…Medical prices are controlled in various ways in the rest of the developed world. In Japan, the land of $100 melons and tiny $10,000 per month apartments, all medical care prices are listed in a book, thicker than the Manhattan telephone directory. The prices set in the book are usually less than a third of those in the USA. An MRI that costs $1,200 in the USA costs $88 in Japan. Japanese insurance companies are private as are most doctors. Japan spends less than a third per capita on medical care than America. However, the Japanese are greater consumers of medical care than Americans. They visit doctors and hospitals more often, have much more diagnostic tests such as MRIs. They also have better health outcomes as measured by all metrics such as life expectancy. They also wait less for treatment than Americans do as Japanese doctors work much longer hours for their much lower incomes.
Japan’s explicit price controls are roughly emulated in other countries via the use monopsonistic systems. Monopsony, meaning “single buyer” is the flip side of monopoly. A monopolist sets prices above free market equilibrium. A monopsonist sets prices below free market equilibrium. It does not matter if there is an actual single payer or many buyers (or payers) whose prices are set by the government or by insurance companies in collusion with each other…
I cannot see any scenario where current Medicare beneficiaries are not given substantial economic incentives to support the new arrangement. Those are the only ones who have to be given enough if monopsonistic healthcare price control system such as Medicare-for-all has any chance of being enacted. After that, there are various interests that may or may not be given incentives or compensation to go along. Those incentives could be permanent or phased out over time.
There are two major obstacles that must be addressed before any Medicare-for-all legislation could have any chance of being enacted. One is the way it will be financed and two is what would be the status of current Medicare beneficiaries. The latter is the more interesting, in that potentially a powerful group could be switched from extreme opponents of it to allies.
The first reaction from many current Medicare beneficiaries to the idea of Medicare-for-all, might be related to the issue of others getting immediately what they have paid into for many years while they did not get any benefits. At minimum, current Medicare beneficiaries would chafe at the idea of having to pay new taxes to pay for Medicare-for-all, and not getting anything for those taxes, other than the Medicare already have now.
The challenge of convincing younger people to pay taxes in return for not having to pay for medical care and/or health insurance premiums either directly or through their employers is surmountable. The USA spends about twice as much per person on health care as other developed countries. However, the prices paid by Americans or their insurance carriers for medical procedures are typically about triple what is paid in other developed countries. Hence, Americans consume less health care services than many of their foreign counterparts. The money saved from a monopsonistic healthcare cost control system like Medicare-for-all, could be allocated among those who now pay for healthcare, leaving almost all better-off, except doctors. Convincing many people of that would not be easy.
The proposed status of current Medicare beneficiaries will be the key factor if a Medicare-for-all type system has a chance of being enacted. To put it bluntly, current Medicare beneficiaries will have to be bought-off. One fair way to garner the support of current Medicare beneficiaries would be to grant them a special deduction that could be applied to their adjusted gross income for Federal income tax purposes. The special deduction could be the total amount paid for Medicare tax by both themselves in all years that they were not receiving Medicare benefits. This would be above $100,000 for a typical couple. It might be capped at some amount so as not to benefit very high earners who may have paid much more in Medicare tax.
This special deduction could be used to reduce taxable adjusted gross income, like the way that IRA contributions do now. It could be applied in whole or in part in any tax year and any unused portion could be carried over. This would cause an increase in the Federal deficit. However, the fiscal impact would diminish over the course of a few years, since there will not be any new individuals who had paid Medicare tax but not obtained Medicare benefits. Thus, it would be essentially a one-time cost. This concept is not unlike the $2 trillion one-time cost that was assumed in the various ideas to privatize Social Security. However, the cost to the treasury would be more like $800 billion.
It would be very easy for current Medicare beneficiaries to estimate how much they would gain from the special deduction. The Social Security website shows the total amount than any individual and their employers have paid in Medicare tax. The 55 million current Medicare beneficiaries are arguably the most powerful voting block in America. There are slightly less than 1 million professionally active physicians in the USA, about half being primary care physicians and the other half specialists. There is a question as to whether the proponents of a Medicare-for-all type system would be savvy enough to make it worthwhile for many of the 55 million current Medicare beneficiaries to mobilize for Medicare-for-all. If they did it would be difficult to block such a movement…"