By Jay Eisenstock, Founder, JE Consulting
LinkedIn: Jay Eisenstock
“Medicare for All” is a compelling slogan, but it obscures an important question: What exactly do we mean by Medicare for All? Before replacing the existing system with a single government payer, we should consider whether an enhanced Medicare Advantage model could achieve universal coverage while preserving competition, consumer choice, and private-sector cost management.
Traditional Medicare vs. Medicare Advantage
Traditional Medicare covers hospital and outpatient services, but beneficiaries still face premiums and cost-sharing. Prescription drugs generally require a separate Part D plan, while Medigap and other coverage can fill gaps.
Medicare Advantage (MA) often combines medical and drug coverage with supplemental benefits and low or even zero-dollar plan premiums. Yet restricted networks and prior authorization can become consequential for people with serious or complex conditions. MA covered 55% of eligible beneficiaries in 2026, but its appeal does not necessarily translate into savings for taxpayers: KFF estimates federal payments exceed comparable traditional Medicare spending by 14% per person, or about $76 billion.
The Underlying Cost of Healthcare
Whether universal coverage is achieved through a single-payer system or expanded managed competition, the fundamental challenge remains: Changing who pays the bill does not change the cost of what is being purchased.
As I wrote in my article The Cost of Healthcare, current costs are unsustainable, with many factors affecting the cost of healthcare, including sector-wide wage increases, an aging population, rising pharmaceutical costs, and soaring hospital expenses. Hospital care remains the largest spending category, accounting for $1.63 trillion of the $5.28 trillion spent on U.S. healthcare in 2024.
Single Payer
For some advocates, “Medicare for All” means a single payer (i.e., the government), with administrative savings and fraud reduction helping pay for expanded coverage. Traditional Medicare’s overhead is often cited at about 2% of spending versus 12–14% for private insurers. But Medicare’s older, higher-cost population makes overhead look smaller as a percentage, and some administrative functions are performed elsewhere in government. What matters is administrative expense across providers, employers, insurers, and the government.
The Congressional Budget Office’s 2020 analysis identifies savings from standardized insurance rules. However, documentation, coding, compliance, claims processing, and utilization oversight would remain. Prior authorization illustrates the tradeoff: it adds administrative cost but can reduce unnecessary medical spending. Improper payments are not necessarily fraud; Malcolm Sparrow’s research suggests similar fraud rates across public and private payers. Government would still have to detect inappropriate billing and verify medical necessity.
Often missing from the case for single payer is the scale of restructuring required. In This Is the Biggest Culprit for High Health Care Spending, Zack Cooper explains how hospital consolidation raises prices. Substantially lower provider payments could reduce national spending, but hospitals would face hard choices about staffing, investment, services, and even closure.
Proponents also point to single-payer systems in other countries. Yet international experience demonstrates that administrative simplicity does not eliminate scarcity. In his article How Britain Became as Poor as Mississippi, Idrees Kahloon discusses problems confronting Britain’s National Health Service, including roughly 6 million people waiting for treatment, repeated physician strikes, inadequate capital investment, and severe maternity-liability costs.
These outcomes are not inevitable under single payer but show that simpler insurance cannot create clinical capacity: when demand exceeds supply, access is constrained by price, networks, utilization management, or waiting time.
A Better Path Forward
“Medicare for All” is not the panacea its advocates suggest. We can achieve universal coverage without replacing the entire insurance system with a single government payer. A better approach would build on Medicare Advantage: guarantee coverage for everyone while preserving managed competition, consumer choice, and the private-sector infrastructure that already finances and delivers much of today’s healthcare.
That does not mean simply expanding Medicare Advantage as it exists today. The program has real flaws that must be fixed. Risk adjustment can reward aggressive diagnosis coding, prior-authorization requirements can become excessive, provider networks can restrict access, and some health plans have benefited from overly generous government payments.
An enhanced model should retain multiple competing payers while forcing genuine administrative interoperability and automation. It must go much further than simply imposing national standards for electronic transactions. We have been pursuing “administrative simplification” for decades. HIPAA established national transaction standards more than a quarter-century ago. Yet an enormous amount of healthcare business is still conducted through fax, paper, payer portals, phone calls, and manual intervention.
We standardized the transactions. We never standardized the process.
A redesigned model should demand automation. Prior-authorization requirements should be discoverable before a service is ordered; routine requests should be adjudicated automatically, with supporting documentation exchanged electronically. Provider information should be maintained once and shared across plans.
More important, the rules behind those workflows matter as much as the transactions. If every payer has different data requirements, medical policies, submission procedures, and exceptions, technical compliance simply moves complexity from paper into software.
Administrative cost should not be minimized in isolation; total healthcare cost should be optimized. Spending a dollar on utilization management that prevents several dollars of unnecessary medical spending is not administrative waste. Conversely, administrative activity that merely moves information between incompatible systems adds cost without adding value.
Universal coverage and single payer are not synonymous. We should take what works in Medicare Advantage, fix what does not, eliminate unnecessary administrative variation, automate the processes HIPAA never succeeded in automating, and guarantee coverage to everyone.
The name matters less than the architecture: universal coverage without a government insurance monopoly; national standards without eliminating competition; and aggressive cost management without dismantling the private healthcare infrastructure on which most Americans already depend. The objective should be universal coverage within a system that still has incentives to manage cost, compete for consumers, innovate, and improve care—not simply a system that changes who writes the check.