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What Is “Medicare for All” – Features, Costs, Pros & Cons

There’s a lot of buzz around the phrase “Medicare for All.” This proposal was a major feature of Democratic presidential candidate Bernie Sanders’s campaign in 2020. It also won the support of at least five other candidates, including the eventual vice president, Kamala Harris. And in early 2021, with Democrats poised to take control of the White House and both houses of Congress, news sources like the New York Times began speculating on the possibility that it could actually become law.

But not all news sources see this possibility in a positive light. For each story that praises the plan as the solution to everything that’s wrong with America’s expensive health care system, there’s another attacking it as a socialist plan that would destroy the economy.

With all the conflicting opinions about Medicare for All, it’s only natural if you’re feeling a bit confused about it. Here’s what you need to know about this health care plan — what it actually involves, what it would cost, and how it could affect you.

What “Medicare for All” Means

As the name suggests, Medicare for All expands on the original Medicare program that’s been around since 1965. This program, which provides guaranteed health insurance to older Americans, is consistently popular with voters. A 2015 survey by the Kaiser Family Foundation (KFF) found that 75% of Americans covered by Medicare said the program was working well for most seniors.

When Medicare was first introduced, it was designed in a way that allowed the program to expand to cover more people. However, the only time that happened was in 1972, when the program was broadened to cover people with disabilities. For the next 45 years, the number of people covered remained mostly unchanged.

Then, in 2017, Sen. Bernie Sanders of Vermont proposed expanding the program on a massive scale to cover virtually everyone in the country. Under his plan, an all-inclusive Medicare would replace the existing Medicare and Medicaid programs, as well as all private health insurance. It’s essentially the latest spin on a “single-payer” health care system, in which the government uses tax money to provide health insurance for everyone.

Medicare Today

Medicare is a program that benefits Americans who are age 65 or older or who have disabilities. The current program has two parts: Part A for hospital care and Part B for doctors’ visits, outpatient care, and some forms of medical equipment. Currently, Medicare recipients have the option of signing up for Part D, which covers prescription drugs, but that costs extra. Medicare does not cover most costs for long-term care, dental care, vision care such as eye exams and prescription lenses, or hearing exams and hearing aids.

Along with its coverage gaps, Medicare has costs for patients. According to Medicare.gov, most people pay no premium for Part A coverage, but there’s a monthly premium for Part B that ranges from $148.50 to $504.90, depending on income. There are also deductibles and copayments for both Parts A and B, as well as for the various Part D plans.

A 2020 analysis by AARP found that the average person on traditional Medicare paid $5,801 out of pocket for care in 2017. However, there’s no actual limit on out-of-pocket costs under Medicare Parts A and B. That’s why many Medicare users pay extra for “Medigap” insurance, which covers the cost of copays and other gaps in coverage.

What Medicare for All Would Cover

Sanders’ Medicare for All proposal would do more than merely extend the existing Medicare program to all Americans. It would create a new and much more generous version of Medicare that covers all essential forms of health care.

Under Sanders’ plan, the government would pick up the tab for all forms of medical care, including dental and vision care. The plan would also expand coverage for long-term care, even if it doesn’t cover the cost in full. Except for some long-term care costs and a $200 yearly deductible for prescription drugs, consumers would pay nothing at all.


America’s Current Health Insurance System

Medicare for All looks very different from the way we pay for health care in the United States today. Under the current system, people get health insurance from a patchwork of different providers.

Most workers buy into health care plans sponsored by their employers. Other people get insurance through various government programs — such as Medicare, Medicaid, and the Veterans Health Administration — that provide care for specific groups. People who don’t fit into any of these categories, such as freelancers, must buy their own insurance on the private market or go without.

This hodgepodge of a system creates a lot of problems. Many Americans have no coverage, and even those who do pay more for care than people in most developed countries. Yet our expensive care doesn’t make us healthier. In fact, by most measures, Americans have worse health outcomes than people in other developed nations.

