“Medicare for All” Is Not Free Health Care

Milton Friedman said there’s no such thing as a free lunch. If some people are consuming health care, someone has to pay for it. But that’s not my point here. Many people think that Medicare for All would mean the government would pay for everyone’s health care, so those receiving health care would have no out-of-pocket costs. That’s not how Medicare works.

Bernie Sanders proposes a “Medicare-for-all, single-payer program.” Instead of private insurance, everyone would be insured through the federal government’s Medicare program. But Medicare is not free for those who are in the program. They have to pay for it.

Medicare consists of four parts. Part A is hospital coverage, which the government does pay for. Part B pays for doctor’s fees and outpatient services, Part C consists of Medicare Advantage Plans, and Part D provides prescription drug coverage. Medicare recipients pay premiums for Parts B, C, and D. In addition, because even those four parts don’t pay for everything, many of those on Medicare also pay for Medigap coverage to pay for things Medicare doesn’t cover.

Younger voters who hear the Medicare-for-All slogan will likely think that means that the government will pay for all of their medical care, but Medicare is not free for those who are on it. They pay premiums just like people with private insurance, but they pay them to the government.

Medicare for All means government will take over the insurance functions currently run by private insurers, but as seniors can tell you, people on Medicare still have to pay for their health insurance. They just pay the government instead of a private insurer.

Randall G. Holcombe is a Research Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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