Reminder: New Government-Controlled Health Insurance Systems Put American Families At Risk

MEMORANDUM

TO: Interested Parties
FROM: Lauren Crawford Shaver, The Partnership for America’s Health Care Future
RE: New Government-Controlled Health Insurance Systems Put American Families At Risk
DATE: February 3, 2020

Today, many Americans will look to Iowa as caucus-goers there decide the first contest of the 2020 presidential primary.  It is worth noting that, even with a majority of Iowans citing health care as the issue most important to their decision, the topic has been conspicuously absent from candidates’ closing arguments in the state. 

The New York Times took a close look at the candidates’ final Facebook advertisements and found that their messages overwhelmingly focus on other topics, such as “America’s place in the world … wages … [and] corruption in Washington.”  Likewise, the candidates have largely avoided health care in their recent television advertising, with the exception of a few messages about building and improving upon our current health care system, not starting over with a one-size-fits-all system.

Perhaps this should come as no surprise.  After all, when the proposed new government-controlled systems supported by many candidates face even the most basic scrutiny, their unaffordable costs and negative consequences quickly become clear.  And, regardless of tonight’s outcome, these facts will continue to drive the debate over America’s health care future.

Medicare for All would cause American families to pay more to wait longer for worse care as they are forced into a one-size-fits-all new government health insurance system controlled by politicians. 

Unaffordable Costs & Tax Hikes On American Families:

• Medicare For All would “require the equivalent of tripling payroll taxes or more than doubling all other taxes.” (Committee For A Responsible Federal Budget, 2/27/19)
• “Fully offsetting the cost,” of Medicare for All “would require higher taxes on the middle class.”(Committee For A Responsible Federal Budget, 10/22/19)
• Under Medicare for All “71% of households with private insurance would wind up paying more than they would under the current system.” (The Wall Street Journal, 10/17/19)
• Under Medicare for All, “federal spending on health care would increase by roughly $34 trillion.” (CNN, 10/16/19)
• “Government spending on health care would increase substantially under a single-payer system.” (Congressional Budget Office, 5/1/19)
• Medicare for All would eliminate 1.8 million American jobs. (POLITICO, 11/25/19)

Eliminating Consumer Choice & Control: 

• Medicare for All would mean 180 million Americans lose their employer-provided health coverage and force them into a one-size-fits-all system controlled by politicians. (Census Bureau, 9/12/18; Medicare for All Act (S.119), 4/10/19)
• “Under a single-payer system that eliminated private insurance entirely … patients would not have a choice of insurer or benefits, and those standardized benefits might not meet the needs of some people.  For example, certain specialty drugs or expensive new treatments, such as gene therapy, might not be covered under a single-payer system.” (Congressional Budget Office, 12/20/19)
• Under a one-size-fits-all government health insurance system, “participants would not have a choice of insurer or health benefits compared with the options available under the current system, the benefits provided by the public plan might not address the needs of some people.”  (Congressional Budget Office, 5/1/19)
• “Less spending on medical services could also alter manufacturers’ incentive to develop new technologies or providers’ incentive to invest in capital, which could affect patients’ choices over the longer term.” (Congressional Budget Office, 12/20/19)

Reducing Patients’ Access To Quality Care:

• Medicare for All could result in over 1.2 million fewer doctors and nurses, leading to less access and lower quality care for patients. (FTI Consulting, 1/13/20)
• According to the study, the reduction of physicians “would be felt most acutely in rural communities already experiencing access challenges … shortages of healthcare workers in rural areas widen existing health disparities and contribute to hospital closures,” serving 60 million Americans. (FTI Consulting, 1/13/20)
• Under a one-size-fits-all government health insurance system, “patients might face increased wait times and reduced access to care.” (Congressional Budget Office, 5/1/19)
• “Demand for care might be unmet,” under a one-size-fits-all government health insurance system.(Congressional Budget Office, 12/20/19)

New government-controlled health insurance systems – namely the public option and Medicare buy-in – are not “moderate” alternatives to Medicare for All and would ultimately lead to the same unaffordable consequences over time as Medicare for All would cause overnight.

Unaffordable Costs & Tax Hikes On American Families:

• The public option “could require tax increases on most Americans, including middle-income families” and could “add over $700 billion to the 10-year federal deficit, with dramatically larger losses in subsequent years.” (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• A politically realistic public option could lead to a new 4.8 percent payroll tax on American families over 30 years – far higher than the combined Medicare payroll tax Americans pay today. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• Over 30 years, the public option would become the third most expensive government program behind only Medicare and Social Security – both of which are at risk for the seniors who rely on them. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• The public option could add as much as $700 billion to the federal deficit in its first 10 years. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• While proponents try to claim the public option could reduce costs by reimbursing providers at Medicare rates, recent history at both the federal and state levels demonstrates that putting politicians in charge of a new government-controlled health insurance system could lead to higher costs and tax burdens for American families. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)

Eliminating Consumer Choice & Control:

• The public option could eliminate consumer choice for millions of Americans and “eventually cause the elimination of all private plans in the individual market.”  (FTI Consulting, 11/18/19)
• After the first 10 years of the public option, more than seven million Americans with private coverage would no longer have coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether.(FTI Consulting, 11/18/19)
• The study also warns that the public option could eventually cause the elimination of all private plans in the individual marketplaces, eliminating choice for millions of Americans, even those with the resources or subsidies available to cover their preferred plan. (FTI Consulting, 11/18/19)
• In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) would no longer offer a single private insurance option. (FTI Consulting, 11/18/19)
• Rural families would be especially hard hit by the public option, the study warns, and could find few if any options available to them. (FTI Consulting, 11/18/19) 

Reducing Patients’ Access To Quality Care:

• The public option could put more than 1,000 rural U.S. hospitals, serving more than 60 million Americans in 46 states, “at high risk of closure.” (Navigant, 8/7/19)
• “The rural hospitals at high risk represent more than 63,000 staffed beds and 420,000 employees.” (Navigant, 8/7/19)
• “The availability of a public option could negatively impact access to and quality of care through rural hospitals’ potential elimination of services and reduction of clinical and administrative staff, as well as damage the economic foundation of the communities these hospitals serve.” (Navigant, 8/7/19)
• “For hospitals, the introduction of a public plan that reimburses providers using Medicare rates would compound financial stresses they are already facing, potentially impacting access to care and provider quality.” (KNG Consulting, 3/12/19)

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