Gaps in Coverage

Under the current system, approximately 29.6 million Americans have no health insurance, according to the U.S. Census Bureau. Moreover, a 2020 study by The Commonwealth Fund concluded that another 41 million Americans — about 21% of working-age adults — are underinsured, without enough coverage to protect them from devastatingly high medical expenses.

These uninsured and underinsured Americans are likely to put off necessary medical treatment because they can’t afford it. Often, they don’t seek medical care until they have a problem serious enough to land them in the emergency room, the most expensive possible place to receive care. Thus, having large numbers of uninsured and underinsured Americans drives up health care costs for the country as a whole.

Worse still, Americans without insurance are constantly at risk of having their savings wiped out by high medical bills. A study published in the American Journal of Public Health in 2019 found that two-thirds of all bankruptcies in the U.S. are due to medical problems, either high health care bills or time lost from work due to illness. More than half a million families go bankrupt each year on account of medical problems.

High Costs

Even though the American system doesn’t cover everybody, it’s still expensive. A 2019 study by the Johns Hopkins Bloomberg School of Public Health found that the U.S. spends far more per person on health care than any other developed country.

In 2016, the cost of care in the U.S. came to $9,982 per person. That’s about 25% more than Sweden, the country with the second-costliest care at $7,919 per person, and more than twice as much as Canada at $4,753. The average for all developed nations was only $4,033, about 40% of what Americans spent. The U.S. spent a total of 17.2% of its gross domestic product (GDP) on health care, while the average developed country spent only 8.9% of GDP.

The researchers found that health care costs the most in the U.S. not because Americans use more care, but because we pay higher prices for pretty much everything. Another study, published in the Journal of the American Medical Association (JAMA) in March 2018, backs up this conclusion. It found the U.S. spends 1.5 to 3 times as much on prescription drug costs as 10 other high-income countries (Australia, Canada, Denmark, France, Germany, Great Britain, Japan, the Netherlands, Sweden, and Switzerland). The U.S. pays generalist physicians’ salaries that are 1.4 to 2.5 times higher.

One reason health care prices are higher in the U.S. is that most Americans get their coverage from private insurers, and these companies pay much higher rates for the same health care services than public programs such as Medicare. Even large companies don’t have the same bargaining power as government programs, which cover much larger numbers of people.

If the government thinks that a health care provider such as a hospital is charging too much for its services, it can simply threaten to drop that hospital from Medicare. The hospital can’t afford to lose that many patients, so it usually has no choice but to agree to lower its prices.

In the same way, the government can strong-arm drug companies into offering lower costs for prescription drugs to Medicare patients.

Another factor behind the higher prices Americans pay is administrative costs. According to the JAMA study, 8% of all health care costs in the U.S. went toward administration — that is, planning, regulating, billing, and managing health care services and systems.

By contrast, the 10 other countries in the study spent only 1% to 3% of total costs on administration. Our complex system, with its patchwork of different insurers, requires health care providers to spend a lot more time, money, and effort coordinating care and costs rather than simply providing care to patients.

Poor Outcomes

It might be worth it for Americans to pay twice as much for health care as people in other developed countries if the care we received were twice as good. However, studies indicate that’s not the case. Compared with the rest of the world, America gets low marks for:

  • Access to Care. According to the Johns Hopkins study, Americans have less access to many health care resources than people in other countries. The U.S. has 19% fewer practicing doctors, 25% fewer practicing nurses, and 26% fewer acute care hospital beds per person than the average for developed countries.
  • Health Insurance Coverage. The JAMA study found that 10% of all Americans have no health insurance. In the 10 other countries featured in the study, 99% to 100% of the population is covered.
  • Life Expectancy. According to the JAMA study, Americans don’t live as long as people in the other 10 countries studied. The average life expectancy for Americans is 78.8 years, while in other countries it ranged from 80.7 to 83.9 years.
  • Infant Mortality. Out of 1,000 babies born in the U.S., 5.8 die in infancy, according to the JAMA study. The average for all 11 countries in the study was only 3.6 deaths per 1,000 live births.
  • Obesity. In the U.S., 70.1% of the adult population is overweight or obese. In the 10 other countries in the JAMA study, this percentage ranged from 23.8% to 63.4%.

