Medicare for All vs Single Payer: Do You Know the Difference?

Alicia Gallegos

May 18, 2020

Ashwin Vasan, MD, PhD, was discussing a patient's case with a resident when a question arose about the patient's health insurance.

Vasan, a primary care internist at Columbia University Irving Medical Center in New York, said that if the country had single payer health insurance, choosing a covered medication would be less of an issue. The resident supported the idea of single payer, but expressed dislike for Medicare for All.

"He wasn't able to square the idea that Medicare for All is a type of federal single payer program," Vasan said. "It shows how strong the political identity of Medicare for All is in influencing how people think of the actual policy itself."  

That sparked a discussion similar to debates throughout America prior to COVID-19: What really would either Medicare for All, or single payer, be like?

While this conversation has taken a back seat to a global pandemic, there is still concern about the future of the nation's health system as we approach the presidential election. Many people consider Medicare for All and single payer synonymous; others say they have important differences.

These two terms are often conflated. Some, like Sen. Bernie Sanders (I-Vt.), refer to Medicare for All as single payer and vice versa, while others see them as similar but different.

"Everyone has a slightly different perception of the terms," said Gerard Anderson, PhD, a professor of health policy and management at the Johns Hopkins University Bloomberg School Public Health in Baltimore, Maryland. "Neither term is well defined and both may be whatever the user wants them to be."

Can We Pin Down an Exact Definition?

Calling the idea either single payer or Medicare for All does matter. A 2016 tracking poll by the Kaiser Family Foundation found that 53% of Democrats were "very positive" about Medicare for All, compared with 21% of Democrats who felt "very positive" about a "single payer national healthcare system." Of Democrats, 44% felt "very positive" about "guaranteed universal health coverage," while 21% felt "very positive" about "socialized medicine," according to the poll.

Some consider single payer and Medicare for All the same, but policy experts point out that traditional Medicare has more than one payer. Physicians and clinicians bill private insurers for Medicare Advantage patients for example, and payments for the same medical service may vary. Private plans also manage Medicare drug coverage.

"While the current Medicare program is not a single payer system, given the complex role of Medicare Advantage plans, supplemental medical plans and Part D plans, the Sanders proposal [discussed later in this article] would be, and the single payer would be the government," says Amy Davidoff, PhD, a senior research scientist in public health at the Yale School of Public Health in New Haven, Connecticut.

A single payer model, in general, refers to a lone health insurance plan that covers all patients. "Single payer simply means one insurer, but not necessarily the Medicare program," Anderson said.

Two proposals currently on the table, one from Sanders and another introduced in the House by Rep. Pramila Jayapal (D-Wash.), are pure, 100% single payer, meaning no private third parties like Medicare Advantage, no supplemental insurance, and no variance of fees, said Margalit Gur-Arie, MSc, a health technology specialist and cofounder of BizMed, a company that offers software support services to physicians.

Rather than "single payer," a better term for the approach would be "single collector," said Gur-Arie.

"People who say that single payer is the umbrella term really mean 'single collector' of funds via taxation. And yes, there can be various models of payment disbursements under that umbrella," she said.

"Medicare for All is just a slogan because it has little to do with the definition of Medicare, other than being a universal entitlement," said Gur-Arie. "The proposals just mean one federal healthcare plan, with one fee schedule, that covers everything, enrolls everybody, pays the bills for everybody, and is paid for by federal tax revenues." 

According to Physicians for a National Health Program, single payer national health insurance is a system in which a single public or quasi-public agency organizes healthcare financing, but the delivery of care remains largely in private hands. Canada, Denmark, Norway, Australia, Taiwan, and Sweden are examples of countries with single payer systems.

Although such countries have publicly-funded benefits that cover physician visits, diagnostics, inpatient care, and inpatient medication, the coverage for mental health treatment, outpatient drugs, and the scope of cost-sharing varies, according to a 2019 brief analyzing universal coverage systems by the Commonwealth Fund.

Who Is Talking About What?

Sen. Sanders describes his healthcare proposal as a "Medicare for All single payer national health insurance program" that would modify current Medicare to eliminate the role of private networks and expand the revised program to Americans of all ages. The proposal would broaden Medicare coverage to include dental, hearing, vision, mental health treatment, and long-term care for people with disabilities, among other services, according to a summary on Sanders' website. The proposal is outlined in a Senate bill introduced by Sanders.

