With health care reform (or repeal depending on your point of view) in full swing, there has been a lot of talk about expanding Medicare to everyone. "Medicare for all," they say.
I've noticed among various discussions on blog posts and in the media that several people were referring to Medicare as a single-payer system. It's not only the general population who believes this, but also well-known journalists (e.g., Paul Krugman) and politicians (e.g., John Conyers Jr.). Even the Wikipedia page devoted to this system refers to Medicare as an example of such administrative structure, although only for people above 65.
Coming from a country that is known to have a single-payer system (as seen in the quotes further below), I couldn't understand why people were referring to Medicare as a single-payer entity. Therefore, I decided to look into it in greater detail to demystify the myth from reality. To help in this regard, I'll actually compare the Medicare program with the one used in Canada.
Since I already pointed out the Wikipedia page, let's see how the article (which lacks proper citations) defines the system:
- "Single-payer health care is medical care funded from a single insurance pool, run by the state. Under a single-payer system, universal health care for an entire population can be financed from a pool to which many parties - employees, employers, and the state - have contributed."
Slight variations of this definition have been used on different websites, as seen here. You'll notice that this definition doesn't address who is the "single payer." We'll get to other definitions below, but first let's look at the Medicare program to answer the question:
Is Medicare a "single-payer" system?
As discussed above, Medicare is a health insurance policy for people above 65. The program also covers qualified people under 65 who have certain disabilities or have an End-Stage Renal Disease (ESRD). The public insurance is divided into four parts:
- Part A - Hospital Insurance
- Part B - Medical Insurance
- Part C - Advantage Plan (for vision, hearing, and dental among others)
- Part D - Prescription Drug Coverage
Since I'm comparing Medicare with the Canadian system, I'll focus my discussion on Parts A and B, which are also the two primary components covered by the public health insurance up north.
The main characteristics of Part A are as follows (taken directly from the Medicare.gov website):
- "Medicare Part A (Hospital Insurance) pays for inpatient hospital stays, skilled nursing facility care, and some home health care. No premiums if the person (or the spouse) has over 40 quarters of Medicare-covered employment. (There is a prorated monthly premium, however, if the person does not complete the 40 quarters.)"
- "Medicare Part A pays all covered hospital, skilled nursing facility and home health care benefits for each benefit period except for the deductible. For 2011, the deductible is $1,132 for any hospital stay 60 days long or less. For any hospital stay lasting longer than 60 days, a Medicare copayment will apply. For stays lasting 61 to 90 days, you will have to pay a Medicare copayment of $283 per day. For stays of 91 to 150 days, you will have to pay $566 per day. For any hospital stay that lasts longer than 150 days within a single benefit period, you will be required to pay the full cost for each day after the 150th day. For people on Medicare who receive care in a skilled nursing facility, a Medicare copayment of $141.50 per day will apply to days 21 through 100. Medicare will cover days 1 through 20 in full. You will be required to pay in full any days after the 100th day."
The key characteristics for Part B are:
- "Medicare Part B (Medical Insurance) pays for physician services, outpatient hospital services, certain home health services, and durable medical equipment. Monthly premiums vary from $4.90 to $161.50 (or more) depending on annual household income."
- "Medicare Part B includes a yearly deductible of $162 in 2011. This deductible will be applied to health care costs that involve physician services, outpatient hospital services, certain home health services, and durable medical equipment. Once the deductible is met, you will be required to pay only 20% of the Medicare-approved amount charged by providers for your health care services. In 2011, because of the new health care law, many preventive services will be provided at no cost to you. These free benefits will not be affected by the deductible."
