January 7, 2020 | Updates

Unaffordable Costs Of New Government Health Insurance Systems Take Center Stage

WASHINGTON – In the debate over America’s health care future, the unaffordable costs and higher taxes associated with new government-controlled health insurance systems – such as Medicare for All, Medicare buy-in and the public option – continue to take center stage.

For example, The Washington Post reported last week that “[Senator Bernie] Sanders has declined to specify how much it would cost to implement his Medicare-for-all plan.  ‘I don’t give a number and I’ll tell you why: It’s such a huge number and it’s so complicated that if I gave a number you and 50 other people would go through it and say, “Oh . . .”’ he said, his voice trailing off.”  

Medicare for All “would cost more than $50 trillion over 10 years,” Yahoo! Finance reports.  And a recent study from the Urban Institute finds “that federal spending on health care would increase by roughly $34 trillion under a single-payer plan similar to Medicare for All,” CNN reports.  The Committee for a Responsible Federal Budget (CRFB) finds that “fully offsetting the cost would require higher taxes on the middle class,” and would “require the equivalent of tripling payroll taxes or more than doubling all other taxes.”  Senator Sanders previously acknowledged that Americans making more than $29,000 per year would “pay more in taxes” for Medicare for All.

Meanwhile, as some try to paint other new government health insurance systems – like Medicare buy-in and the public option – as so-called “moderate” alternatives to Medicare for All, Eric Levitz at New York Magazine notes that in reality these new one-size-fits-all systems “would be vastly more expensive,” and would need “tax increases nearly as large as those put forward by Sanders and Warren.”

… To extend quality coverage to the millions of Americans who are uninsured or underinsured, you either need to force providers to accept drastically lower payment rates … or increase federal spending on health care … The estimated price tag on [Senator Bernie Sanders’s (I-VT)] plan is (infamously) $32.6 trillion a decade … A plan that sought to provide universal, comprehensive health coverage – without disrupting private insurers or imposing big pay cuts on hospitals and doctors – would be vastly more expensive … Biden’s [public option] will not allow most Americans to “keep their private insurance,” at least, not for long … And to make the public option fiscally sustainable … [public option supporters] would need to propose tax increasesnearly as large as those put forward by Sanders and Warren.

… All of which is to say, when Medicare for All Who Want It stops being a campaign pitch, and becomes a bill before Congress, it will face almost all of the same political obstacles as single-payer … [The public option] will require Congress to vote to (effectively) abolish the private insurance industry as we’ve known it, slash doctors’ salaries and hospitals profits, enact hefty tax increases, and disrupt the existing insurance coverage of millions of Americans.

An analysis by the American Action Forum (AAF), finds that a new government-controlled health insurance system known as Medicare Buy-in would cost an additional $184 billion that American families can’t afford.  Even worse, the new system would decrease access to doctors and health care providers by nine percent and would lead to a four percent decrease in medical productivity.

Economists agree that the public option would burden American families with unaffordable costs.  “The public option would cause premiums for private insurance to skyrocket,” economist Dr. Scott Atlas of Stanford University writes in The Wall Street Journal.  “A single-payer option is not a moderate, compromise proposal.  Its inevitable consequence is the death of affordable private insurance … Massive taxation would be needed to expand Medicare, whether optionally or not,” Atlas continues.




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