BY CHARLIE KATEBI,
OPINION CONTRIBUTOR — 08/07/18 06:30 PM EDT 1,118
THE
VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL
As the 2018 midterm
elections approach, growing numbers of progressive candidates have endorsed a
single-payer health insurance program that will supposedly cover all Americans
and deliver better medical care than our current health care system. However, new
research suggests that these promises could cost voters trillions more than
they expected.
According to a July
30 study from the Mercatus
Center at George Mason University, establishing a single-payer health care
program will cost taxpayers $32 trillion over the next 10 years. The author of
the report, Senior Research Strategist Charles Blahous, arrived at his estimate
by forecasting the cost of Sen. Bernie
Sanders’ (I-Vt.) Medicare For All Act. Sanders’
proposal would create a government-run health insurance program that enrolls
everyone, regardless of age, income, or health status. It would provide every
manner of medical care including doctor's visits, hospital stays,
prescription drugs, and nursing home stays. Furthermore, it would deliver
all of these services without charging premiums, deductibles, co-pays or any
other fees.
To pay for these
enormous promises, the federal government would have to nearly double all
the taxes it collects from individuals and corporations each year. This would
cost the average American more
than $18,000 in additional taxes.
Supporters of
single-payer health care haven’t balked at the plan’s astronomically high price
tag, instead arguing that $32 trillion will be a bargain for
taxpayers. Vox wrote that while
Americans would pay a lot more taxes to fund health care under Sanders’ plan,
they would subsequently pay less out-of-pocket since it would eliminate the thousands
in expenses people are currently paying for their private health insurance.
However, single-payer
would likely cost even more than Blahous’ study suggests. For instance, the
study assumes that moving everyone onto Medicare will reduce overall administrative
costs since Medicare spends less on overhead as a share of its budget than
private insurance companies.
Unfortunately,
Medicare doesn’t actually spend less on administration than private insurers.
Medicare’s overhead costs only appear small as a share of its total budget
because its recipients are much older than customers with private insurance,
and therefore spend a lot more on health care. If you breakdown Medicare’s
administrative costs on a per-patient basis, the program actually spends more on
overhead than private insurers. As a result, forcing everyone to enroll in
Medicare would increase health care administrative costs by more than $12 billion annually.
Sanders’ plan would
also cost more for other reasons. Blahous’ study assumes that a Medicare For
All plan would dramatically reduce health care spending by slashing
compensation to doctors, hospitals, and other providers. According to his
estimates, provider reimbursements would fall by 40 percent when patients leave
private insurance and enroll in Sanders’ expanded Medicare program.
But this is another
questionable assumption. It is true that Medicare currently pays doctors and
hospitals significantly less than
what private insurers pay. But there is no reason to assume that single-payer
advocates could convince Congress to impose Medicare’s low reimbursements
across the entire health care system — or that doctors and hospitals would
accept such an outcome.
Medical providers are
one of the most politically powerful interest groups in the United States.
Since 2008, health care associations have contributed over $1 billion in
campaign funding to candidates for federal office. And they heavily lobby
Congress, the White House, and executive agencies to tilt legislative and
regulatory decisions in their favor.
Health-care providers
demonstrated their enormous political influence when Republicans proposed
limiting the growth of Medicaid spending as part of their reforms to repeal and replace ObamaCare.
In response to this modest proposal, health-care associations waged an enormous
lobbying and public relations campaign to defeat these reforms. And despite
years of promises to fix this program, Republicans ultimately buckled under the
pressure of these interest groups.
If Congress can’t
muster the votes to slow the spending of a single health program, why would
single-payer advocates assume they could enact a whopping 40 percent pay cut across
America’s entire health care system? If Sanders’ plan was ever enacted into
law, interest groups would ensure they continue to receive high compensation
from the new single-payer plan, which will increase costs even further.
So while single-payer
supporters are right to want a better health-care system for the United States,
they should realize that forcing everyone to enroll in Medicare would only make
health care even more expensive and unaffordable.
Charlie Katebi is
a state government relations manager at The
Heartland Institute, a nonprofit, nonpartisan public policy think
tank.
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