Medicare for All: Should the U.S. Adopt a Single-Payer Healthcare System? (S. 1129)

What is S. 1129?

(Updated May 13, 2019)

This bill — the Medicare for All Act — would establish a Universal Medical Program to serve as a national health insurance program for every resident of the U.S., including the District of Columbia and the territories. In doing this, this bill would also eliminate all premiums, co-pays, and deductibles as well as network restrictions.

It'd provide individuals residing in the U.S. with healthcare for all “medically necessary care” under a single-payer healthcare system. "Medically necessary care" would include: emergency services and inpatient drugs; ambulatory patient services; primary and preventive services, including disease management; prescription drugs, medical devices, and biological products; mental health and substance abuse treatment services, including inpatient care; laboratory and diagnostic services; reproductive, maternity, and newborn care; pediatrics; oral health and vision; rehabilitative and habilitative services and devices; emergency services and transportation; home- and communitybased long-term services and supports; other items as deemed necessary. Patients would be able to choose to receive care from any qualified institution, agency, or individual.

Only public or nonprofit institutions would be allowed to participate. Health insurers would be prohibited from selling insurance that duplicates the benefits provided under this bill, but could sell benefits that aren’t medically necessary such as cosmetic surgery.

People currently enrolled in federal healthcare programs through the Dept. of Veterans Affairs (VA) or the Indian Health Service would maintain their current medical benefits and services.

A would be established within the Dept. of Health and Human Services (HHS) in order to oversee and administer this bill. This agency would be headed by the HHS Secretary and six other Senate-confirmed individuals. The agency would be required to which would include: the cost of covered health services; quality assessment activities; health professional education expenditures; administrative costs; innovation; operating and other expenditures; capital expenditures; and public health activities. First the first five years after this bill's enactment, the budget may also provide transition assistance to health insurance administration workers who may be displaced because of this bill's implementation.

This bill would also establish the roles of Beneficiary Ombudsman to assist individuals enrolled in the Act and an Inspector General for the Board.

This bill would also establish an American Health Quality Council to review and evaluate all practice guidelines, profile practices and patterns of health care, conduct quality reviews, and report to the Universal Medicare Agency on outcomes research.  The Council would also evaluate and address healthcare disparities.

Those currently on Medicare, Medicaid, FEHB, SCHIP, and any other federal health insurance program would be transitioned into the Universal Medicare Program. For all others, there would be a four-year phase in period, established under a Medicare Transition Plan: in year one, it'd lower to Medicare age to 55, then 45 in year two and 35 in year three. The current two-year waiting period for Medicare coverage for individuals with disabilities would be eliminated. Those currently on private health coverage would receive continuity of care via a smooth transition from their private programs to Universal Medicare.

While this bill’s sponsor intends to raise taxes to cover the cost of this program, those provisions aren’t included within this legislation. Information about their proposed taxes can be found below.

The effective date of benefits would be four years after this bill's enactment (starting January 1 of that year).

Argument in favor

A single-payer healthcare system is the best way to ensure that all Americans have access to the healthcare they need without having to worry about paying for health insurance. It would be more efficient than the status quo at controlling costs and produce better outcomes while bringing the U.S. in line with other developed nations with single-payer systems.

Argument opposed

A single-payer healthcare system would concentrate too much power in the federal government, creating inefficiencies in the healthcare market. It would reduce physicians’ pay and consequently the quality of care they provide, and lead to long wait lists for patients to see their doctor — all while imposing a massive tax increase on middle-class Americans.

Impact

American healthcare consumers and taxpayers; healthcare providers; insurers; and the federal government.

Cost of S. 1129

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sen. Bernie Sanders (I-VT) reintroduced this bill from the 115th Congress to guarantee healthcare to every American as a "right, not a privilege": 

Last Congress, Sen. Sanders introduced this bill to create a single-payer healthcare system:

“Today, we begin the long and difficult struggle to end the international embarrassment of the Untied States being the only major country on earth not to guarantee health care to all its people. At a time when millions of Americans do not have access to affordable health care, the Republicans, funded by the Koch brothers, are trying to take away health care from up to 32 million more. We have a better idea: guarantee health care to all people as a right, not a privilege, through a Medicare for All, single-payer health care program.”