A 2018 Forbes editorial criticizing the JAMA study points out that the problems with Americans’ health aren’t all due to our health care system. America is a huge country with a diverse population, which increases the challenges of providing care for everyone. It also has a larger percentage of people living in poverty, who tend to have worse overall health.

However, our system is clearly part of the problem. For one thing, the relatively high numbers of uninsured and underinsured Americans are less likely to get the care they need.

Moreover, those who have insurance are mostly getting it from private companies incentivized to make as much money as they can and avoid paying for claims as often as they can manage.

Earlier Attempts at Health Care Reform

The problems with the U.S. health care system aren’t new, and there have been many attempts over the years to deal with them. President Harry Truman was the first to propose a single-payer system back in 1945, and presidents Richard Nixon and Bill Clinton also attempted to create systems that would provide coverage for everyone.

However, all these plans met with opposition on the grounds that they were either too radical or not comprehensive enough, and none of them made it through Congress.

The only major health care reform since Medicare was the enactment of the Affordable Care Act (ACA), commonly known as Obamacare, under the administration of Barack Obama in 2010. This bill created a marketplace where individuals could buy health insurance and provided subsidies to help lower-income individuals pay for it. It also established penalties for employers who failed to provide insurance and individuals who failed to buy it. However, it didn’t guarantee coverage to all Americans.

Obamacare was a compromise that neither the left nor the right was entirely happy with. Polls from the KFF show that the program has never enjoyed support from more than 55% of Americans, and Republicans are particularly likely to oppose it. Republicans in Congress have been attempting to repeal it ever since its passage, usually with a promise to replace it with a better plan but without consensus about what that plan would look like. With no replacement for the ACA, repeal efforts failed, and the program has remained in place.

It’s in this context that the idea of single-payer coverage is coming up again under a new name. Public opinion polls from the KFF show that Americans react more favorably to the name “Medicare for All” than they do to “single-payer,” probably in part because it’s easier to understand. The term “single-payer” doesn’t make it clear how the program works, but Medicare is a concept most Americans are already familiar with, so the idea of everyone having Medicare is easier to grasp.

Naturally, switching over to this single-payer system from the patchwork of individual insurers we have now would be a big change. Sanders’ original 2017 Medicare for All bill proposed phasing the changes in over four years. Over that time, increasingly younger people would be allowed to buy into Medicare while out-of-pocket costs for Medicare users would gradually be lowered.

For those not using Medicare, the ACA health care exchanges would offer a public option — a government-funded insurance plan that would compete with private plans.


Medicare for All vs. Systems in Other Countries

Supporters of Medicare for All argue that this program would finally bring America in line with the rest of the developed world, where universal health care coverage is the norm. However, no other nation currently has a system quite like the Medicare for All plan with virtually zero out-of-pocket costs for patients.

Instead, they take a variety of approaches, ranging from mostly public funding to private insurance with strict regulation. Looking at the pros and cons of these systems can give us an idea of how Medicare for All could work here in the U.S.

Britain: The National Health Service

In Britain, the government not only finances health care, but it also provides it. The publicly funded National Health Service is a network of government-funded doctors and hospitals that provides essential medical care for everyone, regardless of income.

Patients pay for National Health through a payroll tax, but they pay nothing when they receive care from a doctor or hospital, and the cost of prescription medications is capped at £9.15 (about $12.45). This comprehensive system costs about 10% of Britain’s GDP, according to a 2017 analysis in The New York Times.

The downside is that there are often long wait times for treatment, as detailed in a 2018 New York Times story. At the height of flu season in January 2018, emergency rooms were so overcrowded that patients could wait upwards of 12 hours to see a doctor. In January 2021, as COVID-19 cases spiked, The Guardian reported that ambulances were spending hours lined up outside hospitals waiting for beds to be available — which left them unable to pick up more patients.

Patients who want faster treatment have the option of buying private medical insurance. As Virgin Money explains, these policies provide faster access to care, more choice of which doctors and hospitals to use, and treatments that aren’t always covered under National Health. About 10% of British citizens have one of these plans, according to the 2017 Times story.

