The drumbeat continues for “single-payer” health insurance, or “Medicare for All.” How many proponents have first-hand experience with Medicare? How many opponents, for that matter? Economic principles are essential to any rational evaluation of these proposals, but on-the-ground experience helps, too. The following is a short story showing what it’s like to be a Medicare enrollee.

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A bit of background first. Most people find basic Medicare inadequate and opt for supplemental insurance. I get mine from an outfit called Anthem Blue Cross. Prescription drug coverage is another option. These coverages are not cheap even though premium revenue falls well short of costs. (Thanks, taxpayers!)

Another bit of background: the Congressional Research Service says the Hospital Insurance Trust Fund (part of Medicare) will become insolvent in 2026, though it will doubtless be patched up before then. Social Security is headed for a cliff, too.

The statements I get from Blue Cross are in some ways incomprehensible, but they are informative nonetheless.

Also, as a well-informed reader of FEE publications, you probably know that the “trust funds” that supposedly back these government programs are accounting fictions. They consist of Treasury securities—in effect, promises to use money from taxes or new borrowing, not real assets.

Now to my own recent experience. The statements I get from Blue Cross are in some ways incomprehensible, but they are informative nonetheless. I recently visited a dermatologist and paid nothing out of pocket. In the visit, we discussed my progress, and she spent most of 60 seconds spraying liquid nitrogen onto two spots.

Each of those sprays was described as “surgery-skin” on my statement. The total nominal charge for the two sprays was $289.48. Medicare paid $93.61, my supplemental insurance paid $24.11, and the doctor ate the rest. The stated charge for the office visit was $149.56, knocked down to $72.97. Finally, a one penny charge was added for “performance measure,” from which I was luckily excused. (Disclaimer: I am quite happy with this physician, who is just playing the game of inflated charges that all providers must play in order to survive.)

“Medicare for All” means removing almost all the remaining incentives to economize, leaving bureaucratic rationing to handle shortages.

What Did We Learn?

Lesson one: Since my out-of-pocket liability was zero, I had no financial incentive to economize on my use of services. I don’t even view my expenditure of time and trouble as costs as most people would because this physician is located nearby, and I enjoy our friendly and informative chats. “Medicare for All” means removing almost all the remaining incentives to economize, leaving bureaucratic rationing to handle shortages.

Lesson two: Providers post enormous nominal charges for their services knowing they will be knocked down by insurance for almost all patients. This leaves uninsured patients with shocking bills that many simply cannot pay. When medical treatment is proposed, the first question is almost always whether insurance covers it, not whether the treatment is likely to work or have side effects or what alternatives might exist.

(Aside: does everyone need health insurance? In a free health care market devoid of government interference, everybody would seek out the insurance that best fits his or her situation. For many young, healthy people, the optimum would be minimal insurance or no insurance. But when government interference drives up costs, as in my example, insurance becomes paramount.)

All of us, not just seniors, have to wonder when a fiscal crisis will hit Medicare.

Lesson three: In general, we feel good when we exercise our market power as consumers. We like to play off providers against one another, making them compete on price and quality. In health care, increasingly, providers respond to bureaucratic diktats rather than consumer preferences. Patients’ remaining market power would vanish under “Medicare for All.” We would be left to the tender mercies of faceless bureaucrats—infantilized, if you will.

Lesson four: All of us, not just seniors, have to wonder when a fiscal crisis will hit Medicare. Private insurers, who must answer to market forces, worry a lot about maintaining adequate reserves. The looming Medicare and Social Security crises have been widely publicized, even on government websites, yet politicians continue to ignore them. They’re being entirely rational given that the crises probably won’t hit until after their next election.

Medicare has to go. The government must ultimately be gotten out of health care entirely, but getting there from here will not be easy. For now, we should concentrate on heading off “Medicare for All.”