Sen. Sanders has made Medicare for all a core policy proposal both times he's run for the Democratic presidential nomination (for the 2016 and 2020 elections). He's also had a long track record of backing Medicare for All as a concept, including offering legislation similar to this bill in 2013 (at that time, it had no cosponsors). While this bill itself doesn’t contain any tax increases, last year, Sen. Sanders suggested imposing new taxes and raise existing taxes to cover the cost of Medicare for All (which he projects will cost $1.38 trillion per year), including:

A 6.2% income-based healthcare premium paid by employers.
A 2.2% income-based premium paid by households.
Raising income tax brackets back to pre-Tax Cuts and Jobs Act levels and adding new brackets (37% between $250k-$500k, 43% between $500k-$2m, 48% between $2m-$10m, and 52% above $10m).
Taxing capital gains and dividends at the same rates as regular income.
Reducing tax deductions for households earning more than $250k.
Increasing the estate tax (aka the death tax) and reducing the exemption threshold.
An estimated $310 billion would come from funding that otherwise would’ve been spent on other government healthcare programs, such as the original Medicare.

Looking at Sen. Sanders' proposed funding for this bill, Reason features editor Peter Suderman argues that it's clear Sen. Sanders "has no idea" how to pay for Medicare for All: 

"Sanders, it's clear, has no idea how to pay for the program he has in mind. His proposal is vastly more generous than comparable universal coverage programs run by other countries. Multiple estimates have found that it would add about $32 trillion to the federal tab over a decade, even under generous assumptions. Yet Sanders has never proposed a specific financing mechanism to offset the massive increase in government spending his single-payer plan would entail."

Writing in Jacobin magazine, Tim Higginbotham, an organizer with the Democratic Socialists of America’s Medicare for All campaign, argues that Medicare for All "will always win on the policy merits": 

"The Medicare for All Act represents a kind of politics never yet realized in the United States: one that puts human needs over industry profits by guaranteeing universal benefits with no means-testing or exclusions... Medicare for All will always win on the policy merits. Pelosi’s plan to reform the ACA will continue to leave millions uninsured; Medicare for All will cover every American resident as a right. O’Rourke’s Medicare for America plan will saddle patients with thousands of dollars in out-of-pocket costs; Medicare for All will make health care free at the point of use. Trump’s plan to stick with the current system will cost $42.9 trillion over the next ten years; Medicare for All will cost $5.1 trillion less."

Detractors argue that a single-payer healthcare system would cost taxpayers far more than Sanders projects and have a detrimental impact on the economy. An analysis by the Mercatus Center found that Sanders’ Medicare for All would cost at least $32.6 trillion over 10 years — or roughly $3.26 trillion per year — while the government’s spending on healthcare would near 13% in 2031 and continue to grow thereafter. 

Additionally, the study’s author said those “estimates are conservative because they assume the legislation achieves its sponsors’ goals of dramatically reducing payments to health providers, in addition to substantially reducing drug prices and administrative costs.” They add:

“A doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan… M4A would markedly increase the demand for healthcare services while simultaneously cutting payments to providers by more than 40 percent relative to private insurance rates, reducing payments to levels that are lower on average than providers’ current costs of providing care. It cannot be known how much providers will react to these losses by reducing the availability of existing health services, the quality of such services, or both.”

Sen. Jeanne Shaheen (D-NH), who cosponsored this bill in the 115th Congress, decided not to support it this time, as she believes "[t]here are faster ways to reach universal coverage by building on the progress we’ve made through the Affordable Care Act, while addressing the high cost of care and medications." Sen. Amy Klobuchar (D-MN), who's also seeking the Democratic presidential nomination for 2020, argues a public option using Medicare or Medicaid could be used to extend more care to the uninsured. 

