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| AEIdeas
The Peter Peterson Foundation reminded us on Tuesday that America’s fiscal outlook has worsened, with the 2016 deficit expected to climb to $544 billion–$105 billion more than last year. Over the next decade, budget deficits will total $9.4 trillion, with interest costs alone totaling $5.8 trillion. Imagine what would happen if Bernie Sanders, with his $28 trillion health plan, were elected.
That’s the additional federal spending necessary to finance Sanders’ “Medicare for All” plan, but only if his plan saves $6.3 trillion over the next decade. All this is spelled out in a memorandum written by Gerald Friedman, a professor at the University of Massachusetts. Extrapolating from the Centers for Medicare and Medicaid Services’ (CMS) projections of national health spending, Friedman claims that the Sanders plan would cost $40.9 trillion between 2017 and 2026. That includes $6.3 trillion in savings from the single payer program. It also assumes that out-of-pocket spending would decrease by an additional $153 billion because some services would be deemed not medically necessary, and thus not covered by the national health plan.
Democratic presidential candidate Bernie Sanders steps off his campaign bus as he arrives at a campaign event in Fort Dodge, Iowa, United States, January 19, 2016. REUTERS/Jim Young.
If we take those numbers at face value, the Sanders plan would reduce the average growth of national health spending well below historical rates. According to the CMS actuaries, health spending grew 3.6% in 2013, the slowest one-year rate in the 56 year history of the national health accounts. However, health spending is beginning to pick up with the improving economy, increasing by 5.5% in 2014. Sanders assumes an unprecedented slowdown in health spending, averaging about 3.3% a year over the next decade.
This is all the more unbelievable because the Sanders plans appears to fling open the doors to the Treasury. “Medicare for All” is far more generous than Medicare or private health plans. It would eliminate all cost-sharing requirements, making all services free to the patient. With no out-of-pocket costs, patients will no longer question the value of an additional test or office visit, which would bend the cost curve the wrong way. Sanders would also cover all of Medicare’s benefits plus vision, hearing, and dental care, as well as long-term and palliative care. If his plan is really as generous as claimed, health spending would skyrocket.
Bernie Sanders deserves credit for one-upping Barack Obama. The President claimed to give everyone affordable coverage and save families $2,500. Sanders says he’ll give everyone unlimited access to every provider in the country and all conceivable health services that are provided now or will be invented in the future — saving middle-class families $5,807. Don’t expect to spend that money any time soon.
The health care nirvana outlined by Sanders will never happen. If he was able to enact his plan, the only way to make the finances work is to cut payments to every doctor and hospital in the country. That would drive people away from the medical profession, and the flow of new cures would dry up. Patients would face long waits for appointments, with bribes necessary to move closer to the head of the line. Officially health care costs would be reduced compared to the current trend, but only because health care would be increasingly unavailable. That’s not Medicare for all. That’s a broken VA health system for all.
Why you dont say how much are we paying right now? What if we pay half of that?
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Single payer health care will save taxpayers about $500 billion per year even including the initial costs to train more doctors and nurses. It’s essentially, in the long run, a self-sufficient program based on a payroll tax.
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No it isn’t – in any run it’s an entitlement ponzi scheme like all the others.
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Prove it
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wanna’ know what will bankrupt the country (besides the stunt wall street pulled in 2008 that stole ~5 Trillion)??
the Forbes 400 richest Americans whose net worth totals ~2.2 Trillion. one Trillion seconds is ~31,546 years. Post that reality in our Fading Democratic Republic.
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Out of curiosity, if investors doubted the long term solubility of the US government why are 10 year T notes up?
Seems to me that the mind of the market believes more in the 10 year solubility of the treasury than the stock market. Also I would imagine that if the public were to have more purchasing power it would lead to more goods and services being purchased which I would imagine would bouy the economy.
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Because too many people believe in unicorns and politicians.
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What do you have against Unicorns to associate them with politicians?
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Another BS Hillary pro article. Dont leave out details so people don’t call you out on your BS.
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Even the NY Times called out Bernie Sanders for his healthcare plan’s inability to pay for itself.
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According to organization founded by former Lehman Bros. chairman and CEO.
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Why do we expect to be provided for by the government. I have never expected the government to provide health care – I have made sure that I have made appropriate choices that allow me to purchase my own health care for myself and my family. It is only since the promise of ‘Universal Health Care’ that this has proven to be more and more difficult and expensive to do. The government should stay out of my business.
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You are right that a single payer system doesn’t curtail costs. But that is only if it continues on the basis of fee for service, which allows for all of the gaming that leads to the expense. If everyone in the system is on a salary you can control the costs, but you lose the innovation.
Singapore’s model is best (according to Bloomberg) at the system level and at the health of the population; they are worth emulating. It is based on tax exempt HSAs (actually more since they can use the funds to pay for other socially beneficial things like education and home) and a “VA system” to which everyone belongs. Singaporeans pay less than 5% of their GDP for healthcare. We pay about 17%. That is a gap of 12 % and 12% of 17T is about 2 T dollars. That should make one think!!
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How can an article, subsumed mainly with reasonable facts and statistics, conclude with such faux-apocalyptic forecasts? The death of the health care industry? Cures drying up? This sounds like the hucksterism of a politico, not the journalings of a rational-minded reseacher. I had heard this was a non-partisan organization. Disappointed to see this is not the case.
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How is it that other developed countries have the equivalent of “Medicare for All” and their treasuries are not bankrupt? But for the greed of insurance companies not covering pre-existing conditions and the like, we probably would not have ACA. And remember ACA is a Republican plan hatched by the Heritage Foundation and used first here in Massachusetts by Governor Romney. The ACA is Romneycare x 50. People in Massachusetts are, for the most part, covered by Romneycare and the insurance companies are laughing all the way to the bank. They are doing likewise under the ACA. So why do Republicans bash ACA -except that it came under Obama. My fear is that the ACA will set back efforts for Medicare for All for decades. Sincerely, Alan Jay Rom
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