DANIEL VAUGHAN: The false promises of Medicare for All

August 6, 2018

DANIEL VAUGHAN: The false promises of Medicare for All

One of the most notable flaws of Sen. Bernie Sanders’ popular Medicare For All plan is that he’s never had the Congressional Budget Office (or any other group) estimate how much it would cost.

For all the talk that he and other so-called “democratic socialists” dish out on the benefits of Medicare for All and other single-payer plans, they never want to talk about what it would cost people like you and me: the taxpayer.

And there’s a reason they don’t want to talk costs: by even the most generous estimates, Medicare for All is an expensive political ploy with no real merit.

We know this because there have been two major studies of Sanders’ plan — one by a liberal think tank and one by a conservative think tank — and because we have a real-world example of single-payer health care failing on cost: the state of California.

The latest study on Sanders’ plan was done by the conservative-leaning Mercatus Center out of George Mason University. The study’s author, Charles Blahous, a senior research strategist and former public trustee for Social Security and Medicare, found that Bernie’s Medicare for All plan would cost taxpayers an additional $32.6 trillion over the next 10 years, or $3.26 trillion annually.

For reference, the Congressional Budget Office estimates that the U.S. deficit in 2018 will be close to $833 billion. Bernie’s plan would throw trillions in expenses on top of the already ballooning debt.

In his report, Blahous noted that his estimates were conservative “because they assume the legislation achieves its sponsors’ goals of dramatically reducing payments to health providers, in addition to substantially reducing drug prices and administrative costs.”

Even still, says Blahous, “a doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

And that’s if everything goes smoothly. If anything goes wrong or costs more than expected, these numbers grow exponentially.

To be fair, this is from a conservative think tank, and Sanders argues that the study is little more than a partisan hit job, calling the estimate a “Koch brothers” fueled conspiracy.

There’s just one problem with that retort: liberals, using a similar methodology, using the same rosy projections, came up with an almost identical number.

The Urban Institute, a liberal think tank started by President Lyndon B. Johnson’s administration to analyze great society measures, estimated that Sanders’ plan would cost $32 trillion over the course of the next decade, or $3.2 trillion annually.

(Remember: the Mercatus Center estimated $32.6 trillion over 10 years, or $3.26 trillion annually.)

The Urban Institute noted that this massive increase in spending comes from the federal government taking over entire sectors of the private economy, and assuming some of the roles of state governments. Even still, their estimates are also conservative, because they make the same assumptions as Sanders, taking his plan at face value.

The next line of defense raised by Medicare for All is that Bernie’s plan saves money over the long term. Both Vox and Mother Jones spun reports in defense of Sanders, saying that these studies are proof of long-term health care savings.

But there’s a problem with those defenses. Remember how I keep saying that these studies are conservative and use rosy projections? There’s a reason for that: Bernie’s assumptions will never happen in real life.

Charles C. W. Cooke at National Review summed up the most substantial problems in Sanders’s plan, writing that it would:

Force every doctor and hospital in America to accept Medicare reimbursement rates for all patients — these are 40 percent lower than the rates paid by private insurance — while assuming that this would have absolutely no effect on their capacity or willingness to provide services

Raise taxes by 10 percent of GDP— overnight

Explain to the 150 million people with private insurance that the rules have been changed so dramatically that (a) they can no longer keep their plans, and (b) henceforth, tens of millions among them will be paying more in taxes than they were previously paying in both premiums and out-of-pocket costs

Doctors already refuse to treat Medicare patients all the time. They get frustrated with the reimbursement rates and the litany of regulations around Medicare programs.

You cannot force them, overnight, to take on work they don’t want.

Moreover, everyone remembers the utter and complete disaster of the Obamacare rollout, the mass protests that shook the nation when people learned they were paying higher costs and losing their doctors and plans.

Medicare for All makes Obamacare seem like child’s play.

While Democrats like to talk a big game on raising taxes, when faced with angry middle-class voters, they routinely cave on the topic. Avik Roy noted in an article in Forbes that Bernie’s plan calls for nearly $14 trillion in new taxes, of which $6.3 trillion come directly from raising the payroll tax, which is a direct shot at the lower and middle classes.

Paying for Medicare for All isn’t an exclusively conservative concern. California tried to implement a single-payer system, and their entire state legislature balked at the price. It’s projected that a single-payer system in California would cost taxpayers $400 billion, which may even seem small when you’re talking about trillions on the federal level.

But for reference, when California considered this last year, their entire state budget clocked in at $180 billion, and under their plan, they would have to find another $200 billion in new taxes. Reason magazine noted at the time that California and other blue states faced the same issue: the only way they could have their fantasy of single-payer or Medicare for All is to double or quadruple taxes to sustain it.

That’s why Bernie Sanders has never let anyone score his plan. It’s a fantasy, only used to whip up crowds in excitement.

Once again, the socialists — democratic or not — must face the cold hard realities of math.


Daniel Vaughan

Daniel Vaughan is a columnist for the Conservative Institute and lawyer in Nashville, Tennessee. He has degrees from Middle Tennessee State University and Regent University School of Law. His work can be found on the Conservative Institute's website, or you can receive his columns and free weekly newsletter at The Beltway Outsiders. Connect with him on Twitter at @dvaughanCI.