This is the Cato Daily Podcast for Monday, September 18th, 2017.

I'm Caleb Brown.

Senator Bernie Sanders would like to see Medicare expanded to cover every American,

but it's worth examining how Medicare works, where it fails, and how expensive it's become.

Michael Cannon directs the Cato Institute's health policy studies, he comments.

Bernie Sanders has proposed Medicare for all.

What is Medicare functionally.

So Medicare is the entitlement program the federal government runs

that provides health insurance to seniors and the disabled.

It is what we call a single payer program where there's basically one payer.

Seniors do pay a bare amount out of pocket, but it is a program that has a monopoly over providing health care to seniors and pays for

the vast majority of their medical bills.

And it's a very centralized form of economic planning.

The US Medicare program, under that program,

the federal government collects all the tax revenue that supports it. The federal government decides what sort of benefits seniors are going to get and the federal government sets prices for countless services that seniors receive all across this country.

They're just spitting out these administered prices which determines how the resources

get allocated because stuff follows prices.

So this is a very centralized top-down way of delivering health care.

And Medicare pays providers based on the number of individual services performed.

Can you go through what that means?

That's right. When it comes to

physicians, especially Medicare pays on a fee for service basis. So for every

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