Comment by AnthonyMouse | Hacker News Reader

Comment by AnthonyMouse | Hacker News Reader

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> Another example of how Medicare for All would help business. Just remove healthcare as an employee benefit entirely.

The problem there is that the existing Medicare system is predicated on paying less for the same things than private insurance and then letting high private insurance premiums subsidize the Medicare system. Which obviously doesn't work when everyone is on Medicare, so the cost per Medicare patient would go up at the same time as you're adding hundreds of millions of people to it.

So the Medicare tax would have to increase dramatically, but the Medicare tax is pretty regressive. Meanwhile a lot of companies would then get away with discontinuing their private insurance coverage without increasing employee compensation by the same amount. So you're basically talking about a huge transfer of wealth from the middle class to corporations.

We should probably look into some other method of dismantling the employer-provided healthcare system. Maybe something that involves primarily catastrophic coverage as a baseline.

I'm not sure that's how Medicare is 'predicated' - the fundamental assumption is that you get to a) reduce administrative overhead due to a centralized system, and b) using the power of a single-payer system to negotiate lower fees - it's reducing the profit margin of private insurers, not relying on them to subsidize Medicare.

> I'm not sure that's how Medicare is 'predicated' - the fundamental assumption is that you get to a) reduce administrative overhead due to a centralized system, and b) using the power of a single-payer system to negotiate lower fees

This fundamental assumption is wrong, because Medicare doesn't negotiate. Medicare sets rates by fiat, and providers don't have the ability to negotiate rates with Medicare the way they negotiate with private payers. Medicare reimburses rates that are below COGS, which means that providers actually lose money on Medicare patients and have to cover their losses with the margins they make on privately-insured patients. (Medicare acknowledges this, and in fact will pay separate stipends to providers who don't see enough privately-insured patients to cover the losses on Medicare patients).

OP is correct - Medicare's funding model is not sustainable without private insurers to provide the difference.

> it's reducing the profit margin of private insurers, not relying on them to subsidize Medicare

Uh, where do you think that extra money goes?

Presumably we would still have private insurance, just like Medicare patients have private insurance now. You'd use your private insurance to do things like skip ahead in line or not see your primary care provider first or getting drugs that aren't on medicare's schedule.

We would also presumably still have doctors who don't take Medicare and can charge whatever they want, and then you'd want private insurance to see those doctors, who presumably would be the best doctors, and the ones that could get away with such things.

You can't get the same amount of cross-subsidy out of that because nobody is going to want to pay a ~20% Medicare tax plus $5000/year for $1000 value in supplemental insurance with $4000 in cross-subsidy.

> So the Medicare tax would have to increase dramatically, but the Medicare tax is pretty regressive.

So, if you need to change it anyway, make it less regressive at the same time.

Medicare for all would get rid of high private insurance premiums, but it would also raise payments by people who are currently uninsured, and would have higher payment levels than Medicaid. So the decrease in provider payments would, in total, be something like 10%, which could be compensated by lower administrative costs, since hospitals would have fewer insurance companies to deal with.

> Medicare for all would get rid of high private insurance premiums, but it would also raise payments by people who are currently uninsured, and would have higher payment levels than Medicaid. So the decrease in provider payments would, in total, be something like 10%, which could be compensated by lower administrative costs, since hospitals would have fewer insurance companies to deal with.

Your numbers are completely out of whack. First of all, Medicare pays rates that are below COGS. That means that, at the current reimbursement rates, providers wouldn't want to see more Medicare patients; the more Medicare patients they see, the faster they lose money.

I have no idea where you're pulling this 10% number from. But administrative costs due to private insurance companies are nowhere near 10% of total reimbursements - that's an absurd figure. Most administrative costs have nothing to do with the number of insurance companies you're dealing with; it's to do with the overhead of providing care and billing[0]. Reducing the number of payers doesn't reduce that fixed cost.

[0] Yes, billing is still an issue with Medicare. How do you think Medicare knows how much to pay providers in the first place?

the Medicare tax would have to increase dramatically

Would it? It already covers all the old people who suck down almost all the healthcare expenses already. Expanding it would cover younger and healthier people. I don't know the numbers...that's just my quick take.

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