The biggest downside of private insurance is the cost, which can be anywhere from £60 to £140 ($81 to $190) per month for a family of four on top of the payroll tax all Britons pay. However, that’s nothing compared with the cost of health insurance in the U.S. According to eHealth, the unsubsidized cost of a U.S. family plan in 2020 averaged $1,437 per month. That’s more than seven times as much as the priciest private plan in Britain.

Canada: Public Funding, Private Care

The single-payer health care system in Canada is probably closer to Medicare for All than any other national system. Under this system, the government provides health insurance coverage, but most of the actual care comes from private doctors and hospitals.

As in Britain, patients pay nothing at the time they receive care; they simply show their national insurance cards. That creates much less paperwork for both patients and providers.

However, Canada’s single-payer system doesn’t cover all forms of health care. Many Canadians receive private insurance through their jobs to help cover the costs of dental care, vision care, and prescription drugs. All in all, the government pays for about 70% of Canadians’ health care costs, according to The New York Times. The total cost of the system is similar to Britain’s — about 10% of GDP.

To keep costs down, Canada puts hospitals on strict budgets and limits the number of specialists who can receive training. Both these rules can result in long wait times for care. A 2019 report from Health Quality Ontario on the province’s health care system says that emergency room patients wait an average of 9.7 hours to be admitted to the hospital. Also, 30% of patients said they had to wait either somewhat too long or much too long for an appointment with their primary care doctor.

Europe: A Mix of Public and Private

In most European countries, everyone is required to buy health insurance, but that insurance can come from either government-sponsored or private companies. Here are a few examples of how the balance between public and private insurance works in different countries:

  • Switzerland. In Switzerland, health insurers are private companies, but they sell most of their plans on a nonprofit basis. They offer a variety of plans with premiums that vary based on the choice of doctors, the deductible, and the ease of seeing a specialist. Nearly 30% of people get subsidies based on income, much like ACA subsidies in the U.S.
  • France. France has a small selection of nonprofit health insurance companies that are funded largely with tax dollars. Public insurance covers most health care costs, and about 95% of people get private insurance — either through their jobs or through a voucher system — to cover the rest. The government sets prices for health services and drugs and strictly regulates the number of new doctors and the equipment available in hospitals.
  • Germany. Like the U.K., Germany has two types of health insurance. There’s a national public system with premiums that are based mostly on income — paid partly by employers and partly by employees — and private insurance that patients can choose to add. The government sets limits on how much doctors can earn and what they can charge for services. This system gives patients a lot of choices about which doctors and hospitals to use, and out-of-pocket costs are low.

These public-private blends are a little costlier than the British and Canadian systems, at 11% to 12% of GDP.


Costs of Medicare for All

Under Medicare for All, patients would pay nothing for their own care — at least, not directly. However, the system would be very costly for the government, resulting in higher taxes. The question is whether these new taxes would cost the average American more than the savings on health care.

Sanders’ Medicare for All bill includes some measures to rein in health care costs. For example, the government would set payment rates for all drugs, medical equipment, and services. The Department of Health and Human Services, which would oversee the program, would set a total budget for health care each year, and spending couldn’t go over that amount.

All the same, it’s clear that a program providing full health coverage for every American would be expensive. What’s less clear is just how expensive. Cost estimates from economists vary by more than $1 trillion per year. That makes it unclear whether Sanders’ ideas to pay for the Medicare for All program will really be enough to cover the cost.

Varying Cost Estimates

Calculations published in The New York Times show the U.S. government currently spends about $1.57 trillion per year on health care. That includes costs for Medicare, Medicaid, and other health insurance programs. According to Forbes, Sanders claims his Medicare for All plan would cost the government an additional $1.3 trillion per year, nearly doubling its current spending. That assumes that health care spending as a whole will fall because of reduced administrative costs.

However, most economists consider this estimate too low. Several economists have attempted to estimate how much the government would pay for health care under Medicare for All, and their figures vary widely.