I'm not sure about you, but I think a patient who paid taxes (or pay premiums for Part B) to get medical coverage after turning 65 certainly has to pay a lot of money for a hospital stay or outpatient hospital services. Both parts actually have very high deductibles, copays and coinsurances (the 20% described above). As a bonus, Medicare won't pay anything if you stay too long in the hospital. Good luck if you end up in a coma…
Based on what we've seen so far, the payment structure can be illustrated in the following chart:
With the chart, it starts to become clear that we don't have one, but two payers: Medicare and you, the patient. Change the names "Medicare Part A" or "Medicare Part B" above with "Blue Cross Blue Shield" and we have the same characteristics as my medical plan (paid for by myself and my employer). I have yet to hear anybody referring to BCBS as a single-payer system.
I'm sure some of you may dispute this point, but I suggest that you perform a keyword search with the terms "single-payer" or "single payer" on the Medicare website. Looking at the results, you'll notice that not once does Medicare refer to itself as a single-payer. In fact, the keyword results show that Medicare is characterized as a multi-payer system! For instance, the results indicate that the payment structure is characterized as a system of "primary" and "secondary" payers.
Don't believe me? Check out this Medicare document.
We know that Medicare doesn't cover all medical expenses. In fact, the program provides a service to U.S. citizens to help cover their entire medical costs by referring them to private medical insurance companies. This plan is known as Medigap.
Here are two examples of "supplemental Medicare insurance":
- "Blue Cross Blue Shield: We offer a choice of seven Medicare Supplement Insurance plans: Plan F, Plan F High Deductible, and Plan G pay the Medicare Part A hospital deductible and coinsurance, the skilled nursing facility coinsurance and foreign travel emergency care. Plan K and Plan L are low-cost, cost-sharing Medicare Supplement Insurance plans that require you to pay a higher percentage of the costs in return for reduced premiums."
- "Medicare Supplemental Insurance: Welcome to MedicareSupplementalInsurance.com where we strive to offer information, helping you receive the best Medicare supplemental insurance policy possible. While every person has different needs we try to outline policies that fit you best. Medicare Supplemental Insurance is a policy provided by private insurance companies that fill the gaps in coverage that your basic Medicare Part A and Medicare Part B do not cover. Parts A and B, while covering close to 80% of your medical bills and expenses certainly do not cover them all."
Given this additional piece of information, we can now define the payment structure of the Medicare program as follows:
I'm sure you'll agree with me that we're getting steadily further away from a single-payer entity.
Remember when I was talking about different definitions of "single-payer" above?
Below are different sources I found that properly describe the attributes of a "single-payer" system.
The Physicians for a National Health Program (PNHP) provides a very detailed definition for people who have limited knowledge on this topic:
- "Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or "payer." In the case of health care, a single-payer system would be set up such that one entity-a government-run organization-would collect all health care fees, and pay out all health care costs…. individuals would receive no bills, and copayment and deductibles would be eliminated."
What's interesting is that not once does the PNHP use Medicare as an example of a single-payer system.
Looking at different health-related textbooks or medical dictionaries, we get this:
- "Single payer system: a type of health care in which there is only one purchaser of health care services. Canada uses the single-payer system."
- "Health care system, in which all medical services are paid by a single reimbursement agency. See Canadian plan."
- "An approach to health care financing with only one source of money for paying health care providers."
Does anyone notice a common characteristic among these definitions?
If not, let me help you:
- All health care providers are paid by one single entity. Not two, not three, not four, but only one payer.
Unsurprisingly, many of these definitions refer to the Canadian health care system as an example of a single-payer system.
I'm sure you're interested to learn about how the payment structure works in my homeland (for the equivalent of Medicare Parts A and B).
Well, here it is:
When a patient who lives, say, in Timmins, Ontario, shows up at the emergency room, and/or requires surgery, and/or stays a long time in a hospital bed*, or goes for a regular medical visit to a doctor working in a private practice, the patient doesn't pay anything, since all the fees have been collected in the form of taxes. No copays, no coinsurances or third-party payments to a private insurance company. Furthermore, the patient doesn't receive any statement about the medical service received. How's that for a cost cutting measure? All the paperwork travels between the government and the health care provider. Pretty cool, eh?
