With Republican efforts to repeal and replace ObamaCare all but dead, Democrats appear to be ready to double down on plans for a government takeover of the American health care system. This week, Sen. Bernie Sanders introduced legislation calling for “Medicare for All,” a single-payer system that would put government firmly in charge. His proposal was backed by 17 senators — one-third of the Democratic caucus — including New York’s Kirsten Gillibrand.
Bernie’s plan is long on promises, with benefits far more generous than current Medicare, including dental and vision care. In fact, the benefits would be more generous than almost any national health care system anywhere, including Canada. And it would all be “free.” No deductibles, co-payments or out-of-pocket costs. What’s not to love?
Well, before buying this particular unicorn, there are a few things we should keep in mind.
Free health care is anything but free. BernieCare has not yet been scored by the Congressional Budget Office, but independent analysts suggest it will cost at least $1.4 trillion per year. That would be equal to 36 percent of our current federal budget.
To pay for all this, Sanders would impose a 7.5 percent hike in payroll taxes (bringing the total tax to nearly 23 percent), a 4 percent income tax increase on all Americans and additional tax hikes on corporations and “the rich.”
In fairness, BernieCare would replace some existing programs and Americans would save on what they currently spend on private health care. But even if BernieCare doesn’t end up costing more than estimated — when was the last time that a government program didn’t? — most Americans will be worse off.
Nor should we forget the impact of these tax hikes on job creation and economic growth. We’ve just barely dug our way out of the recession. That hardly seems like an opportune time to sock the economy with a nearly 43 percent tax hike.
Government-run means government-controlled. Under BernieCare, Uncle Sam would set prices for nearly all health care services. That includes telling doctors how much they can charge, setting budgets for hospitals — which would limit spending on new and advanced medical technology — and negotiating prescription drug prices.
Sanders expects price controls to reduce health care spending by at least $6 trillion over the next 10 years. But history has taught us that price controls inevitably lead to shortages.
Medicare and other government programs already under-reimburse providers, in some cases paying doctors less than the cost of treating a patient.
As a result, more and more physicians have been dropping out of the program. Roughly a quarter of primary-care doctors say they’re not accepting new Medicare patients.
Slashing reimbursements further will only exacerbate this problem. Yet making health care “free” to the patient will drive up the demand for care. Increased demand and diminished supply? Prepare to wait six months to see your doctor.
And don’t think you can opt out. Sanders’ plan would ban private insurance, either employer-sponsored or individual. If you don’t like what the government gives you .?.?. too bad.
Medicare isn’t the best model for health care. There’s no doubt it’s popular. Seniors love it. But part of that popularity stems from the fact that Medicare provides benefits it can’t afford. The program already faces close to $50 trillion in future unfunded liabilities. Expanding it seems akin to adding more passengers to the Titanic.
And going broke is hardly Medicare’s only flaw. A study in the Journal of the American Medical Association found that for 16 of 40 standard indicators, Medicare patients received recommended care less than two-thirds of the time. Other studies have shown that Medicare patients receive a lower quality of care than do similar patients with private insurance.
A study in the Journal of Health Services Research found that “Medicare coverage at age 65 for the previously uninsured is not linked to improvements in overall health status.” Similarly, a study by Amy Finkelstein and Robin McKnight for the National Bureau of Economic Research found that Medicare has had little effect on mortality rates among the elderly.
If we’re going to spend $1.4 trillion per year for a new health care program, shouldn’t we actually get better health care?
BernieCare isn’t going to pass anytime soon. Still, it’s notable that nearly every rumored candidate for the Democratic 2020 presidential nomination has signed on to this bill. With the party’s left-wing activist fringe increasingly driving the debate, support for government-run health care is rapidly becoming a litmus test for the party.
That means we could soon be faced with a test of whether American voters are so fed up with Republican dithering and incompetence that they’re willing to put Washington in charge of their health care.
Michael Tanner is a senior fellow at the Cato Institute.