  • Gerald Friedman. Sanders took his cost estimates from Friedman, an economist at the University of Massachusetts Amherst with close ties to the Sanders campaign. Friedman argued in a 2016 paper that the program would cost the government an additional $13.7 trillion over a 10-year period. That estimate assumes that prescription drug prices would fall to the average level in other developed countries — a drop of about 31%, according to The New York Times – and that administrative costs would drop to only 2% of spending.
  • RAND. When The New York Times asked the RAND Corporation to estimate how health care costs would change under Medicare for All, it concluded that the program itself would cost the country $3.24 trillion per year. Other government health care programs (such as the Veterans Health Administration, which would remain unchanged) would add another $81 billion, for a total cost of $3.32 trillion — an increase of $1.75 trillion. RAND assumed that payments to doctors and hospitals would go up about 9% from the levels currently set by Medicare, prescription drug prices would fall by about 11%, and Americans’ use of health care services would increase by 8%. It also estimated that total administrative costs under this system would be around 5%.
  • CBO. A 2020 report from the Congressional Budget Office (CBO) evaluates the cost of various single-payer plans. Under “Option 3,” the plan most similar to Medicare for All, it estimates that the amount the federal government spends on health care would rise by $1.77 trillion per year. However, overall health expenditures — both public and private — would fall by around $650 billion.
  • Kenneth Thorpe. In a letter available at Healthcare-NOW, Dr. Kenneth Thorpe of Emory University analyzed the Sanders plan and concluded that it would require roughly $2.5 trillion per year in additional spending. Thorpe’s figures assume that administrative costs would come to around 6% under the Sanders plan. They also assume that Americans will increase their consumption of health care by about 10% once they’re no longer paying out of pocket.
  • CRFB. The Committee for a Responsible Federal Budget (CRFB) calculates that Medicare for All would add $28 trillion to federal spending over a 10-year period, or $2.8 trillion per year. It also concludes that the new taxes Sanders has proposed to pay for the program (discussed below) would raise only $11.9 trillion over the same period — less than half the amount needed.
  • Urban Institute. A 2016 report from the Urban Institute put the added cost of Medicare for All at roughly $32 trillion over a 10-year period, or $3.2 trillion per year. However, state and local governments would save about $4.1 trillion during that same period as the federal government took over their health care costs. According to The New York Times, the Urban Institute’s figures assume a 7% increase in payments to doctors and hospitals, a 20% drop in prescription drug prices, administrative costs of around 6%, and no change in Americans’ use of health care services.
  • Mercatus Center. The most pessimistic estimate of costs comes from a 2018 paper by Charles Blahous of the Mercatus Center at George Mason University, which put the 10-year cost of Medicare for All at about $32.6 trillion over current levels. Blahous assumed that payments to doctors and hospitals would go down under this plan, dropping to the levels offered by the current Medicare system. He thought prescription drug costs would drop by 12%, health care usage would rise by 11%, and administrative costs could be around 6%.

There’s no way around it; these are huge numbers. However, it’s worth bearing in mind that health care costs under our current system are also extremely high; they’re just split between the government and private payers. According to the Centers for Medicare & Medicaid Services, if the system doesn’t change, total health care spending will grow by around 5.4% per year, reaching $6.2 trillion per year by 2028.

Economists disagree over whether total health care spending would go up or down under Medicare for All. Friedman and the CBO say it would drop as a result of increased efficiency and better-controlled drug prices, while Thorpe and the Urban Institute both conclude it would rise significantly.

Funding Medicare for All

On his website, Sanders lays out a detailed plan to pay for Medicare for All. His proposals include:

