First in a series of articles re: Medicare for All – Boon or Bane

By: Karthik Kandamuri, and Jerry L. Rhoads, CPA and health care expert and consultant

With the kickoff of 2020 presidential elections, healthcare debate started afresh. All the democratic presidential candidates are trying hard to outdo each other to offer “best” healthcare plan, which covers all the uninsured! But none of the candidates seem to have a coherent plan, which meets basic objective of the so called “healthcare is a right”, without bankrupting already “debt ridden” great nation of US of A!

Debunking Medicare for All  (A real political “free for all” problem for the voters to sort out)

While Trump administration defanged the already unpopular Obamacare, by removing the mandatory penalty clause, the plan itself continues to be controversial. It has disrupted the healthcare insurance market, complicating the model even further without any solutions in sight for problems in the industry such as a) year after year increasing premiums, b) the monopoly of insurance exchanges in some states and c) inefficient medical facilities with no clear value proposition, to name a few.  So, what is the solution to this ticking time bomb, with majority of baby boomers already retired and are on Medicare?

If one looks at the healthcare problem holistically, the problem seems to be much bigger than just covering the uninsured. Healthcare needs to be broken down further into medical care and social responsibilities. All the plans whether they are Obamacare, or any others need to address the cost, price and quality of medical care currently received by Americans. Since America has been rated worldwide as number one in per capita costs and thirty-eight in quality, this debate needs to be elevated to a higher level and we reserve that debate for another day!

Surprisingly the plans proposed by the presidential candidates fall flat, when one does a “like-to-like” comparison with current plans. For instance, how does the program support a) employer sponsored plans with high deductibles and for people who are under 65 years of age, b) how do laid off workers get into and out of the program depending on their employment situation? c) how does it support people in small businesses, d) does the plan support choices of doctor, specialist, hospitals? e) what is the maximums for individual and family co-insurance, f) does it cover vision and dental health, g) what about immunizations and h) finally how much will be out-of-pocket premiums for comprehensive vs. limited coverage  etc. and many other such questions. Most important question is, how will it get funded and how will providers get paid? Out-of-pocket expenses and quality outcomes for consumers always depend on how the providers are paid for specific episodic care.

There are lot of other questions which crop up such as a) How does this plan address insurance for groups such as veterans, illegal immigrants and others? What happens to the Medicaid program? What happens to employer sponsored plans? How does this impact the larger US economy and unrecorded debt for government pensions and an entitlement standpoint?

Every debate of Democratic presidential candidates introduces a new element of confusion to the proposal, as each candidate tries to sell their own plan as the best solution to all the ills of current healthcare models. But none of the plans provide details on addressing systemic weaknesses which result in higher hospital, drug, short-term and long-term costs bankrupting the system. I recently met an older couple in an international flight, who were coming back from another country they visited, to get procedure done. They paid a fraction of out-of-pocket expenses they would have paid in USA for the entire procedure and post-procedure care. Why do medical care and pharmaceutical costs exceed those in other countries? Some countries, such as India and Mexico, are marketing “medical tourism” to Americans, a code word for cheaper medical procedures, performed by equally qualified and competent medical professionals.

For example: the small country of Singapore is rated number one in quality of care and last in cost per capita.  Their health care program is a collaboration of government funding and private enterprise focused on attaining efficiency in the delivery of services by tracking costs per case and episode that improves the quality while containing costs and pricing for aging patients.

So, what is the way forward to this mess? Any discussion on health care should not only address the coverage but also address value vs. cost of medical care. Our policy planners can learn a lot about medical costs in other countries with comparable delivery systems for the patients. Failure to address healthcare in a holistic manner will just be “noise” as opposed to efficient and sustainable healthcare for Americans.

Stay tuned and watch this space for the republican proposals for addressing this number one problem in American politics and lifestyle!!  None of which have dealt with how we will pay the providers and afford escalating costs due to the 77 million baby boomers reaching the age of health decline. That is the number two most pressing problem that is not in any proposal to date.