Universal Health Care Proposals: And the Winner is…
PUBLISHED July 23, 2026
For those of you who have been reading my blog all along, you may wonder why we need another universal health care plan when we already have a proposal for Medicare for All. I can give you three reasons why.
One, Medicare for All does not tell the American people how much they will have to pay for health insurance. In Germany people know. A person earning $60,000 a year pays about $438 a month for individual coverage.* In the Netherlands, they also know. Citizens pay approximately $179 a month.
My belief is that more Americans will support universal health care if they see it as an investment in themselves. Before they can do that though, they need to know how much a policy will cost them.
One reason Medicare for All does not put a dollar amount on health care costs is that it has never done a cost analysis of who should pay what for what. The National Health Expenditure tables break down current spending by households, business, federal government and state governments. Medicare for All should do the same by telling the American people how much each of those parties would pay under its operating model.
Bond investors, for one, would appreciate this degree of transparency. Having a financially coherent plan could help keep interest rates down if we need to borrow money in a transition to Medicare for All.
Rising Costs
Second, Medicare for All is not cost-effective. With Medicare’s traditional fee-for-service program, beneficiaries have a wide selection of doctors from whom they can choose to receive care,1 but providers have few incentives to coordinate patient care and control costs.2 Not only does this cost taxpayers money, but beneficiaries risk medical debt because there is no limit to out-of-pocket costs under traditional Medicare.
Moreover, Medicare typically makes a separate payment for each service or item a beneficiary receives under fee-for-service. This gives health care providers an incentive to increase the volume of services they offer.3 For example, cosmetic procedures and spinal surgeries both have a higher risk of unnecessary utilization.4 Providers also have an incentive to increase the volume of services that have high fixed costs with relatively low marginal costs (e.g., advanced imaging).5
Medicare Advantage (MA), the preferred Medicare option for over one-half of all Medicare enrollees, is also good at pick-pocketing American taxpayers. The basic theme behind MA is that private companies compete with each other to deliver cheaper Medicare services.6 By law, they must limit out-of-pocket spending for beneficiaries.7
Instead of reducing health care costs through cost savings, the insurance companies receive rebates from the federal government to cover that expense. Rebates are at record levels—$2,660 a year per beneficiary in 2026—and are 2½ times more than what they were in 2018.8 These rebates are paid from the Medicare trust fund, which means that fee-for-service beneficiaries help finance the rebates, even though they are not offered the same amount of out-of-pocket reductions.9 Significantly, insurance companies are not required to show how much of each rebate goes to profit and administrative costs.10
Altogether, in 2026, the federal government is projected to pay MA companies 14 percent more, or about $76 billion, than traditional fee-for-service Medicare to insure Medicare beneficiaries.11 Part of the extra funding to stimulate competition comes from rebates, but part also comes from factors such as favorable selection and coding intensity.12
Fragmentation Continues
This brings me to my third reason: Medicare for All is not doing enough to address fragmentation. Although Medicare Advantage is probably further along in coordinating care than Maryland’s Total Cost of Care program, an initiative I talked about in an earlier blog, MA’s efficiency gains are not shining through.
According to MedPAC projections, the average MA insurance company can provide the standard Medicare benefit to its enrollees, including medical expenses, administrative costs, and profits, for 5 percent less than traditional fee-for-service Medicare.13 Those cost savings are wiped away, however, with the additional incentive payments the federal government offers MA; nonetheless, knowing that there is a potential to save money offers a glimpse of what is possible if we can coordinate care better.
All-American Care, on the other hand, would methodically attack fragmentation. Unlike Medicare Advantage, all insurance companies would have to offer a basic standard policy at a uniform price to cover people’s medical needs. The federal government, in turn, would take an active stance in making sure that all individuals have affordable access to quality health care under a market-based system.
Under a good primary care system, a close relationship exists between the primary care team, the patient, their family, and the community. Care is tailored to the patient’s needs, and for patients with chronic illnesses, there is strong co-ordination across all levels of health care.
The Netherlands’ health care system—the inspiration for All American Care—ranks as one of the top insurance models in the OECD. It does that by using primary care physicians as gatekeepers, having a high continuity of care, and offering providers large financial incentives to improve quality of care. This approach has led to lower avoidable hospitalization, which, in turn, can reduce the amount of premium people pay.
In short, eliminating fragmentation means putting the patient’s needs first with all stakeholders coalescing around the patient’s best interests.
Medicare, and by extension, Medicare for All, has not shown that it can attain that level of coordination and integration.
It’s time to move on.
Note: This is an ongoing series of blogs to develop an affordable, universal health care plan before the 2028 presidential election.
Footnotes
1Medicare Payment Advisory Commission, Report to the Congress: Medicare and the Health Care Delivery System (Washington, DC: MedPAC, June 2026), 9.
2Ibid., 27.
3Ibid., xii.
4Ibid., 104.
5Ibid., 16.
6Medicare Payment Advisory Commission, Chapter 12: The Medicare Advantage Program: Status Report, in March 2026 Report to the Congress: Medicare Payment Policy (Washington, DC: MedPAC, 2026), 344.
7Ibid., 344.
8Ibid., 344, 347.
9Ibid., 367.
10Ibid., 369.
11Ibid., 346.
12Ibid., 345.
13Ibid., 373, 374.
Author’s Calculations
*Germans pay out 8.75% of their pay to health insurance (7.3% + 1.45%). $60,000 x .0875 = $5,250 a year or approximately $438/month.
Selected References
Medicare Payment Advisory Commission. (2026, June). Report to the Congress: Medicare and the health care delivery system. https://www.medpac.gov/document/june-2026-report-to-the-congress-medicare-and-the-health-care-delivery-system/
Medicare Payment Advisory Commission. (2026, March). Chapter 12: The Medicare Advantage program: Status report. In March 2026 report to the Congress: Medicare payment policy. https://www.medpac.gov/document/chapter-12-the-medicare-advantage-program-status-report-march-2026/
Organisation for Economic Co-operation and Development, & The Health Foundation. (2025). How do health system features influence health system performance? OECD
Publishing. https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/03/how-do-health-system-features-influence-health-system-performance_c35f6018/
Paragon Health Institute. (n.d.). Coding intensity. https://paragoninstitute.org/glossary/coding-intensity/
Paragon Health Institute. (n.d.). Favorable selection. https://paragoninstitute.org/glossary/favorable-selection/
PricewaterhouseCoopers. (2026, June 30). Germany: Individual – Other taxes. Worldwide Tax Summaries. https://taxsummaries.pwc.com/germany/individual/other-taxes
Tikkanen, R., Osborn, R., Mossialos, E., Djordjevic, A., & Wharton, G. A. (2025). International health care system profiles: Netherlands. The Commonwealth Fund. https://www.commonwealthfund.org/international-health-policy-center/countries/netherlands