Catastrophic Medicare for All

When my wife was laid off, our family ended up on her COBRA plan at a cost of around $2,000 a month. I looked for alternatives and found plans between $1,600 and $1,800 a month, but with significant trade-offs and nothing that felt like a real option for us.

I was looking at the problem as a self-employed business owner who has managed small businesses with only a few employees. For a younger, relatively healthy family, the choice can feel strange. You can spend what looks like a second mortgage on health insurance, or you can decide that the worst thing probably will not happen this year and roll the dice.

Why are there no better alternatives? That question is what brought me to Abdul El-Sayed and Micah Johnson's book Medicare for All. The authors describe an American system tied too closely to employment, where medical crises can become financial crises, and a comprehensive Medicare for All plan that positions a large public purchaser with the negotiating power that a fragmented market does not have.

While I found the policy proposal interesting, I was concerned that a comprehensive Medicare for All program would be politically dead on arrival. So I tried to brainstorm a more feasible middle path and landed on a public catastrophic health layer for all. This policy would support builders, freelancers, self-employed people, small-business employees, and those in between jobs. I do not think our political environment will allow the authors' push for comprehensive Medicare for All, Medicare Advantage for All, or a public insurance program that grows until it is responsible for every social condition associated with health. But I do think our country is ready for a catastrophic Medicare for all program.

By universal, I mean a public catastrophic Medicare benefit available to every citizen, regardless of employment, income, health status, or location. A worker would keep that protection after leaving a job, starting a company, or moving between states.

How employment became the doorway to health coverage

One of the book's most useful historical observations is that employer-based insurance was not inevitable. During World War II, wage controls limited what employers could offer workers, but health benefits were exempted. The tax treatment confirmed by the Internal Revenue Code of 1954 helped turn that workaround into the central structure of American health coverage. That history matters when a worker loses a job or decides to start a company.

The national numbers show the size of the problem. KFF (formerly the Kaiser Family Foundation) reports that the average total premium for employer-sponsored family coverage reached $26,993 in 2025, or about $2,249 a month. Workers paid an average of $6,850 toward that amount while employers paid the rest. At firms with 10 to 199 employees, the average worker contribution was $8,889, compared with $6,227 at larger firms. These numbers help explain why losing the employer contribution feels like falling through a trapdoor. KFF Employer Health Benefits Survey.

The Census Bureau's latest report found that 26.7 million people, or 7.9 percent of the population, were uninsured for the entire year in 2025. Employment-based coverage still reached 53.5 percent of the population, while direct-purchase coverage reached 10.5 percent. Employment remains the main doorway into the system. Census Bureau, Health Insurance Coverage in the United States: 2025.

Treasury has also documented the individual market's importance for people outside large employers. In 2022, 3.3 million self-employed workers and small-business owners ages 21 to 64 had Marketplace coverage at some point during the year, representing 28 percent of Marketplace enrollment in that age range, but that coverage is often just as expensive as the prices we found. U.S. Treasury analysis.

What the book gets right

The book argues that a health crisis can make a family's financial crisis worse. KFF estimates that Americans owe at least $220 billion in medical debt, based on Census Survey of Income and Program Participation data. The reference period is not the current year, but the point remains: medical debt is not an abstract policy problem. KFF on medical debt.

The authors also make a point about cost-sharing that deserves more attention than it usually receives. People generally use less health care when they pay more at the point of service. That does not answer every question about access or preventive care, but it suggests that a first public benefit should focus on expenses people cannot reasonably shop for or absorb.

Few people are shopping for an ambulance after a car accident. Few families can budget comfortably for an unexpected hospitalization, a serious trauma, or a medical condition that suddenly requires months of expensive treatment. Those are the risks I mean when I use the word catastrophic.

I do not yet have a final definition. A leading candidate would be an event-triggered major-medical benefit: inpatient hospitalization, major trauma, and selected high-cost acute conditions, perhaps combined with a high-dollar or household-income threshold. Routine visits, dental cleanings, ordinary prescriptions, and other lower-cost needs could remain in private coverage, an HSA-supported plan, or direct payment. Defining that boundary is work that my public benefit corporation, Arclight Action, plans to research further.

There is an obvious objection: catastrophic plans already exist. CMS describes ACA catastrophic plans as private plans that cover essential health benefits, provide preventive services, and protect against very high costs after a serious illness or injury. New hardship-exemption rules are making them available to more people who cannot receive premium tax credits or cost-sharing reductions. CMS catastrophic-plan guidance.

Those plans solve part of the problem, but those private plans still come with eligibility gates and plan availability that vary by age, income, hardship status, exchange, and geography. Even with the recent expansions, they are not the universal benefit I am describing. My proposal starts with a public catastrophic Medicare benefit available to every citizen, regardless of employment or ability to qualify for an ACA plan. Private coverage can fill the routine and supplemental gaps beneath it.

The limits of Medicare Advantage for All

The book presents Medicare Advantage for All as a way to preserve private plan administration inside a publicly financed system. The theory is familiar: private companies will manage benefits more efficiently than a government program.

The evidence does not give me much confidence in that theory. MedPAC estimates that Medicare will spend 14 percent more on Medicare Advantage enrollees in 2026 than it would have spent if those same people were enrolled in traditional fee-for-service Medicare, a projected difference of $76 billion. MedPAC says the higher payments are not an estimate of plan profits or administrative expenses. Most of the difference comes from favorable selection and coding intensity, making this a payment-design and program-integrity problem. MedPAC, March 2026 report.

