Van de Water 2018). So, if the plan were to expand to more than those 65 years and older, more of the American population would be able to visit a variety of doctors for relatively low costs while also deconstructing ambiguous payments (i.e. deductibles). This is where the argument for Medicare for All starts to gain some credibility and traction. On top of that, the country has the possibility of seeing extraordinary cuts in administrative savings and lower drug costs, which are among the highest in the world.

Administrative costs are astronomically high in the United States; a study by The New England Journal of Medicine noted that back in 1999 that Americans spent 30 percent of health care expenditures on administration (Frakt 2018). To explain this in numbers, out of the average of $19,000 that workers in the U.S. pay for family coverage, about $5,700 goes towards administrative costs (Frakt 2018). These administrative costs are a result of providers spending excessive amounts of hours on billing and payment collecting. Moreover, these excessive hours are of a direct complication from a very complex insurance system that creates a large burden on providers. In more depth, Medicare, along with the private insurance that it supplies, accounted for 7 percent of total Medicare spending or $47 billion (Frakt 2018). Even though the administrative costs directly associated with Medicare have been decreasing, the private part of the plan has increased and is forecasted to continually rise (Frakt 2018). The enactment of Medicare for All could be a possible solution to contain these costs due to the fact that this legislation also eliminates private insurance. With the hypothetical introduction of Medicare for All the United States could possibly see a dramatic reduction in administrative costs, a $83 billion decrease (Blahous 2018). This is the most favorable result to come out of enacting Medicare for All; however, these reductions come with numerous complications. Those who enjoy the private insurance plan that they are under will no longer be able to stay under it. They will lose all the benefits that they were entitled to and forced under a plan that may not provide the same (Frakt 2018). This is not optimal but it is still under debate on whether or not the higher administration costs are worth what they provide.

Now, how does the United States compare to other countries of its caliber, are the administrative costs really that high with its comparable? Unfortunately, the U.S. does not compete with any other country and ranks last in major healthcare categories. Administratively, the U.S. doubles that of Canada and spends excessively higher than other countries (Commonwealth Fund 2017). This result is catalyzed from high deductibles and a highly fragmented healthcare system. The major aspect to blame in this situation would be the fundamental structural flaws in financing, which uncontrolled would spiral the United States into turmoil (Weisbart 2012). When Massachusetts adopted legislation to offer nearly universal coverage for its population it was expected to be a great accomplishment for the state. However, it was noticed that it drove patients into financial ruin, mostly because of a lack of examination into costs and sustainability (Weisbart 2012). However, it would be an injustice to not mention the strides that the United States has made in correcting this issue. When the Affordable Care Act was passed it managed to cover 20 million Americans, but still failed to cover everyone and included many complications (Commonwealth fund 2017).

The Affordable Care Act (ACA) was implemented to try and expand access to health insurance, protect patients from insurance companies, and reduce costs. However, the reliance on private employer-provided ended up being a major burden on providers and employed individuals (Seidman 2015). What ended up occurring were individuals who became job-locked, a large burden placed on rising entrepreneurs, and an overall inefficient economy (Seidman 2015). To combat this Seidman ultimately argued for Medicare for All and proposed that it would reap in major benefits for the country. Under Medicare for All, employers and employees would not have to be concerned about potential issues with their private insurance plan (Seidman 2015). Also, as a direct result from implementing Medicare for All the United States garners the ability of bargaining power, which determines prices. A major difference between the U.S. and other high-income countries is in the bargaining power on the buyer’s side of medical care (Seidman 2015). The highly fragmentized healthcare system that daunts the U.S. is weak and partially explains the high costs in the system (Anderson et al. 2003). However, what is to come out of a single-payer system in terms on waiting lists and quality? Will it still be worth switching towards Medicare for All? The overall goal would be to apply bargaining power in an amount that does not harm providers or patients. If the U.S. were to bargain too low then providers would lower their quality and sharply increase wait times, and if bargaining were set too high then the same results occur (Seidman 2015). Finding a middle ground for how much to bargain prices will ultimately lower costs and influence the implication of Medicare for All.

Despite all the benefits Medicare for All can reap in, it is important to go in detail to how much would be lost by the economy if were to actually be implemented. Overall, looking at the entire expenditure, it would cost the federal government $3.859 trillion by 2022 and increase health service costs by 89 percent (Blahous 2018). This is extremely costly for the federal government and inefficient considering that cuts to providers will need to be made; these cuts range up to $384 billion (Blahous 2018). It is unknown whether or not these providers can remain operational or if they can adapt, this a very critical question and up for debate among politicians. Also, these prices alone scare officials looking to expand Medicare just at the state level. Take California for example, the governor was a proponent of the Medicare for All approach; however, they noticed that the cost was at $400 billion per year. Their current budget was at $201 billion, which is half the amount needed to just fund the expansion (Walckzak 2018). Also, recently it was reported that Medicare is expected to run out of money in 2026 with dramatic increases in costs to go behind it (Alonso-Zaldivar 2018). Looking at the entire scope of benefits and consequences of Medicare for All it would be infeasible to try and implement Medicare for All without revitalizing the foundation of the entire Medicare system.

Currently the United States would face major sustainability issues if it were to implement such a radical change in the healthcare system. Medicare for All offers the U.S. a lot of benefits and is incredibly popular among the population; however, looking at all the aspects of costs makes the plan impracticable. This does not go to say that the U.S. should not try and introduce some changes into the current system. The current system is highly inefficient as well and the U.S. should look at Medicare for All as the backbone for major healthcare reform in the future.

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Medicare is Very Beneficial for the United States. (2021, Oct 18). Retrieved from