The Seductive Lure of Medicare For All

=========
=========
Promoted from the diaries by streiff. Promotion does not imply endorsement.
=========
=========

In 2009, President Obama said regarding healthcare reform, “I am not the first president to take up this cause, but I am determined to be the last.”  The result was the passage of a behemoth of a law called Obamacare that passed on purely partisan lines and through parliamentary sleight of hand.  Since then, healthcare expenditures have increased over $1 trillion.  According to the Center for Medicare and Medicaid Services, the $3.8 trillion expended annually rises to $5.6 trillion by 2025.

Obamacare was to be the cure all for America’s healthcare woes.  Those with pre-existing conditions would be covered, more people would have access to quality care, and the list of promises went on.  Today, the Democratic Party still clings to Obama’s signature legislative agenda as if it is the gold standard for achieving success.  To the extent they ever criticize the law, it is a desire to “fix” what is wrong, not scrap the law.

So, if Obamacare is so great and so worthy of keeping, why is the Democratic Party, led by Bernie Sanders, now insisting on Medicare for All?  The fact they entertain such an idea is proof that even they admit (without saying so) that Obamacare is a failure.   Senators who voted for Obamacare are now co-sponsors of the Sanders bill.

So what does the Sanders bill include?  Even if you do not take advantage of the abortion services, a stint in drug rehabilitation, or a psychiatric visit, you still pay for those who do.  You even get an annual teeth cleaning and eyeglasses out of the deal- things normally covered in so-called Cadillac plans.  There are no deductibles, no co-pays and no premiums.  In effect, Obama’s Affordable Care Act becomes Bernie’s Free Care Act on steroids (which are probably covered also).

That is the lure of the plan: everything under the sun in healthcare is free.  It is Christmas every day.  Except as every responsible adult knows, Christmas every day is a great recipe for bankruptcy.  The bill further makes it unlawful for a private insurer to duplicate any coverage under the act, or to offer such plans to former or current employees if the employer offers insurance at all.  In other words, screw all competition.

Everything offered by Bernie’s plan- coverage of just about everything, scuttling competition and elimination of out-of-pocket expenses- also eliminates the very things that serve to keep health care costs down.  Hence, it is no surprise that most analysis of this concept indicates it would cost an additional, at a minimum, $3 trillion.  For a nation $21 trillion in debt now, that seems hardly prudent.

The “Medicare for all” tag line is seductive because of the popularity of Medicare among senior citizens.  But traditional Medicare is not a pure single-payer system since many rely on private insurance to fill in crucial gaps, nor is it without its own problems.  Perhaps the only good part of the bill is that it would possibly decrease administrative costs- the source of trouble that essentially doubles the cost of healthcare compared to costs in Canada.  But, couldn’t that be achieved with stand alone legislation?  Has anyone tried?

Thus far, two states have attempted something akin to Bernie’s proposal and they have both failed.  In 2014, Vermont attempted “Green Mountain Care” which would have instituted an 11.5% payroll tax plus premiums and the plan quickly died.  In 2017, Colorado also proposed a 10% payroll tax for a plan that would have run a projected $253 million deficit in its first year.  When put up for a vote, the good citizens of Colorado soundly defeated the proposal.

Not to be deterred, California is attempting their own version of Berniecare which would extend to illegal aliens, eliminate deductibles and co-pays, and cover a variety of things, much like Bernie’s federal proposal.  To keep costs down, a Board would be appointed to negotiate doctor and hospital rates.  In short, eliminating the front-ended consumer “skin in the game” measures all but ensures higher costs on the back end.  In FY 2017-2018, the entire California budget was $183 billion.  This proposal alone is estimated to cost $330-400 billion annually.  The state proposes a 15% payroll tax to raise half that amount with the other half coming from the federal government.  With a tax hike like that, it will only exacerbate the migration of Californians out of the state.

California believes their plan “does healthcare right.”  But, in the end it is really no different than the failures of Vermont and Colorado.  California, like any state, is free to experiment as they wish, but when the system they create eventually crashes and burns federal taxpayers should not be the panacea to bail out their whim.  Congress can act to make sure this does not happen.

It is one thing for a state “Medicare for all” plan to fail.  But if Bernie and company ever got their way on the federal level, every taxpayer would be on the hook, not just those of California.  It is a huge risk the country cannot take despite the allure of something “free.”