Medicare For All - is it really a good idea?

We keep hearing about the above topic, mainly because the democratic debate just happened and the ongoing "selection" process of choosing our Presidential candidates continues to raise the issue.

I'm a math guy and I wanted to see how the math would look for something like #MedicareForAll. Most people do not realize there is a premium associated with #Medicare Part A. It is completely "waived" if you worked 40 quarters and are a citizen of the United States. If you worked fewer than 40 quarters, you pay some or all of the Medicare Part A premium. For my purpose, we assume the full Medicare Part A premium is the cost associated with services provided under Medicare Part A, which may be a stretch. Let us also assume the Income Related Monthly Adjustment Amount (#IRMAA) added to the premiums of high earners for Parts B and D are not indicative of utilization or costs associated with those Medicare coverages, i.e., they are just an added cost / tax to high earners, and exclude them. One last assumption; we will use a moderately priced Part D (Rx) plan and estimate the consumer only incurrs claims up to, and not beyond, the deductible.

2019

Part A Premium / Deductible - $437.00 / $1,364

Part B Premium / Deductible - $135.50 / $185

Part D Premium / Deductible - $17.00 / $435

2019 Annual premiums are $7,074 for a plan that has a $1,960 deductible (higher than the minimum deductible required for a Health Savings Account (#HSA) compatible plan) with 20% coinsurance after the Part B deductible. Additionally, Skilled Nursing Facilities, which are typically covered by Employer based plans, are limited to 120 days, the first 20 of which are paid in full and the next 100 of which require a $170.50 per DAY payment from the "insured". After 120 days in a Skilled Nursing Facility, the Medicare enrollee is responsible for all costs associated with the SNF stay. Therefore, if someone were to be admitted to a SNF, they would pay another $17,050 for a SNF visit lasting 120 days. Any days beyond that are not covered.

Under Medicare, Hospitalization services are subject to the $1,364 Part A deductible, then are charged $341 per DAY for days 61 - 90. Days 91 - 365 are charged $682 per DAY. Please note, these are lifetime days, not consecutive or for the same illness. After 365 lifetime days, Medicare pays nothing and the Medicare participant is responsible for all charges. Most employer plans have unlimited hospitalization coverage subject to a singular annual deductible or copay.

Assuming you only pay the premiums and just hit the Part A, B and D deductibles for services, the total cost of the plan is $9,034 per year for a single person, or about $753 per month. In NYC, that may not be considered a large amount for full coverage, but in New Orleans, LA, Biloxi, MI, etc., they likely consider that a bit high. And should you be unfortunate and incur expenses past your deductible, there is no maximum out of pocket limit as there is with Employer plans. A singular 90 day hospital stay could cost an additional $10,000 in out of pocket costs.

Even if you believe those figures are not exorbitant, that amount is for every person in the United States, not just those that are currently enrolled. There is likely an assumption of utilization for 65 - 90 year olds in those figures, but the cumulative cost of care for those aged 0 - 64 is not likely to be much less (not too many 66 year olds having multiple births) than those 65+, especially if you do not attach a premium to it and allow consumers to make choices that fit their lifestyle and needs.

Let's get the conversation started!