Brainwrap has written an article discussing the notion that MFA would eliminate insurance, and apparently, Bernie Sanders has said something to that effect. That may not be the whole story. First, read Brainwrap’s piece. This is not a critique of the article, rather an addition. It turns out that Medicare does not exist in an insurance vacuum.
A fundamental aspect of Medicare is MS or Medicare Supplemental insurance. I do not understand, I’ve simply not read, what is being proposed in MFA, but Medicare doesn’t cover everything, period. Like many insurance plans, it has a deductible. There are standard MS plans that cover that deductible in various ways. There is also a MS plan for prescriptions. These plans are mandated by the government but are run by and for the profit of private insurance companies. They are low margin, but also, low risk, and some companies make very good money selling what I call the widget version of insurance.
There is also a fully private version of MS called Medicare Advantage. Funny enough, MA is not nearly as cost effective as MS and has other problems. It’s almost like the government does some things better than capitalism does. Who knew?
Why go down this path if I don’t really know that the MFA proposals are eliminating MS? Well, one transition plan would be to essentially leave Medicare as it is, with deductibles, and allow private insurance to continue to sell MS plans, only in an expanded role to cover the new folks coming under the MFA policies. This is what Canada does, or at least the course work I took in insurance twenty years ago said that is what they do. And yes, the Canadian system works quite well. Actually, our MS system works exceedingly well, much better than any private plan out there. I know, you’re shocked.
The other thing to remember is that insurance companies don't work in a major medical bubble. That is, few companies only sell major medical policies. They sell annuities, life, MS, and various expanded versions of disability insurance. If you think what I'm telling you is that going to MFA won't eliminate insurance companies, well yeah, it just means they will have to switch to other products, many of which they already sell.
Furthermore, the notion that all those folks in those companies will be out of jobs, not really, Those folks would presumably still be required to handle claims, handle questions for policyholders, and do the same things they currently do, just not for a private company. Indeed, since the plans and programs, forms and documents, would all be the same (government mandated), their jobs would be easier, and the process of getting insurance, and claims paid, would all become easier. And for those that just cringed at the notion of government mandated forms and structures, really? Think about the notion that every company gets to develop their own insurance and claims forms. Think about the nightmare for you and for hospitals in dealing with that. Most folks and places like the uniformity of the government mandated HCF and UB forms.
Yes, the government does do some things very well, no matter what private companies tell you.