The U.S. does not have a “free market” health care system. 90 percent of Americans have health insurance, nearly all of whom have their coverage heavily subsidized by the government. Part of the misconception stems from the fact that 159 million Americans receive health insurance through their employers. Private coverage is not the same thing as market-based coverage. Thanks to long-standing distortions in the tax code, few workers have the opportunity to choose their own coverage in a transparent market where prices and benefits are easy to understand. Ultimately, the most important way to make employer-sponsored coverage more affordable is to evolve away from the group model and toward a system of consumer-driven, individually purchased health insurance.
For years, Sen. Bernie Sanders (I-VT) has campaigned for what he calls “Medicare for All”—a proposal that would abolish private insurers and replace them with a “federally administered single-payer health care program” that would cover all forms of health care with “no more copays, no more deductibles,” and no premiums aside from substantially higher taxes. The irony of the proposal is that it looks nothing like the actual Medicare program that seniors use today. Indeed, the part of Medicare that is working best is Medicare Advantage, which deploys private insurers to provide high-quality, low-cost coverage to seniors. The best way to reform Medicare is to enact reforms that will further improve the quality and affordability of Medicare Advantage plans, and to learn from Medicare Advantage to improve the coverage that younger Americans can obtain.