Tanner: The questions medicare-for-all supporters must answer
By Michael D. Tanner |
Vermont senator and Democratic presidential candidate Bernie Sanders has officially unveiled the latest version of his plan for a government-run health-care system.
This year, his Medicare for All legislation is co-sponsored by at least five of his fellow presidential contenders: Senators Corey Booker, Kamala Harris, Kirsten Gillibrand, and Elizabeth Warren, and Representative Eric Swalwell. Several other prominent Democrats have voiced their support for the concept, if not Sanders’s specific version of it. And the polls show that voters might be receptive.
What’s more, there is a genuine need for health-care reform. Obamacare remains deeply troubled, with costs rising, choices restricted, and its promise of universal coverage unrealized. Meanwhile, Republicans are divided, dispirited, and largely clueless — opposed to Obamacare, but unable to formulate a plan of their own.
Medicare for All, to a large extent, has filled the vacuum created by that inability. But before we take it too seriously, there are a few questions that supporters must answer:
How will you pay for it? We don’t yet know exactly how much Sanders’s plan will cost, but the price is bound to be high: Previous versions of the plan were estimated to cost $32-38 trillion over the next 10 years, and the senator’s latest version would provide even more generous benefits.
In fact, both the legislation and the Sanders campaign’s summary of it are extremely detailed about all the benefits the plan would provide. It would cover virtually all hospital and physician care, preventive services, mental-health services, dental and vision care, prescription drugs, and medical devices. And, except for brand-name drugs, there would be absolutely no deductible, co-payment, or other out-of-pocket expenses. The plan would not only provide far more extensive benefits than private insurance plans or today’s Medicare; it would provide benefits in excess of those offered by other national-health-care plans around the world.
Bernie Sanders may currently be riding a wave of political momentum, but his new health-care plan remains untested.
But when it comes to paying for all these goodies, Sanders is exceedingly vague. Neither the legislation nor his summary includes a funding mechanism. Instead, Sanders calls for “a vigorous debate as to the best way to finance our Medicare for All legislation.” As far as I know, vigorous debates don’t pay the government’s bills.
Sanders does provide a helpful list of possible tax hikes that could be considered: a 7.5 percentage point increase in the payroll tax; an income-based premium paid by all Americans (roughly a 4 percent income tax); significant increases in tax rates for those earning more than $250,000 per year; increased corporate taxes; big increases in the capital-gains tax; and a new wealth tax. Of course, some of the new taxes would be offset by the legislation’s elimination of insurance premiums and out-of-pocket costs. But most middle-income families would likely end up as net losers — and that’s without taking into account the drag on economic growth and job creation that would result from taxing risk-taking and entrepreneurship.
If you like your insurance, will you be allowed to keep your insurance? Roughly 91 percent of Americans have health insurance today, and polls suggest that most Americans are generally satisfied with their coverage. For example, Gallup reports that 69 percent of Americans are satisfied with their current insurance plan. Satisfaction runs even higher for Americans who receive employer coverage. But Sanders’s plan would summarily kick every American off their current plan and dump them into the new government-run system. In an interview for CBS News, Sanders gleefuly suggested that private insurance would be reduced to paying for “nose jobs.” Of course, the proposal’s backers can try to argue that in exchange for giving up their current plans, Americans will get something better. But voters may not believe them. Similar arguments didn’t fly with those who lost their insurance through Obamacare.
At its heart, Sanders’s plan is fundamentally anti-choice. It is a one-size-fits-all, government-knows-best concept. Americans may have a problem with that.
What about your doctor? Most of the cost estimates above assume that the new system will adopt Medicare’s price controls. But Medicare already provides extremely low reimbursements for many services, in some cases below cost. In fact, Sanders’s plan depends on a cut of up to 40 percent from the reimbursement that doctors currently receive through private insurance.
Providers have traditionally shifted some of their costs to private insurance. Others have simply refused to accept Medicare patients, or limited the number they do take. But those options would no longer be available under Sanders’s plan, which could lead many physicians, especially older and more experienced ones, to leave the profession.
It’s not just physicians that are likely to be hit by Medicare for All’s price controls. Research and development could be slowed or, in some cases, abandoned, too. That would mean fewer medical breakthroughs. Just think what would have happened if we had imposed medical-price controls across the board in, say, 1920. How much medical progress would have been lost?
What will happens after you wipe out the insurance industry? It is obvious that Sanders despises the insurance industry. Still, there would be real collateral damage from his plans to carpet-bomb the industry. Estimates suggest that as many as 1.8 million jobs in the insurance, benefits, and human-resources industries could be at risk. The median wage for these jobs runs in excess of $55,000 per year. These are the “good jobs at good wages” that the Democratic presidential candidates talk so much about. And while some might be absorbed into the new government bureaucracy, hundreds of thousands of others would likely have to find new work.
It is not generally the government’s job to protect people from changes in the economy, but, even so, the government should generally try to avoid deliberately wiping out entire industries all by itself. Sanders and his backers have seemed strangely unconcerned with that prospect so far.
Most coverage of the health-care debate has focused on the vulnerability and ineptitude of Republicans. That coverage is largely deserved. But sooner or later, Medicare for All supporters will be pressed to answer questions about their own plans. And at that point, they might find that voters become much less receptive to what they’re selling.