The Road to Universal Medicare

This article appears in the October 2026 issue of The American Prospect magazine. If you’d like to receive our next issue in your mailbox, please .

Universal health coverage under Medicare is a natural for Democrats. According to a new report by the American Economic Liberties Project, between 2005 and 2025 the annual cost of employer-sponsored family coverage increased from $12,214 to $35,119. Deductibles and co-pays keep rising as well.

President Trump’s assaults have added to the system’s miseries. Trump’s budget terminated Biden-era tax-credit subsidies under the Affordable Care Act as of the end of 2025. The average recipient saw premium costs more than double in 2026. At least 2.6 million people out of the 22 million insured under the ACA dropped coverage entirely.

The effective dates of Trump’s cuts in federal Medicaid outlays were delayed until after the 2026 election. But next year, some 15 million people are at risk of losing Medicaid coverage. All told, at least five million people already lost health insurance in the first six months of 2026.

Merely having Medicare for All without reforming the way health care is delivered would just stick government with higher costs. But universal Medicare, by giving government a great deal more leverage over the entire system, is key to addressing its other deficiencies.

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Even if Democrats can agree on universal coverage, the transitional challenges seem daunting. Medicare is tax-supported. Commercial insurance is financed by premiums. An immediate shift to universal Medicare would require tax increases, but only some people would get savings from cuts in premiums. Most of those savings would go to employers.

The best approach to solve this transitional problem has been proposed by our colleague Jacob Hacker, the Yale political scientist who serves on the Prospect board. Hacker first outlined a version of it in the Prospect in 2018.

Hacker calls it Medicare Part E, the E standing for Everyone. Hacker begins with what used to be called “play-or-pay.” Employers would be required either to provide good health insurance or to pay for Medicare for their employees.

This would have three huge benefits compared to other transitional approaches. First, it would eliminate the need for a tax increase. Some employers would keep their commercial insurance; most would pay into Medicare on behalf of employees. Either way, no new taxes. Over time, the superior efficiency of Medicare would lead more employers to shift to Medicare. Only truly efficient commercial insurers (if there are any) would survive.

Second, unlike other incremental approaches to universal coverage, this one is easy to explain and campaign on. Everybody gets insurance, either through employer-financed commercial insurance that meets Medicare standards, or through Medicare itself. And no tax hike.

Third, this approach bridges over what Hacker calls the label wars. Candidates who like the Medicare for All label can embrace it. So can candidates who want universal coverage but not immediate Medicare for All.

It’s important to get this right. The problem of large tax increases in a one-time shift killed an attempt to have single-payer insurance in one state. In Vermont, the legislature enacted a single-payer bill in 2011 called Green Mountain Care, with the strong support of Gov. Peter Shumlin, but left financing details for later. After the details were unveiled—for an 11.5 percent payroll tax on employers plus an income-based premium assessment of up to 9.5 percent—public support collapsed. Shumlin, favored heavily for re-election in 2014, barely won. In late 2014, the state abandoned the plan entirely.

Paul Krugman has proposed a “Medicare Buy-In.” Krugman would allow individuals as well as employers to buy in to Medicare. But this adds complexity. It’s better and simpler to promote the transition to Medicare for All with an employer mandate and have employers bear the costs.

Our colleague, Paul Starr, has proposed an optional Medicare buy-in for people aged 50 to 64, who typically pay very high rates for their insurance. This is good, but Hacker’s universal Medicare Part E is simpler and better.

Pete Buttigieg proposes what he calls Medicare for All Who Want It. That’s catchy, and it implies greater freedom of choice. But of course, Medicare itself is the ultimate freedom-of-choice plan, since unlike commercial insurance plans, it allows people to use any doctor or hospital. Shame on Democrats who fail to emphasize that.

Others, including House Democratic Leader Hakeem Jeffries and a bipartisan centrist group led by Reps. Brian Fitzpatrick (R-PA) and Tom Suozzi (D-NY), propose making permanent the Biden subsidies to the Affordable Care Act that Trump canceled. But this approach would leave all of the inefficiencies of the current system intact while having the government bankroll more of the commercial insurance industry.

Readers may recall that it was Hacker who came up with the original public option in the context of the debate about the Affordable Care Act. People who got insurance under the ACA could opt for a commercial plan or for a public plan modeled on Medicare.

Hacker correctly assumed that the more cost-effective option of public insurance would gradually crowd out commercial insurers. Unfortunately, the private insurance industry read Hacker’s proposal. Even though they could not kill the ACA legislation, they mounted an all-out and successful campaign to kill the public option. Hacker II is far superior to Hacker I because it shifts the public option to employers, coupled with a requirement to provide Medicare-quality insurance, and thus creates incentives for them to shift to Medicare.