Maybe we're playing semantics here, but the reason why I'm raising this issue is that the current Medicare program works exactly like a private health care insurance provider. The only difference is the size of the insurance pool combined with lower overhead costs. This means that the structure of the program is actually designed to prevent people from getting all the medical assistance they require. The copays, deductibles and coinsurances have a huge effect on poor people and their access to medical services, which explains why the PNHP doesn't want to use them (copays, etc.) and the Canadian health system doesn't have any.
The bottom line is this:
Medicare is a public insurance program, but is NOT based on a single-payer system.
If you want to see a real single-payer system in the U.S., read my post about the U.S. Military Health System.
*The provincial insurance covers all the medical expenses/treatments and basic hospital room accommodations. The insurance usually won't cover upgrades for a single room with full access to a TV or other perks for instance. The patient will need to cover these extras (which should not be confused with copays, deductibles or coinsurances described above) if he or she wants them.
Thanks to Anna_Bird and Taste_is_Sweet for their input.
Bonus figure:
For those interested to know about what happened to the national health care expenditures when Medicare and a 'real' single-payer system were introduced in the U.S. (blue line) and Canada (red line), respectively, can see the results here:
Taken from Ballooning health care cost: is Medicare the culprit?
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Thanks! There is a small explanation of the colors at the bottom of the figure. Indeed, blue is for the US and red is for Canada.
Thank you, I've thought this about Medicare... I'm glad that you could clarify it. I didn't think there was any payment when services were rendered in Canada... I think you're right -- as I understand it -- Medicare in the US, works like a government run insurance company.
Our system is buggered-up, eh?
Paul: I'm glad you enjoyed the post. The system is definitely broken.
Myriam: I hear ya! ;-)
For example, let's say that we had a health care system very similar to the Canadian system, except that our system had modest deductibles and copays. If such a system were affordable, and no one had to worry about going bankrupt or being unable to obtain care for financial reasons, do you think such a system would be acceptable? It wouldn't be a single payor system, strictly defined, but it would be, in my opinion, far better than what we have now.
I guess my concern is that I wouldn't want us to be locked in to a specific label or concept. I want to have a system in which people can get the care they need for a reasonable amount, and that no one goes broke or is denied service because they can't afford it. If we have that, then I don't care if we call that single payor or HMO or socialized medicine or anything else.
Am I missing something? Is the label important? If people had to pay a modest and affordable amount for health care, would that be unacceptable? I'm not trying to pick a fight over this, just curious as to your opinion on these issues.
Also, if you have time, I would be interested to know how Canada handles long-term nursing home care, dental care, and vision care.
Perhaps the miracle is that it works better than the employer-based mishmash the rest of us have. And while we are on the subject, we should point out that the portion of premiums and actual medical expenses to be borne under both American systems has gotten really expensive over the last decade, with no end to the erosion in sight.
Our health care theme song should be Tom Petty's "Breakdown." Or a new song..."American health care, get away from me-ee."
Needless to say, I was ignored, as was everyone else not in the pocket of the health insurance industry. Strictly speaking, Medicare for everybody might not be single-payer, but it is as close as Americans are likely to get -- at least in my lifetime.
Given what we’ve seen about the Medicare program, there is a lot of room for improvement. It’s better than not having one at all (especially compared to those useless personal health accounts) and I’m sure I can dig studies that showed the proportion of people above 65 who lived under the poverty line dropped significantly after it was introduced in the mid-60s. The Medicare program was implemented for that reason, if I remember correctly.
To get the best plan possible, we should not have any copay, deductibles or coinsurances, as suggested by the PNHP. According to this organization, even a two-payer system can significantly increase the global overhead costs. Furthermore, it can deter poor people from getting access to appropriate medical services, even if the fees are nominal. I understand that the program has a special component to help poor people, but there are still are some fees attached to it. I know people who cannot not even afford a copay of $5 or $10 in the event they need to see a doctor. Back in the mid-90s, there were some talks to impose a $5 “fee” for people who show up at the emergency in Quebec (in order to reduce the demand). The proposal was quickly shot down, because of the poor people issue I just discussed above and, most importantly, it went against the “universality” of the single-payer system (equal access independent of income level).
