Why we can’t have “Medicare for All”

“Medicare for All” is a popular idea in American politics. The pitch is simple: take a program that already exists-Medicare-and expand it to cover everyone. But there’s a problem. The current Medicare program is extremely expensive and not designed to control costs. If we want universal healthcare, we will surely have to imitate what every other country with such systems does, which is ration care.

Let’s break this down. In 2024, Medicare spending exceeded $800 billion, and that’s just for a subset of the US population. If we scaled that system up to cover every American, the cost would skyrocket-unless we made some major changes.

Why is Medicare so expensive? In short: very little rationing. Medicare generally lets doctors and patients decide what tests and procedures to do. It doesn’t negotiate aggressively on prices with hospitals and drug companies. And it often pays for treatments even when the expected benefit is small.

Compare that to many European healthcare systems. Countries like the UK, France, and Germany spend far less per person on healthcare, yet manage to cover everyone. How? Through cost controls and rationing. That can mean negotiated prices for drugs and procedures, global budgets for hospitals, waiting lists for non-urgent surgeries, and even explicit limits on whether certain expensive treatments are covered.

In these systems, not every new drug or device is automatically covered, and access to specialists can take time. That’s the tradeoff: lower costs, but less individual choice.

So when people say “Medicare for All,” what they often mean is “universal coverage, no out-of-pocket costs, and no waiting.” But the actual Medicare system isn’t built to do that at scale — at least not affordably.

If anything, a more realistic model might be “Medicaid for All.” Medicaid already covers over 70 million lower-income Americans. And to keep costs down, it reimburses providers at lower rates, and it uses more managed care and oversight. It’s not perfect, and access can vary by state, but from a budget standpoint, Medicaid is much more affordable per enrollee than Medicare-and closer in spirit to how European systems operate.

In the end, the choice we face is this. Do we want a system where consumers and doctors can mostly do whatever they want, whenever they want, regardless of cost? Or do we want healthcare to be accessible to everyone-even if that means more rules, oversight, and cost controls?

You can have universal coverage. You can have unlimited choice. You just probably can’t have both-at least not at a price taxpayers are willing to pay.

Originally published at https://mytwocentsandcounting.substack.com.