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SINCE THE SPONSORS OF THE AFFORDABLE CARE ACT had to jettison the public option in order to get the ACA through Congress (and barely got it enacted at all), why should we think that the more transformative Medicare Part E plan could get enacted now? The answer is that the entire health care system is far more enshittified now than it was in 2010, when Democrats had to settle for a reform that only increased coverage by about 7 percent of the population and achieved that by subsidizing rather than supplanting private insurance, thus reinforcing the present hyper-commercialized system.

Today, there is widespread rage against the commercial insurance industry and the drug industry. When Luigi Mangione stalked and murdered the CEO of UnitedHealthcare, he had plenty of sympathizers. One poll found that 41 percent of American voters under 30 perversely thought the killing was acceptable.

Even Donald Trump, recognizing the extreme unpopularity of Big Pharma, has politically abandoned the big drug companies, claiming credit for caps on drug prices (that were actually the work of Joe Biden) and adding his own proprietary drug discount program. As bogus as these Trump maneuvers are, the man knows which way the wind is blowing.

If Democrats win the presidency and a working majority in Congress in 2028, the Hacker version of Medicare for All is definitely a political possibility. In the meantime, it is a superb program to run on. Medicare is astonishingly popular, and for good reason. The popularity of Medicare is the flip side of the extreme unpopularity of the insurance and drug industries and the frustration people experience trying to get care.

Medicare for All is a far better brand for Democrats than building on the Affordable Care Act. There is an important ideological subtext: Public is not only more socially just than private, it’s also more efficient. Mixed public-private deals like the ACA are often a muddle—less efficient, more easily gamed, and more complex to use. As noted, to the extent that the current system is a cesspool of profiteering based on market concentration, a comprehensive public system like Medicare gives the government far more leverage to reduce the gaming.

Some key details do need to be ironed out. The so-called Medicare Advantage program piggybacks on Medicare funding and the Medicare brand. But Medicare Advantage policies are commercial insurance products that make their money by targeting their marketing to relatively healthy seniors, and then trying to restrict actual care when people get sick. With Medicare for All, we could either kill Medicare Advantage outright, or end the more than $80 billion annual subsidy that these plans get from Medicare, which would make Medicare Advantage plans unprofitable.

Medicaid spends just under a trillion dollars a year. With Medicare for All, there would no longer be any need for a separate means-tested program, so Medicaid would be folded into Medicare. The largest single Medicaid cost is long-term (nursing home) care. That and home care would also be folded into Medicare.

The Medicare Part D program is a Medicare-branded private insurance product for prescription costs. It’s an inefficient crazy quilt. So drug benefits would also become part of Medicare. That shift would eliminate parasitic pharmacy benefit manager scams.

Finally, the fact that Medicare does not cover all necessary medical needs has given rise to private “Medigap” plans. Less-affluent people who can’t afford the premiums either pay out of pocket or go without care that they can’t afford. Universal Medicare for All needs to cover everything that Medigap policies cover.

But wouldn’t all this be astronomically expensive? Quite the opposite. Yale economist Zack Cooper compared Medicare reimbursements with reimbursements paid by commercial insurers. Because of the market power over insurers created by hospital mergers and consolidations, commercial insurers pay vastly more. Hospitals get an average of $29,000 for a hip replacement covered by commercial insurance but only $16,000 for one covered by Medicare. Those costs are passed along to the public and to the taxpayer, since over half the costs in the system are paid directly or indirectly by the government.

And the bias in favor of procedures and technologies that command maximum reimbursements has led to overspending on specialty care and a severe shortage of primary care practitioners, as I wrote in our June 2026 issue. A fragmented system can’t solve this imbalance piecemeal. Medicare for All could.

The new report from the American Economic Liberties Project details the costs and inefficiencies produced by the hyperconcentration of the commercial health care industry. Today, according to the report, “Six Big Medicine companies now rank among the Fortune 15—more than Big Tech or any other sector. In 2025, they pocketed nearly $34 billion in profit.” But their profits are only a small part of how they contribute to the sheer inefficiency and misallocation of resources in the system.

The task of the next administration is not just supplanting commercial insurers with Medicare to provide universal and affordable coverage, but also getting rid of the extreme concentration. Public dismay with health care has reached a point where Republicans as well as Democrats are demanding fundamental reform. For example, the Break Up Big Medicine Act is co-sponsored by Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO). It would prohibit insurers, pharmacy benefit managers, and wholesalers from owning or controlling providers.

Supporters of Medicare for All need to appreciate that reform is not just a matter of getting to single-payer. It also entails using the power of that single-payer to decommercialize and simplify our badly corrupted health care system.

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