Medicare-for-All partisans want to end private health insurance. But those who have Medicare are flocking to private coverage in droves.

If you ask Medicare for All proponents, single-payer health care that once and for all ends private health insurance is simultaneously a litmus test for a progressive, a moral imperative, and a campaign rallying cry. But if you ask actual Medicare recipients? They appear to love private health insurance.

Some form of private coverage option has existed in Medicare since 1997, which has been known as Medicare Advantage since 2003, but the surge in popularity for it is more recent. In the last 15 years, the portion of Medicare beneficiaries who have chosen to enroll in a private (Advantage) plan has grown from about 5% to almost 40%. As of 2020, more than 24 million Medicare beneficiaries were enrolled in private Medicare coverage.

This would appear not to square with the gospel of the single-payer Medicare for All crowd, that people would flock to a government only plan if only they could get it. Clearly, Medicare recipients have the option - and are defaulted into - traditional, government-payer Medicare, or what is formally known as Original Medicare. And Medicare Advantage is even more popular in large, diverse states like California, Florida, New York, and Texas than it is nationally. 

With nearly half of Medicare recipients now enrolled in a private plan by their choice, it's time to examine and put to bed certain mythologies single-payer partisans appear to take as Biblical when explaining why Medicare for All will have more popular appeal than keeping private insurance options alive.

The first of these arguments is that with a single-payer system, there is no network limitation. One can go to whichever provider they want without being constrained by whether or not those providers are 'in-network.

While technically true, actual Medicare recipients appear not to care, as shown by the near exponential growth of private plans under Medicare. It's important to keep in mind that those who are choosing Medicare Advantage are intentionally choosing a private plan, despite having a default option of a government plan. Inertia in this case would seem to weigh towards the default, traditional Medicare plan, and yet, private plans are gaining rapidly.

Secondly, Medicare for All partisans tout the fact that it doesn't have any premiums. This isn't completely factual, since any single-payer system will still have to be funded by taxes, and Bernie Sanders has openly acknowledged that taxes will go up on most people, reasoning that for the non-rich, the tax increase would be more than offset by his claimed reduction in out-of-pocket expenses, including the elimination of premiums.

Here again, the experience is contrary to what would be imagined if one were to extrapolate this reasoning to the choice between Original Medicare and Medicare Advantage. Medicare Advantage is pretty cheap, and often has no additional premiums above and beyond traditional Medicare. Although Medicare Advantage premiums are fairly low to begin with - the average ranges between $20 and $47 a month depending on the type of plan - and more than 90% of beneficiaries have a choice of a $0 premium plan. Clearly, private insurers are capable of providing plans for the same amount of money as the government.

Third, an often fair criticism of private insurance is that it can tend to cherrypick healthier individuals for their plans, thus keeping their costs artificially low while offloading people with more expensive health care needs onto the public system. It certainly was glaringly the case before the Affordable Care Act, when insurance companies were free to deny coverage to individuals with pre-existing conditions, cancel policies when people needed it most, and enforce annual and lifetime coverage limits.

But while Obamacare outlawed insurance policy discrimination against people with pre-existing conditions and imposed community rating (prohibition on charging a higher premium based on an existing health condition) on the individual non-Medicare market, private Medicare Advantage plans have been bound by these rules for much longer. Medicare Advantage plans cannot deny coverage to anyone who is eligible for Original Medicare.

The data shows that both the number and share of Medicare Advantage enrollees who are people of color, low-income individuals, and people with chronic health conditions are growing rapidly.

Compared to their share in the general Medicare population, only one racial group constitutes a smaller share of the Medicare Advantage population: whites. As of 2019, about 32% of Medicare Advantage recipients were people of color, far outpacing their share of total Medicare beneficiaries, at just 21%.

Between 2013 and 2019, minority enrollment in Medicare Advantage increased by 111%, and Advantage enrollment by people who are eligible for Medicare due to disabilities (rather than age) soared 125%. Advantage enrollees are also more concentrated in urban areas - 83% of Medicare Advantage enrollees live in urban areas but just 74% of all Medicare beneficiaries do - and given both that urban areas are more diverse that there are more choices in urban markets, it would seem to indicate that the more choices people are given, the more likely they are to dump traditional Medicare and go with a private option.

All of this would be for not if the actual satisfaction numbers didn't bear out the popularity of Medicare Advantage. And as is the case, it does. In fact, Medicare Advantage has a higher satisfaction rating than Original Medicare, and obviously, than any non-Medicare plan.

Coverage satisfaction reached an all-time high of 98% in 2020, according to a survey. 97% of members were happy with their networks. Prior to the advent of Medicare Advantage, only about 80-90% of Medicare recipients were satisfied with their coverage and care, and depending on what survey one believes, that rate may well have fallen of late.

Let's recap: Enrollment in private Medicare options is growing fast, and those who choose it are nearly universally satisfied with their coverage and treatment. Enrollment in private Medicare options by people of color and people with disabilities is soaring. Enrollment in private Medicare options is growing by leaps and bounds in urban centers and diverse states. And enrollment in private Medicare options is soaring despite its supposed shortcomings according to conventional wisdom: network restrictions and additional (but fairly small) premiums.

Why?

Because conventional wisdom on health care is wrong. Because ideologically extreme views on health care - whether it is to have a single, government-payer system or, on the other end, remove government entirely from providing and regulating health care - are wrong.

Medicare Advantage has provided us a model of what is possible when insurance companies are heavily regulated and have real competition (traditional Medicare). It has also provided us a model of how government-provided health insurance does not have to exist to devour private insurance. Both can - and should - coexist.