If I have the time, I may try to look into the long-term care program. If the Quebec public insurance program didn’t change, the government covered yearly teeth cleaning and vision tests, but only for kids below 12 years old (it may be 18). For the rest, dental and vision will only be covered if it is medical related. For instance, if someone is injured in an accident and needs reconstructive surgery (in order to eat properly if his or her jaw/teeth have been busted). Obviously, cosmetic surgery is not covered.
I hope this information wil be useful.
I think the problem is that we've all grown up with the current system and most of us have experienced nothing else. One of our most important personal documents is our health insurance card. The first part of every doctor visit is the presentation of The Card and the payment of any co-pay.
For Americans the annual employment ritual of the "open enrollment" is something that we expect, and we wait with great anticipation to see what health insurance options will be offered this year. For most Americans, when we think about taking a new job, the health insurance plan offered is almost as important -- and sometimes just as important -- as the offered salary.
The current system is so engrained in us that it is difficult to think of some other way of doing things. For that we have to look to other countries, as there is no adequate model to look to here.
About a year ago I had some heart problems. The wife called 911, and when I was in the ambulance and the emergency techs were giving me oxygen and an IV, my big concern was whether I had my insurance card with me, whether I would be taken to a hospital covered by my plan, whether the hospital stay would be inpatient and thus covered at 100 percent or whether it would be outpatient and covered at only 80 percent.
At that moment, rather than worrying about whether I would live or die, my main concern was about health insurance. Live or die, I was worried about how much it would all cost. Live or die, I was worried that I might be screwed over by something in the "fine print" of the insurance policy. Unfortunately, this is one of the defining characteristics of what it means to be an American. It can be hard to imagine that it could be otherwise. And there are many powerful people in the country working hard to make sure that it will never be otherwise.
Tom: Ditto here. Medicare is the second best thing. Thanks for your comment.
Mishisma: I hear you about your trip to the emergency room. I’m glad you were okay in the end. As you already know, I had a similar experience. Asking about the insurance status was primordial both inside the emergency vehicle and at the hospital. Under a single-payer system, the emergency crew doesn’t need to worry about that stuff (at least not that much, since there is still a nominal fee for using an ambulance in Ontario). For the hospital, there is also an important advantage that is rarely discussed: they will always get paid (by the single-payer entity).
"I think the problem is that we've all grown up with the current system and most of us have experienced nothing else."
Indeed. Problem is our current employer-based health-insurance system was designed in and for a time and place that no longer exist. It was born in a time of near-universal employment, a time when the majority of workers had a couple of jobs in a lifetime, a time when unions were powerful and benefits were negotiated rather than grudgingly dispensed on a take-it-or-leave-it basis, a time when loyalty was a two-way street, a time when the top-tax bracket was 90+% and the gap between rich and poor was not astronomical, a time when Republicans were the grown-ups in the room, and a time when parents could look forward to passing on a better world than the one they found.
Problem is the masters of greed and their enablers in govt have obliterated that world, problem is they and a substantial portion of the populace unwilling to let go of the past continue to act as though that place still exists. But it exists only in the fetid imaginations of the ignorant or willfully blind.
http://www.medicareforall.org/pages/Improved_Medicare_for_All
(Hint: You did well, but Medicare is even worse than how you described it. Improved Medicare for All is much better.)
-- Bob the Health and Health Care Advocate
Bob: I have no doubt that Medicare is worse than we think. Although I didn't touch this aspect directly, I have firsthand experience based on my parents-in-law latest visit. This could be a post on its own. To be short, when they showed up at the local medical clinic run by a large hospital, they thought Medicare was like the system in Canada (they are eligible for this program) and everything would be covered. Two or three months later, they received a bill for about $400 (which was cut in half because of the generosity of the hospital! This statement was actually written in the letter attached to the bill). You should have seen how much they praised the Canadian (Ontario to be specific) system after this experience. I’ll check out your site very shortly.