  • Payroll Tax for Employers. Employers would pay a 7.5% payroll tax to cover part of the cost of their employees’ health care. To protect small businesses, this tax would only apply to payroll costs over $1 million. Sanders estimates this would cost $4,500 per employee per year. That would actually be a savings for most businesses, which currently pay an average of more than $14,500 toward each employee’s health care costs. (Estimated revenues over 10 years: $5.2 trillion)
  • Premiums From Households. Individuals would also pay a 4% payroll tax on all income over $29,000 as a health insurance premium. Sanders estimates this would come to $1,240 per year for the average family of four. That’s significantly less than the $6,015 the average family currently pays for health insurance. (Estimated revenues over 10 years: $4 trillion)
  • Changes to Income Tax. Sanders proposes substantially increasing income taxes on Americans making over $10 million per year. He would also raise capital gains taxes and set a limit on itemized tax deductions for the wealthy. (Estimated revenues over 10 years: $3.6 trillion)
  • Eliminating Health Care Tax Breaks. Under current law, individuals pay no income tax on the money their employers contribute toward their health insurance costs. Taking the cost of health insurance out of employers’ hands would eliminate this and other tax breaks related to health care. (Estimated revenues over 10 years: $4.2 trillion)
  • Taxes on Businesses. Sanders says he could raise a total of $3 trillion through “corporate tax reform,” with one-third of that going to fund Medicare for All. However, his only specific proposal is raising the top corporate income tax rate to 35%. (Estimated revenues over 10 years: $1 trillion)
  • Wealth Tax. Right now, taxes in America are based on income rather than wealth. Sanders proposes creating a new wealth tax on the richest 0.1% of Americans. This tax would start at 1% on every dollar of net worth above $32 million and go up from there. (Estimated revenues over 10 years: $350 billion out of $4.35 trillion raised)
  • Raising the Estate Tax. Right now, the 40% federal estate tax applies only to estates worth $11.7 million or more. Sanders would tax all estates over $3.5 million, with higher rates for the biggest estates. (Estimated revenues over 10 years: $336 billion)

All told, Sanders claims his proposals would raise about $16.5 trillion over 10 years. That would cover the cost of the program if Friedman’s calculations are accurate, but it wouldn’t come close to meeting the cost based on any of the other economists’ figures. Thorpe calculated that based on his cost estimate, paying for the program would require raising the payroll tax to 14.3% and the income-related premium to 5.7%.


Effects of Medicare for All

Policy experts generally agree that some Americans, such as those who are currently uninsured, would definitely be better off under Medicare for All. Others, such as those who work for or invest in health insurance companies, would definitely be worse off.

For most Americans, there would be both advantages and disadvantages, and it’s difficult to calculate whether the pros would outweigh the cons.

How Medicare for All Could Affect You

A 2019 New York Times article analyzed how the Medicare for All plan would affect various groups of Americans, both for better and for worse. Here’s how the plan could affect you if you are:

  • Currently Uninsured. You would have health insurance, even if you don’t think you need it. You would have to pay for it through taxes, but the cost to you would be fairly low. If your income is low enough — for example, if you’re unemployed — you would pay nothing at all. (People affected: 28 million)
  • Currently Insured Through Work. You would no longer have to pay for health insurance through your employer, but you would have a premium based on income. The Sanders campaign argues that for most people, that will cost much less, but Thorpe claims that more than 70% of households will pay more. You would no longer need to worry about rising premiums or changes in coverage. However, if you like your current insurance policy, you would not be able to keep it. (People affected: 156 million)
  • On Medicare. Your Medicare plan would expand to cover dental and vision insurance, hearing aids, some long-term care costs, and all prescription drug costs over $200 per year. You would no longer have any premiums or copayments for your care, but you would pay taxes if you’re still working. If you currently use a private Medicare Advantage plan, you would have to switch to the government program. (People affected: 61 million)
  • On Medicaid. You would have more choices for doctors and hospitals, and your out-of-pocket costs would stay low. However, if you’re working, you could pay more in taxes. The Sanders campaign claims that a family of four with an income below $29,000 per year would not have to pay any premiums, but that might not work out if the campaign’s cost estimates turn out to be wrong. (People affected: 73 million)
  • Self-Insured. If you buy your own health insurance — for instance, if you’re self-employed — you would now pay for your coverage through taxes instead. Your out-of-pocket costs could be somewhat higher or significantly lower. You could also gain access to a wider range of doctors and hospitals. (People affected: 21 million)
  • A Veteran. If you currently receive health care through the Veterans Health Administration, your care would not change for at least 10 years after the new plan went into effect. You would use the same health care system and pay nothing out of pocket. (People affected: 9 million)
  • Native American. Your health care would also be unchanged for at least 10 years under the new plan. (People affected: 2 million)

