But How Would We Afford It? (The dumbest question asked by opponents of Medicare for All).
Whenever this question comes up, I want to say “how do we pay for health insurance today?” And the answer that comes back is “my employer pays most of it.”
Exactly! And that’s who would pay for it going forward. Today employer and employees pay a combined $7,000 per year per person covered on average to private insurance companies. In total approximately $1.2 trillion per year is spent on premiums.
So instead of paying private insurance companies, employers would be required to pay premiums to Medicare. Yes, one might call them taxes, but the private health premium would go away and dollars are dollars. It matters not if they get called taxes or premiums.
Except….except because everyone is covered by one buyer of healthcare, that buyer has far more bargaining power than any single private insurance does today. Hence Medicare would have significant power to reduce prices for hospital services and drugs. In addition, today’s hospitals waste about 15–20% of all dollars managing setting and negotiating prices, billing and collections versus many different insurance companies and individuals. Each of these insurance companies has their own billing and adjudication systems that the hospital has to contend with causing tremendous complexity and inefficiency. If they only had one insurance company (Medicare) to deal with they could reduce prices with zero impact to health delivery. Same for physicians. Furthermore insurance companies charge employers for a profit margin and marketing expenses. Medicare needs no profit or much marketing. So another 10–15% goes away. This is why single payer countries healthcare costs so much less without a sacrifice of quality. It’s just more efficient. We should be spending 30–40% less. Yes, employers would pay LESS! America would be more competitive as a nation.
So that’s how we would pay for it and it would be less costly than today’s inefficient system.