Other Democrats, including House Speaker Nancy Pelosi (D-CA), say that Democrats should focus on strengthening the ACA, which is based on a private insurance industry, rather than considering Medicare for All proposals. Sen. Heidi Heitkamp, a former Democratic senator from North Dakota and founder of the One Country Project, espouses this position in a Washington Post op-ed and argues Medicare for All is a liability for the Democratic Party in the 2020 election: 

"[I]n their rush to earn the support of the party’s highly energized primary electorate, some of the best prospective Democratic standard- bearers are embracing positions that would present serious risks when it comes to challenging and defeating Trump in the general election. An area of particular alarm is health care. With Republicans in disarray — unable to legislate or even agree among themselves on a reasonable path forward — this issue is one of the Democratic Party’s greatest strengths. Under President Barack Obama’s leadership, Democrats in Congress did the right thing in 2010 by passing the Affordable Care Act. And though Democrats paid a high price for their triumph in ensuing midterm election cycles, the American people have largely come around, now that the ACA’s many benefits have become clear and Republicans’ inflammatory rhetoric has been debunked by reality... When I see some potential Democratic nominees expressing their support for Medicare-for-all, which would cast aside the ACA and start all over again with a single, government-run health-care program into which every American would be enrolled, I worry that the candidates are playing directly into the hands of Trump and Senate Majority Leader Mitch McConnell (R-KY). Campaigning on Medicare-for-all, Democrats would give Trump a costly, drastic proposal to attack. Better to put Trump on defense about health care, forcing him to answer for his relentless attacks on the ACA, challenging its constitutionality in the courts and endangering coverage for about 20 million Americans who have benefited from the law."

The pharmaceutical industry (which would be required to negotiate with the government on drug prices under this bill) and health insurers oppose this bill. In a statement, America's Health Insurance Plans (AHIP), the lobby group for health insurers, argues that this bill would cause Americans to "pay more, to wait longer, for worse care." As an alternative, AHIP calls for a focus on "real solutions that deliver real results, not a one-size-fits-all government system."

This bill has 14 Democratic cosponsors in the 116th Congress. Last Congress, it had the support of 16 Democratic cosponsors and didn't see committee action.

63 national organizations and unions have signed on to support this bill in the 116th Congress. They include: 350.org, AIDS Healthcare Foundation, Amalgamated Transit Union, American Federation of Teachers, American Medical Student Association, American Sustainable Business Council, Americans for Democratic Action, Black Women's Health Imperative, Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters, Business Initiative for Health Policy, Center for Popular Democracy, Center for Popular Democracy Action, Coalition of Labor Union Women, CREDO, DailyKos, Demand Progress, Democracy for America, Democratic Socialists of America, Demos, Faith in Healthcare, Food & Water Watch, Friends of the Earth, Health Care Now, Health GAP (Global Access Project), Indivisible, International Association of Machinists and Aerospace Workers, International Federation of Professional and Technical Engineers, Just Care USA, Justice Democrats, Labor Campaign for Single Payer, Latinos for a Secure Retirement, Latinos for Healthcare Equity, League of United Latin American Citizens, MoveOn, MPower Change, National Center for Lesbian Rights,National Collaborative for Health Equity, National Domestic Workers Alliance, National Economic and Social Rights Initiative, National Education Association, National Health Care for the Homeless Council, National Immigration Law Center, National Nurses United, National Organization for Women, New York Nurses Association, Opioid Network, Our Revolution, People’s Action, People Demanding Action, Progressive Campaign Change Committee, Progressive Democrats of America, Public Citizen, Service Employees International Union, Social Security Works, Student Global AIDS Campaign, Sunrise Movement, Ultraviolet Action, United Electrical Radio and Machine Workers, United Mine Workers of America, Utility Workers Union of America, Women’s March, Inc., Working Hero and Working Families Party.

Of Note: Sen. Sanders' office notes that despite the U.S. spending "far more per capita" on healthcare than any other nation in the world, 34 million Americans still don't have health insurance, thousands of people die annually due to inability to afford medical care, nearly one in three adults with insurance has been unable to afford necessary care, and nearly half of adults fear a health emergency would bankrupt them.

Media:

• Sponsoring Sen. Bernie Sanders (I-VT) Press Release (116th Congress)
• Sponsoring Sen. Bernie Sanders (I-VT) Press Release (115th Congress)
  
• Sponsoring Sen. Bernie Sanders (I-VT) Bill Summary (116th Congress)
• Sponsoring Sen. Bernie Sanders (I-VT) Section-by-Section Summary (116th Congress)
• Sen. Sanders Additional Information
• Jacobin (In Favor)
• Reason (Opposed)
• Former Sen. Heidi Heitkamp (D-ND) Washington Post Op-Ed (Opposed)
• Vox
• CNBC
• Fortune
• Mercatus Center
  
• Roll Call
• Mercatus Center (Additional Context)