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What are the major differences between Medicare for all and a public option?

Written by Diane Archer

The latest Kaiser Family Foundation health tracking poll reveals substantial public confusion about various health reform proposals. Americans do not understand major differences between Medicare for all and a public option. Here’s a cheat sheet.

Would both Medicare for All and a public option cover all Americans? Would they both require people to pay monthly premiums? No. Medicare for All is designed to guarantee all Americans health care coverage automatically. It would be paid for much like Social Security, public schools, and police departments. Medicare for All does not require people to pay monthly premiums.

Rather, with Medicare for All, premium contributions that once went to private health insurers would go to the government in the form of taxes, based largely on income. Everyone would be covered by single-payer, public health insurance. Instead of paying private premiums, you would pay an income-based tax, effectively a public premium. Yet, 44 percent of people surveyed did not understand that they would not need to pay monthly health insurance premiums with Medicare for All.

In stark contrast, a public option, which could be designed in a variety of ways, would likely work more like private health insurance today, requiring you to pay a monthly premium. Still, 50 percent of people surveyed did not understand that they would have to pay a monthly premium for their coverage. Moreover, 53 percent of people surveyed thought the public option would cover everyone, which is not at all clear.

A public option would not likely guarantee coverage to all Americans, unless the federal government increased taxes enormously to pay for it. And, no one is proposing a sizable tax increase to cover the cost of the public option; rather, proponents, like Pete Buttigieg, are saying that a public option would not raise taxes significantly. Consequently, people could opt not to pay their premiums. And, it’s more than likely many people would not be able to afford their premiums, since the public option would not rein in health care costs substantially.

Would both Medicare for All and a public option require people to pay deductibles and copays? No. Medicare for All eliminates deductibles and copays. But, more than six in ten Americans don’t understand that people would not pay deductibles or copays with Medicare for All. And, more than three in ten Americans do not understand that people would continue to pay deductibles and copays with a public option, as the do today.

How about unrestricted access to doctors and hospitals?  With Medicare for All, you can use whichever doctors and hospitals you would like. But, a public option builds on our current system and likely would allow provider networks, restricting access to doctors and hospitals.

What about costs? Only Medicare for All reins in health care costs substantially. It is estimated to save middle-income households 9.6 percent of their annual income. Medicare for All creates significant savings because it eliminates private health insurers and, with that, about $600 billion a year in administrative costs. It also cuts prescription drug costs in half. A public option could not save much money. It would cut prescription drug costs, but it keeps all the administrative waste in our health care system.

And, what happens to private health insurance? With Medicare for All, your primary insurance is public insurance; you could not keep your private health insurance. Still, almost half of Americans do not understand that Medicare for All would not allow them to keep their current health insurance; that’s key to bringing down costs. About 40 percent believe that a public option would not allow them to keep their current health insurance either, though it would.

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