How Medicare for All Could Affect the Health Care System

Medicare for All would shake up pretty much every part of our nation’s health care system, from the doctors who provide care to the insurers who pay for it. Here’s how the plan could affect different types of providers:

  • Doctors and Hospitals. They would most likely receive less pay under the new system because Medicare pays lower rates for all forms of care than private insurers do. On the plus side, they would no longer have to worry about unpaid bills from patients who don’t have insurance or insurers who refuse claims. They would also have to spend less time on paperwork, which would keep their administrative costs down. Still, the lower payment rates could force some hospitals to close if they can no longer meet their expenses.
  • Drug Companies. Once the government takes over the health insurance system, it would be able to negotiate for lower prices on drugs across the board. As a result, the companies that make these drugs would most likely see their profits drop. In the long run, that could discourage them from spending money to develop new medicines.
  • Health Insurers. Private health insurers would most likely go out of business as the new program takes over. As a result, people who work for these companies would lose their jobs if the program goes into effect. Sanders’s plan sets aside up to 1% of the government’s total health spending budget for the first five years of the program to help displaced workers find new jobs.

How Medicare for All Could Affect the Economy

Because the health care system currently makes up about one-sixth of the U.S. economy, anything that affects it is bound to affect the economy as a whole. Some of these changes would be beneficial, others would be harmful, and some are hard to predict.

Here’s how the plan could affect different parts of the economy:

  • Health Insurers. Many companies that sell health insurance would survive because they’re also involved in other businesses. However, their profits and stock prices would take a big hit. While workers at these companies who lose their jobs would receive some aid under Sanders’ plan, investors who lose money would not. According to Bloomberg, just the fact that so many candidates were talking about Medicare for All in 2019 caused health care stocks to fall by more than $28 billion as investors sold off stocks they feared could soon become worthless.
  • Other Large Businesses. Businesses that aren’t involved in health care could get a boost from Medicare for All because it would reduce the burden of paying for health care. According to Thorpe, most U.S. employers would pay less for their employee’s health care coverage with the proposed payroll tax than they do today. That would mean higher profits for these companies, which in turn could boost their stock prices and ability to grow.
  • Small Businesses. Small businesses that don’t currently offer health insurance could lose money as a result of the new payroll tax. Under the ACA, companies with 50 or fewer employees aren’t required to provide health insurance for their employees. However, under Medicare for All, these companies would be subject to the payroll tax for all earnings over $1 million. That could force small companies to reduce wages, cut other benefits, freeze new hiring, or lay off staff.
  • Workers. Some individual workers would pay less out of pocket for health care under Medicare for All than they do today. With more money in their pockets, these workers would most likely spend more on other consumer goods and services, giving a boost to the companies that provide them. However, some people — particularly those with high incomes — would pay more in new taxes than they save on health care. These people could reduce their spending as a result, slowing the economy.

Alternative Health Care Proposals

Polls conducted by KFF show that a slight majority of Americans strongly favor or somewhat favor the idea of a national, single-payer health care plan. A 2020 poll by The Hill found even stronger support, with 69% of Americans saying they favor extending Medicare coverage to all.

However, respondents in the KFF poll were much less likely to support the plan when they heard it would eliminate private insurance, require most Americans to pay more in taxes, or create possible treatment delays.

Because of these problems with Medicare for All, several prominent Democrats — so far no Republicans — have proposed less radical plans that expand access to government-sponsored health care without making it universal. Their ideas fall into two main categories: plans that create a new public option and plans that allow more people to buy into existing programs.

Public Option Plans

These health proposals introduce a new public health insurance program to compete with private insurance plans. Some of them treat this public option as part of Medicare, while others make it a new, separate program.