Paul J. O’Rourke, thanks for expressing your gratefulness. And thanks, Kanuk, also, for sharing about gratefulness regarding Canada's (Ontario's) health care. It's important for Americans to know that Canadians like (that is love) their health care by an overwhelming percentage. I've seen results that range from 85-86% up to 92-93%.
http://www.mforall.org/p/Canada
Every Canadian should be grateful. Many of the (small percentage of) Canadians who complain about the Canadian health care would probably praise it in some way if a person spoke with them for some minutes. I live in a very global city in Michigan, meaning that there are people living here who come from all over the world. One of our Canadian-American neighbor family's grown son was working in a western state in the U.S., had an accident which put he and his folks into quite a huge medical debt. That young man is now living in Canada for good health care at a decent price.
During my 4.5 years of living in Canada roughly 20 years ago I felt that there was a peace of mind of which most Americans could not begin to imagine. Much of the cause of that peace of mind is the health care for all system.
Reference: http://www.mforall.org/p/Peace_of_Mind
That Canada web page (mforall.org/p/Canada) has some outstanding set of testimonials of Canadians (via a video of 11 Canadians) and testimonials of Americans who live and work in Canada. Peace of mind at its finest.
- Bob the Health and Health Care Advocate
http://www.mforall.org/p/Explanation
At that explanation web page those of us who have been developing the Medicare for All website give you many side-by-side comparisons beyond just the one of Medicare to improved Medicare for All. For example, you will find a link there to a comparison of Obamacare (that is, the Affordable Care Act of 2010) to improved Medicare for All ... and several other side-by-side comparisons.
http://www.mforall.org/p/Explanation#compare
- Bob the Health and Health Care Advocate
The case against the U.S. health care system
Let's Spread the Risk! (I mean Health care; Not Flu.)
Let's compare Public and Private health care costs, eh?
Health Care Comparison: Universal vs U.S - Part II
Here's my re-post ...
Improved Medicare for All is explained at the explanation web page.
At that explanation web page those of us who have been developing the Medicare for All website give you many side-by-side comparisons beyond just the one of Medicare to improved Medicare for All. For example, you will find a link there to a comparison of Obamacare (that is, the Affordable Care Act of 2010) to improved Medicare for All ... and several other side-by-side
comparisons.
-- Bob the Health and Health Care Advocate
Here is a link to the side-by-side comparison of Medicare to improved Medicare for All.
-- Bob the Health and Health Care Advocate
Since you have a lot of pertinent information, it may be worthwhile to write a detailed blog post on this subject. This way you may have a much better exposure.
1. the overwhelming support by Canadians regarding their own health care
2. experiences and impressions Canadians have about their health care
3. an overall expectation for what our health care for all will be like compared to Canada's health care for all: similar? better? (answer: better!)
Major Bonus. Whatever you do, my fellow Americans, keep in mind that you will finally have what other countries have had for decades:
peace of mind.
And ours will be the best considering our comparative notes about the systems of Canada and France and Germany.
-- Bob the Health and Health Care Advocate
It’s a matter of marketing. Earlier this year I was feeling a bit super-charged about having the “advertising” be “Improved Medicare for All”, such as for signs and bumper stickers. A few months ago I asked for feedback from single-payer activists across the country. As a result of that feedback, we decided to have only “Medicare for All” on promotional items and use “improved Medicare for All” within text, such as newspaper articles and blog posts.
As you probably appreciate, for marketing purposes it is best to use the fewest number of words for simplicity and readability. Ah, so many details in getting health care for everyone. Also, hundreds of "Medicare for All" posters have been used in rallies all across the country. Might as well keep all of them and use them!
The shorter the better for promotional items, such seen here: Medicare for All. (used here for informational purposes, not promoting sales).
- Bob the Health and Health Care Advocate
http://www.cafepress.com/mforall/7938719