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Medicare for All Would Actually Be a Government Takeover of Health Care

House Democrats' new single-payer bill would legally prohibit today's private health insurance and determine financing for doctors and hospitals.

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ARON P. BERNSTEIN/REUTERS/Newscom

A decade ago, as the legislation that would become Obamacare was making its way through Congress, Republicans frequently blasted the Democrats' health plan as a "government takeover of health care." That phrase, introduced into circulation by GOP messaging guru Frank Luntz, was eventually awarded Politifact's Lie of the Year.

One could argue about whether the GOP's attack was the most significant lie of 2010, but it was, at minimum, an exaggeration. Although the Affordable Care Act increased regulation on individual health insurance to the point where it became something resembling a public utility, it left the bulk of the market for private health coverage intact, and even provided subsidies so that people could obtain (heavily regulated) private coverage. Today, an estimated 177 million Americans have private coverage.

The single-payer health care plans now being put forth by Democrats under the label "Medicare for All," however, would eliminate that coverage. As Rep. Pramila Jayapal (D–Wash.) said this week when announcing House Democrats' new Medicare for All bill, the plan would "mean a system where there are no private insurance companies that provide these core comprehensive benefits that will be covered through the government." Unlike Obamacare, then, Medicare for All can legitimately be described as a government takeover of health care.

Although Jayapal's plan would allow for the creation of a secondary market for supplementary coverage in addition to the government-run plan and direct cash payments to doctors, the market for the private health coverage that tens of millions of Americans currently have would be eliminated. Employers and insurers would be prohibited by law from providing the same benefits as the the government plan, a prohibition that goes further than some other countries with national health care systems. Private insurance as we know it today would be illegal.

And while the federal government would neither own hospitals nor employ doctors directly, it would be in charge of the vast majority of the nation's health care financing. That would include setting a "national health budget"—essentially, a federally imposed cap on total health care spending—and divvying up those funds by region. The federal government would also determine the budgets for capital improvements at medical facilities and set up a fee schedule imposing rates paid to doctors in private. In addition, the government would also specify staffing levels for physicians, and determine the preferred ratio of nurses to patients at any given facility.

It's true that the government already sets rates for Medicare in its current form, and those rates exert a significant influence on the administration of health care throughout the country. But today's Medicare exists alongside multiple private payers that would be eliminated under single-payer, leaving the government as the sole payer for most services.

So while doctors and hospitals would not technically be state owned under Medicare for All, the federal government would determine how the vast majority of the nation's health care dollars would be spent, making providers even more reliant on federal funds—and more susceptible to the influence and incentives of federal payment schemes—than they are today. Some practitioners might avoid this by accepting only cash payments, but it's reasonable to assume most would not. As a consequence, doctors and others in the health industry would become de facto federal employees, with significant staffing and payment decisions made by the federal government, according to formulas set by federal agencies.

Medicare for All, as envisioned by single-payer proponents like Jayapal and Sen. Bernie Sanders (I–Vt.), would thus bring about an explicit nationalization of health care financing and a tacit nationalization of health care delivery. This is not an incidental byproduct of single-payer health care, but the defining feature: Medicare for All is designed to give politicians and federal bureaucrats dramatically increased control over the nation's health care system. Republicans were mistaken to dub Obamacare a government takeover, but when it comes to single-payer, the description applies: Putting the federal government in charge is the heart of the plan.