His plan promises to lower drug costs through negotiation with big drug companies and by allowing patients, pharmacists and wholesalers to buy lower-cost medications from Canada and other industrialized countries.

Jayapal's proposal similarly would create a universal Medicare program run by the government that covers all citizens. Jayapal's plan would bar private plans from competing with the universal plan and sunset Medicaid and current Medicare.

The Jayapal plan differs in some ways from Sanders' plan. For instance, Jayapal's bill includes a shorter transition to the new program — 2 years compared to Sanders' 4 years. The Jayapal proposal would also cover long-term care for nursing services.

Adam Gaffney, MD, MPH, president for Physicians for a National Health Program, says he feels that single payer and Medicare for All are interchangeable. As the idea has evolved, Medicare for All has become synonymous with single payer, said Gaffney, a pulmonary specialist at Cambridge Health Alliance/Harvard Medical School.

"It really makes sense to use the terms to describe the same thing," Gaffney said. "In the American context of 2020, when we talk about single payer, when we talk about Medicare for all, we're talking about the bill that's in the Senate that was introduced by Sen. Sanders, the bill that's in the House that was introduced by Pramila Jayapal. There is no other single payer proposal out there in Congress that anyone is talking about."

What Are the Pros and Cons of Each?

Pros for Medicare for All/Single Payer:

If Medicare for All were enacted, Gaffney says that physicians would have more time for patients and spend less time spent on billing and paperwork

"Effectively, single payer allows physicians to focus on taking care of patients, not on billing and documentation. It could be a winner for patients and physicians both."

Medicare for All could also stabilize the primary care system and attract more physicians to the specialty, according to Columbia University's Vasan. Yes, physician salaries would likely go down overall, Vasan said, but the dramatic salary disparities between primary care doctors and specialists would shrink — which in turn should strengthen the primary care field.

"Physician salaries will start to equalize," he said. "That doesn't mean a surgeon or a cardiologist will make the same as a primary care doctor, but the disparities won't be so great. This should start to reshape the training and workforce choices of our medical students and residents. What we're basically talking about is a fundamental restructuring of incentives in the system."

Vasan and other proponents of Medicare for All point to a recent study in The Lancet showing that Medicare for All would mean $59 billion in savings on hospital care, $23 billion in savings on physician and clinical services, $217 billion in savings on overhead, and $177 billion in savings on prescription drugs.

Cons for Medicare for All/Single Payer:

However, some analysts have criticized The Lancet study. The article's lead author disclosed that she worked as an unpaid advisor for Sanders regarding his Medicare for All Act. Additionally, other studies give different Medicare for All cost predictions. A projection by the Urban Institute, for instance, found Medicare for All would increase federal spending by about $34 trillion over a decade. Another cost analysis by the Mercatus Center of George Mason University estimated the program would cost $33 trillion over 10 years.

Those against Medicare for All/single payer say countries that have implemented similar models have encountered disastrous results, including sicker patients and less access to care.

"I find it incredible that anyone would consider implementing that here, particularly with examples all around us where similar models have failed so miserably," said G. Keith Smith, MD, an anesthesiologist who practices in Oklahoma City.

Smith, who is medical director and CEO of Surgery Center of Oklahoma, said Canadian patients were among the first at the door when his facility posted prices for its surgical procedures on its website. Canadian patients who visit the center often describe extreme waiting times for care in their country, Smith said, including a woman who traveled to Oklahoma City for a hysterectomy after tiring of a 3-year waiting line in Canada.

Scott Barbour, MD, an orthopedic surgeon who has worked in various veteran hospitals and now owns Barbour Orthopaedics in the Atlanta area, said, "I've seen what a government-run top down healthcare system looks like," he said. "The administrative side gets bigger and bigger, the costs increase, the bureaucracy grows, and the government uses the only tool they have to control costs, which is to ration care. The more you ration the care, the more you distance the patient from the doctor.

"Government always has a lot of regulations and red tape that make actually seeing and taking care of patients very difficult," Smith said. "If the government is the single payer, they will have a monopoly and they will control how patients are taken care of as well. I don't want to be a puppet in front of a patient. I want to be able to take care of them."

"Healthcare is a huge sector of our economy, the largest economy on earth," BizMed founder Gur-Arie said. "We can't just knock it down and rebuild on a whim, like a bunch of Legos. Not only is this impossible, it is irresponsible and insane to suggest otherwise."

Alicia Gallegos  is a medical journalist who specializes in health law, medicolegal issues, and health policy. 

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