Here’s How Medicare for All Could Affect Americans

Here’s How Medicare for All Could Affect Americans

by | Accounting News, Healthcare, News

According to CNBC, 70% of Americans support Medicare for all, but the term is still murky for Americans. What does it actually mean and how could it affect Americans?

Implemented in its most historical meaning, Medicare-for-all would completely wipe out private coverage and replace it with a single-payer health insurance – a national government-run program that would cover every American. Under such a plan, deductibles, premiums, and co-payments would likely be things of the past. The government would deal directly with drug makers, which would lower prescription costs and streamline the administration process. Reuters defines it as “a publicly financed, privately delivered system with all Americans enrolled and all medically necessary services covered.”

How Much Would it Cost?

A study recently released by the Mercatus Center at George Mason University found that Sen. Bernie Sanders’ plan for universal healthcare, which is the highest-profile plan for Medicare-for-all, would increase government healthcare spending by $32.6 trillion during its first 10 years.

What Opponents Say

Supporters of Medicare-for-all are typically quick to point to Canada, which has successfully implemented a single-payer system, though Canadian citizens pay more in taxes than American citizens. Opponents argue that even as taxes and federal costs for health care rise, expenses for individuals and companies would drop, potentially canceling each other out. They’re also likely to refer to the Mercatus study for a different reason: the report suggests that national health expenditures – which include all national health spending (i.e. state Medicaid programs and private employees), not just government spending – could decline by $2 trillion over the first 10 years of implementation, though the author of the study admits that this is an unreliable number because it depends on too many variables.

What Critics Say

In 2016, the Urban Institute, a nonprofit research organization, came up with roughly the same number as the Mercatus study: $32.6 trillion over a 10-year period. Assuming both studies are correct, this would create an overwhelming financial burden on the federal government, requiring unprecedented tax hikes. Critics are also quick to liken Medicare-for-all to Medicaid rather than Medicare, claiming that if America is forced into a one-size-fits-all government program, patients will likely face long lines and delays in treatment. Moreover, the Mercatus study found that virtually any savings accrued from a single-payer plan would vanish if doctors and hospitals, who would be paid at least 10% less, wouldn’t agree to accept lower fees for patients who are now privately insured.

Healthcare reform is complicated, and the associated costs of Medicare for all have proven to be a stumbling block. Though Sanders’ plan is the most popular among Medicare-for-all advocates, he has yet to release a financing plan, so the potential impact on Americans and the healthcare industry as a whole is still uncertain.

Trumpcare: What It Repeals, Replaces And Keeps The Same

by | Accounting News, Healthcare, IRS, News

On the mind of many Americans in recent months is how our new President will alter the healthcare system. His promise throughout the campaign was that Obamacare would be “repealed and replaced” as quickly as possible. However, we all know the feeling when our time frame for getting things done doesn’t always work out, or how we envisioned a project would turn out isn’t often the final product either. Just last week, the House passed an initial bill that reconfigures the healthcare system as it is today; however, it still has to pass the Senate, and will likely go through many changes and amendments before being finally accepted into law. Although Trumpcare may not look exactly how President Trump imagined, nor has it “repealed and replaced” Obamacare as rapidly as he may have originally hoped, here are some key differences between his plan and our current system.

  1. Immediate repeal of the 3.8% net investment income tax, which taxes income from royalties, interest, rents, dividends, passive activities and gains for those with a gross income over $200,000. 
  2. Immediate repeal of the individual mandate excise tax, or the tax owed if you did not have health insurance. 
  3. Health savings account withdrawal penalties would drop from the 20% under Obamacare to what it was before, 10%. This penalty only occurs if you withdraw money from an HSA before 65 for non-medical expenses. 
  4. Removal of the $2,500 cap on the amount of pre-tax funds allowed to be placed in a healthcare flexible spending account. Decisions to impose a cap or not would be left up to employers. 
  5. Those with FSA’s or HSA’s would also be allowed again to utilize those pre-tax funds on over-the-counter meds. 
  6. Lowers the rate for medical itemized deductions. If you were under 65, Obamacare only allowed deductions for medical expenses that exceeded 10% of your adjusted gross income, whereas Trumpcare would take it back down to the previous 7.5% of your adjusted gross income. 
  7. While Trumpcare would eventually repeal the 0.9% additional Medicare surtax on those with gross incomes over $200,000, it would not do so until 2023, which is later than the first healthcare bill the House introduced.  

For the time being, these are the tax adjustments in place, although these could presumably change once the bill works its way through the Senate. This version of Trumpcare certainly differs from the House’s first proposal, but Americans may see many months pass and many modifications occur before the healthcare system truly moves away from Obamacare.

If you have any questions, please feel free to contact me at [email protected].

Take a look at my article on a similar topic: “The New GOP Healthcare Plan and What That Means for You”.