Sanders' Medicare for All Delusion
Americans might love what Sanders offers in the way of more benefits for more people. What they would hate is paying for it.
Bernie Sanders has a health care plan he calls Medicare for all. He's underselling it. His proposal really should be called Medicare for all and a pony. It's everything you could want and then some.
Medicare is a giant government program that pays for health care for seniors and the disabled. Its costs are mushrooming. Over the next 10 years, outlays are expected to grow by nearly a third as a share of the economy; over the next 30 years, those costs are expected to double.
Revenues, however, will lag. The Medicare trust fund is on pace to run out of money by 2029.
It's not clear that we as a country can afford Medicare as it currently exists. Merely preserving it without significant cuts would eventually require a tax increase that working people would resent. But instead of looking for ways to economize, the Vermont senator wants to expand the program in a way that the term "vast" barely begins to capture.
His majestic vision goes beyond merely including the entire U.S. population in Medicare—which would increase the number of recipients by sixfold in just four years. Sanders wants to add coverage for dental, vision and hearing needs, which the program now excludes. And he promises "no more copays, no more deductibles and no more fighting with insurance companies when they fail to pay for charges."
He's talking about a huge change. As a study by the Kaiser Family Foundation noted, "Medicare has relatively high cost-sharing requirements for covered benefits and, unlike typical large employer plans, traditional Medicare does not limit beneficiaries' annual out-of-pocket spending." In 2010, it found, the average recipient paid $2,746 for deductibles, coinsurance and the like (not counting premiums).
Under Sanders' proposal, the government would pay all those expenses—not for 55 million people but for 325 million. Actually, it would pay all those expenses plus a lot of new ones, because relieving patients of any financial obligation would induce more people to get more care. If you reduce the price of a good to zero, the demand for it will rise—usually by a lot.
American advocates of single-payer health insurance love the Canadian system. But Sanders apparently finds it wanting. His plan would provide even more benefits than Canada's.
Democrats recently saved their Obamacare from the certain death it faced a few months earlier. The Affordable Care Act, once unpopular, gained broad support because Americans came to see it for what it is: an incremental and fiscally restrained method of expanding the number of people with decent coverage with minimal disruption.
The failed Republican effort to repeal and replace it holds useful lessons. One is the importance of caution. Americans distrust any ambitious change in the realm of medical care. They fear being deprived of something they have and value, and they stand ready to punish the culprits.
Another is the danger of overpromising. Republicans in Congress led us to believe they could deliver lower premiums with no individual mandate and without reducing the number of people covered. When it became clear they couldn't deliver, public opinion rebelled. Slogans are easy, but when it comes to health insurance, substance is hard—very hard.
Democrats have an understandable attraction to a single-payer health care system. It's conceptually simple; it's universal; and it builds on a program that is popular with those it covers. But all this is a siren call that would lead them straight to the rocks.
Americans might love what Sanders offers in the way of more benefits for more people. What they would hate is paying for it. One notable shortcoming of the plan he unveiled is that it has no price tag.
Would you like a fabulous meal? Of course. Would you order it without knowing what it costs? No.
The upshot of the ACA's survival is that Democrats are free to take credit for its benefits while blaming President Donald Trump and Congress for its shortcomings. They can press for small improvements at no political risk. If they decide to embrace Medicare for all, though, they may win votes in the short run while inviting failure in the long run.
What we should have learned from the health insurance debates of the past 25 years is that good politics often makes for bad policy. And bad policy, ultimately, is bad politics.
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