  • CHOICE Act. Introduced by Jan Schakowsky of Illinois in the House and Sheldon Whitehouse of Rhode Island in the Senate, the Consumer Health Options and Insurance Competition Enhancement (CHOICE) Act would create new public health insurance options to be offered on health care exchanges. These public health options would include gold-, silver- and possibly bronze-level plans for consumers to choose from. All the new plans would be eligible for premium subsidies under Obamacare.
  • Keeping Health Insurance Affordable Act. The Keeping Health Insurance Affordable Act, introduced by Sen. Ben Cardin of Maryland, takes a similar approach to the CHOICE Act. However, this bill has a few extra provisions. For instance, it would expand ACA tax credits and cut drug costs for low-income Medicare users.
  • Choose Medicare Act. Introduced by Sens. Jeff Merkley of Oregon and Chris Murphy of Connecticut, the Choose Medicare Act would create a new type of Medicare plan, called Medicare Part E, that would meet all the requirements for a gold-level plan under the ACA. This public option would be sold on the ACA health care exchanges and would be eligible for subsidies. Employers would also have the option of offering their employees Medicare Part E coverage rather than private insurance.
  • Medicare-X Choice. Sens. Michael Bennet of Colorado, Brian Higgins of New York, and Tim Kaine of Virginia are the sponsors of the Medicare-X Choice Act. Like the Choose Medicare Act, this bill would create a new public option, called Medicare-X, which would compete with other plans in the ACA marketplaces. This plan would become available first in places with only one available insurer and places with few doctors and hospitals, then gradually expand to cover the rest of the country.
  • Medicare for America. The Medicare for America Act, sponsored by Reps. Schakowsky and Rosa DeLauro of Connecticut, is a compromise between Medicare for All and plans that only introduce a public option. It would create a new public health insurance plan that would replace Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the ACA exchanges. The new plan would be the default for all Americans. However, people could opt out and choose a private, employer-sponsored plan instead.

Buy-In Plans

These proposals allow Americans to pay for coverage from either Medicare or Medicaid. They include:

  • Medicare at 50. The Medicare at 50 Act, proposed by Sen. Debbie Stabenow of Michigan, would allow people between the ages of 50 and 64 to pay for Medicare coverage. They would get a package that includes Medicare Parts A, B, and D, with the option of choosing a Medicare Advantage plan through a private insurer. Those who qualify for ACA subsidies could apply the subsidy to their Medicare plan.
  • Medicare Buy-In. The Medicare Buy-In and Health Care Stabilization Act was introduced by Rep. Brian Higgins of New York. Like Stabenow’s bill, it allows people to buy Medicare coverage starting at age 50 and to use subsidies to pay for it. However, Higgins’s bill also expands ACA subsidies for everyone, not just for those buying into Medicare.
  • State Public Option Act. Rep. Ben Ray Luján and Sen. Brian Schatz have both introduced bills to allow Americans to buy into Medicaid rather than Medicare. Because Medicaid is administered by the states rather than the federal government, the details of what this plan would cover might vary from state to state. However, any form of the plan would have to meet the ACA requirements for essential coverage. Several states are also considering plans like this on their own.

The KFF polls show that some of these ideas enjoy much broader support than Medicare for All. Around 75% of respondents say they would support a Medicaid buy-in program or a Medicare buy-in for people ages 50 and up. By contrast, only 53% say they strongly or somewhat favor Medicare for All.


Final Word

It’s too early to say whether Medicare for All has any reasonable chance of actually becoming law. The latest version of Sanders’ bill attracted 14 cosponsors in the Senate, and a corresponding bill in the House of Representatives got 118. However, neither bill received any support at all among Republicans, and Democrats aren’t exactly unified behind it.

But even if the proposal ultimately goes nowhere, having a debate about it is still useful. It calls attention to what’s wrong with our current health care system and encourages both political leaders and the public to think about all possible options for fixing it. Already, it has inspired other Democrats, including President Joe Biden, to put forward their own plans to provide universal coverage through a public option, a buy-in program, or both.

With large majorities of Americans saying they favor more access to coverage, the pressure is on for Congress to provide it one way or another. Faced with the prospect that Democrats — who now control both houses of Congress — might manage to pass Medicare for All without their support, some Republicans might decide it’s better to compromise on another bill that’s more to their liking. So even if we don’t get Medicare for All, there’s at least a chance of coverage for all.

Amy Livingston
Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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