Medicare for All vs. The Public Option: How Do They Compare?

What is Medicare for All?

Medicare for All is a proposed government-funded national health insurance program that would provide comprehensive medical coverage to all United States residents. The initial proposal was introduced in 2003 with the aim of expanding the current Medicare program, which covers people ages 65 and older and those younger than 65 with specific medical conditions.

Medicare currently consists of:

• Original Medicare:
  • Part A: Part A covers inpatient hospital care, home healthcare, skilled nursing facility care, and hospice care.
  • Part B: Part B covers outpatient medical services related to preventive care, diagnostic testing, and the treatment of health conditions.
• Medicare Advantage: Sometimes called Part C, Medicare Advantage plans combine the benefits of Original Medicare. They also typically include additional coverage, such as prescription drugs, dental, vision, and hearing.
• Medicare Part D prescription drug plans: Part D covers take-home prescription medications and certain vaccinations not covered under Part B.
• Medicare supplement insurance (Medigap) plans: Medigap plans help cover the out-of-pocket costs associated with Original Medicare, such as copayments and coinsurance.

The initial proposal states that Medicare for All would include items and services such as:

• inpatient care
• outpatient services
• durable medical equipment
• prescription medications
• mental health services
• long-term care

With Medicare for All, how we pay for healthcare in the United States would differ from the current system. There would be no upfront costs or cost-sharing when you need medical services. Instead, the entire system would be funded through taxes.

When eliminating cost-sharing, the single-payer system would eliminate private insurance plans such as Medicare Advantage, Part D prescription drug plans, and Medigap. However, the out-of-pocket costs associated with those types of plans would also be gone, including:

• deductibles
• premiums
• coinsurance
• copayments

In 2023, Senator Bernie Sanders filed S.1655 – Medicare for All Act for a single-payer health system that aims to:

• establish a health plan providing comprehensive healthcare to all United States residents, from birth or residency
• include inpatient and outpatient hospital services, emergency services, prescription drug coverage, maternity and newborn care, and long-term care
• remove out-of-pocket expenses, like monthly premiums, copayments, or deductibles, though there would likely be some cost-sharing for prescription medications, unless families earn below a certain income level
• expand current Medicare coverage to include dental, hearing, and vision care

Representative Pramila Jayapal also filed H.R.3421 – Medicare for All Act in 2023. The plan aims to:

• eliminate out-of-pocket costs, like deductibles and coinsurance
• create a national health insurance program that covers all United States residents
• provide coverage for inpatient and outpatient medical services, prescription drugs, mental health care, dental, vision, and long-term care

What is a public option?

A public option is a government-funded or state-funded health insurance program available on the health insurance marketplace as an alternative to a private plan. Unlike Medicare for All, enrolling in a public option would be entirely optional.

The public option program would offer essential health benefits, which include:

• inpatient and outpatient hospital care
• mental health
• substance misuse care
• newborn and pediatric care
• prenatal and maternity care
• prescription drugs
• preventive and diagnostic care and treatment
• rehabilitation services

With a public option, you can choose to forego private insurance in favor of the government-funded or state-funded option. However, you would not need to enroll in the public option if you preferred a private plan. The public option program could be tax-financed, like Medicare for All, or paid for by participants with a traditional pricing structure.

While Medicare for All would overhaul the current Medicare structure, a public option might affect Medicare differently. For example, a public option change to Medicare could include:

• lowering the Medicare enrollment eligibility age
• expanding the eligibility requirements to include people with limited income and resources
• changing the Medicare plan options on the health insurance marketplace
• offering Medicare as a fallback option if other plans are too expensive

Public option healthcare aims to create more affordable health insurance for those who cannot afford private insurance. It would also offer coverage to people who do not usually qualify for private plans, such as individuals with preexisting health conditions.

What are the similarities and differences between Medicare for All and the public option?

Let’s discuss some of the similarities and differences between the two options.

Similarities

The goals of Medicare for All and a public option are to provide people with low cost, affordable health insurance options. Both health insurance systems would be nonprofit, aiming to lower beneficiary, administrative, and prescription drug costs.

Each option would include individuals who may otherwise be unable to receive health insurance through private entities. Both insurance options cover individuals with low incomes and preexisting health conditions.

Differences

Under Medicare for All, there would be only one health insurance option available. Everyone would be eligible and covered for essential health benefits. Private insurance options may be available to those who choose to have them, but they would not be the first place to turn for healthcare. The goal would be to lower healthcare costs and eliminate upfront service fees. This option would be entirely tax-funded and run by the government.

The public option program would be an opt-in health insurance option rather than a mandatory option for all United States residents. Private health insurance options would still exist, but this scheme would aim to lower overall health insurance costs. This program could be funded through taxes, like a single-payer tax-funded system, or through the cost of individual enrollment.

Comparing coverage of Medicare for All vs. the public option

Given the similarities and differences between the two health insurance proposals, you may wonder how each option will affect your medical and financial situation. Below is a comparison chart of the primary coverage and costs for Medicare for All and the public option.

Medicare for All coverage vs. a public option coverage

The biggest difference between the two proposals is the enrollment option: Medicare for All is a mandatory single-payer healthcare system that covers all United States residents, while the public option offers an optional healthcare plan to all of those who qualify and want to opt in.

The takeaway

Discussions about health insurance are at the forefront of the current political and social climate. Regardless of the political spectrum United States residents fall on, many individuals still want more affordable health insurance options.

However, that doesn’t necessarily mean everyone favors a single-payer healthcare system like Medicare for All. There also hasn’t been much talk about the public option program, which could serve as a middle ground between the two sides of the debate.

It’s hard to say exactly how proposals like Medicare for All and the public option fit into the future of American healthcare, but these ideas will continue to evolve as healthcare remains an important topic.