May 06, 2019

As the US House held its hearing on Medicare-for-All, the New York Times and Wall Street Journal reported on the Congressional Budget Office’s (CBO’s) paper Key Design Components and Considerations for Establishing a Single-Payer Health Care System. The report describes features of different single-payer health care systems and many design choices that policymakers would need to make to implement “Medicare-for-All” and Medicare expansion proposals. However, unlike many CBO reports, this paper does not provide cost estimates for these proposals.

Why Your CEO May Care

Your CEO may ask how likely is Medicare expansion or Medicare-for-all, and how would it affect your company’s employees, benefit offerings, or lines of business.

As the 2020 election approaches, health care expenses continue to rise faster than overall economic growth and 27 million Americans remain uninsured, lawmakers—especially progressive Democrats—are putting forth a number of health care proposals ranging from public insurance options that would be offered alongside private coverage, to expanding Medicare eligibility, to a single-payer Medicare-for-all system that would eliminate private coverage. Advocates believe that these approaches would better control costs, primarily by bringing provider payments closer to those under Medicare and reducing administrative costs. Many of these proposals would eliminate premiums and out-of-pocket costs but would require new taxes on payroll, income, and/or unearned income.

Though there is a lot of talk in Washington and on the campaign trail about Medicare-for-All, any change in policy is likely to be far into the future if at all for the following reasons:

• While the proposals have broad support among Democrats, the Democratic leadership has not yet been on board and it is unclear whether a majority in the House support it;
• It is unlikely to advance in the Senate nor be signed by the President;
• Though a majority support the idea, support falls off when people find they may lose their existing coverage, pay higher taxes, or may wait longer for care.

• As noted by the CBO, the proposals currently do not include enough details to fully assess financial and other impacts on individuals and companies. As companies compare proposals and their potential effects we will continue to evaluate proposals for the following:
• How they would affect employer-sponsored coverage (offered alongside or replacing employer-sponsored coverage);
• Impact on employer-sponsored retiree coverage, pre- and post-Medicare;
• Whether they would include requirements or incentives for providers to improve quality;
• Whether they would drive innovation to improve health care delivery and quality;
• How they would affect costs and coverage, by income, age, health status, and geography;
• Impacts on current health care spending (taxes, premiums, out-of-pocket costs)
• Funding sources for the proposed system (private, federal, state, and local and the distributional impacts);
• Whether proposed funding sources would fully fund the system and whether there are any limits on those revenue streams;
• Assumptions for cost control;
• Impacts on provider payment rates and the mix of payments by payer type;
• How changes in provider payment rates and the mix of payers would affect access to care;
• Effects on the health care workforce pipeline and the mix of specialties; and
• Impacts on the current Medicare program, including Medicare Advantage. 

Additional Resources

• Key Design Components and Considerations for Establishing a Single-Payer Health Care System (CBO paper)
• Compare Medicare-for-All and Public Plan Proposals

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