The consequences reach beyond the people who choose an Advantage plan. MedPAC estimates that higher payments will increase Part B premiums by about $11 billion in 2026, roughly $175 per beneficiary per year. The quality-bonus program adds about $16 billion, while MedPAC questions whether the star-rating system reliably measures care quality.

The Office of Inspector General provides a more concrete example. It found that diagnoses reported only on health risk assessments or related chart reviews, with no other service records in the data, produced an estimated $7.5 billion in risk-adjusted payments for 2023. The finding raises two possibilities: some diagnoses may be inaccurate, or beneficiaries may not have received follow-up care for serious conditions reported in the records. HHS OIG on health risk assessments.

These are not isolated coding mistakes. Federal enforcement records show a recurring Medicare Advantage fraud pattern. In March 2026, Aetna agreed to pay $117.7 million to resolve Justice Department allegations that it submitted or failed to correct inaccurate diagnosis codes to increase Medicare payments. In January 2026, Kaiser Permanente affiliates paid $556 million to resolve allegations that they pressured physicians to add unsupported diagnoses after patient visits. In August 2026, The Villages Health System agreed to a $541.5 million settlement after self-disclosing that it caused false diagnosis codes to be submitted to increase Medicare Advantage payments and profits. Independent Health agreed in 2024 to pay up to $98 million over unsupported and invalid diagnosis codes, and Cigna paid $172 million in 2023 after the Justice Department alleged that it submitted and failed to withdraw inaccurate codes, including diagnoses based on vendor forms and unsupported chart reviews. DOJ on Aetna, DOJ on Kaiser, DOJ on The Villages Health System, DOJ on Independent Health, and DOJ on Cigna.

Risk adjustment is the mechanism. More severe diagnoses produce higher payments. When plans, provider groups, or vendors add diagnoses that the medical record does not support, Medicare pays more for a condition that was not documented, not treated, or not corrected.

Then there is the daily administrative experience. KFF reports that Medicare Advantage insurers handled nearly 53 million prior-authorization requests in 2024. They denied 7.7 percent, and 80.7 percent of the denied requests that were appealed were partially or fully overturned. Traditional Medicare had just over 625,000 requests. That comparison shows what happens when a public benefit is routed through private utilization-management programs. KFF on Medicare Advantage prior authorization.

I am not against private insurance. Supplemental coverage, private clinics, HSAs, and competing services all have a place, especially when filling the gap on everything that cannot be defined as catastrophic. I am against assuming that private intermediaries should control the public catastrophic layer after this record of payment distortion and administrative friction.

A public payer still needs good payment design

The book is also right that one large purchaser can negotiate more effectively than millions of individual patients. Public purchasing power works when the payment formula turns that leverage into disciplined rates and useful care.

Medicare's skin-substitute experience is a useful warning. OIG reports that Part B spending on skin substitutes surpassed $10 billion annually by the end of 2024, driven by both increased utilization and higher prices. OIG also found that costs for patients reportedly treated at home were four times the costs for patients treated in an office setting. CMS responded in its 2026 physician-fee-schedule rule by moving most skin substitutes to an incident-to-supply payment approach and estimating $19.6 billion in gross fee-for-service savings for 2026. OIG on skin-substitute payment trends and CMS payment update.

The lesson is that public payment can work, but it can take years to recognize a bad incentive and redesign it. MedPAC has made a similar point about the long-running ASP-plus-6-percent formula for Part B drugs: a percentage add-on creates a larger dollar incentive for higher-priced drugs. MedPAC on Part B drug prices.

A public catastrophic layer would need independent payment advice, transparent coding rules, routine audits, and spending-velocity triggers that force a review when a product, service, or setting grows faster than its clinical justification. The public payer would have leverage. It would also have to use that leverage carefully.

There may be a constructive opportunity here as well. A predictable public purchaser could create a demand signal for research, value assessment, and challenge prizes aimed at the conditions that create the greatest financial and human losses. That possibility deserves exploration.

Keep the benefit medical

The book recognizes that economic inequality, racism, gun violence, loneliness, climate, and other conditions shape health. A catastrophic insurance program needs a defined medical scope and a clear place for other institutions to act.

Scope matters. Once a public health benefit starts paying for every upstream factor correlated with poor outcomes, it becomes easy to build new programs and contracts without a clear boundary around the original promise. Churches, neighbors, civic groups, charities, philanthropy, and voluntary associations can play an important role in belonging and community. A catastrophic medical safety net should concentrate on medical disasters.

What the universal benefit would be

The proposal is a universal public medical benefit for catastrophic events. Every citizen would be eligible regardless of employment, income, health status, or location. It would cover inpatient hospitalization, major trauma, and selected high-cost acute conditions, with the precise threshold established through public research and legislation. Private HDHP or HSA coverage could sit underneath it for routine protection, and private supplemental plans could cover services outside the public benefit. The program would have a defined benefit boundary, transparent financing, clear eligibility rules, and payment guardrails that change when the evidence changes.

The infrastructure builders need

National health spending reached $5.3 trillion in 2024, equal to 18 percent of GDP. That is too large a system to repair with slogans, and too important to leave to whichever institution has the strongest lobby or the most complicated payment formula. CMS National Health Expenditure fact sheet.

I finished Medicare for All more convinced that health security is an economic issue. I also finished it less convinced that comprehensive coverage is the only serious public option, or that private administration automatically supplies discipline.

When a self-employed person receives a COBRA notice, the decision should concern supplemental coverage, not whether the family can survive an uncovered medical disaster. A narrow public catastrophic layer could keep a medical disaster from becoming the event that ends a business, a career, or a family's financial future.

That is the question Arclight Action will keep working on: what should the benefit include, what should it leave alone, and what payment rules would keep the safety net from becoming another blank check?