CBO on Medicare for All

By May 7, 2019 Commentary

You would think we would all have learned from our last foray into health care reform that enhancing government roles doesn’t make things any better.  The Congressional Budget Office gives its initial reaction to the single-payer proposals floating around under the name of Medicare for All.  It ain’t pretty.   (CBO Report)    The document is primarily intended to identify a range of alternatives for various issues relating to construction of a single-payer system.  Just reading this high-level summary, and being realistic about usual government performance, will give you a headache.  On page 3, in very understated terms, CBO acknowledges that any single-payer system would be a drastic change to the current health system, and as health care is currently one-sixth of our economy, those changes could significantly affect the economy.  How about destroy it would be more accurate.  They go on to note that such unprecedented change would be rife with unintended consequences–no one can predict how individuals, providers, health systems, would react.  How about the millions of people who would likely lose jobs if there are no private insurers.  And don’t tell me they would just move to the single-payer system, that is not what the bills contemplate, in fact proponents claim there will be all kinds of administrative savings precisely because those jobs go away.  There would be issues about the adequacy of supply of providers, partly because if you make care free demand will increase and partly because under the payments proposed by Medicare for All, we are going to lose providers.  So access will suffer and so will quality.  This is the most critical issue, and the one the public really needs to understand.  These proposals are absurdly expensive to begin with, but they become really out-of-site if you assume providers will retain the same income they receive today, which none of the Medicare for All proposals do.   Because costs for the single-payer system will be so high, government will inevitably, as it does in other single-payer countries, limit coverage for innovative, but expensive treatments.  That will really improve outcomes as well.  To me, it is insane that we are even having this discussion, but of course the people proposing it have no real-world economic experience, they are political hacks who failed at any non-government job they ever had, see, e.g. Bernie Sanders and his equally incompetent wife, who managed to bankrupt an educational institution, and of course, the infamous AOC, whose sole work experience is bartending.

We all need to remember that there is no such thing as government, it is a legal fiction like a corporation; there are only people who have jobs, some elected, most not.  Why, given all the lessons of history, do we ever want to give any individual that much power over any important activity of life, and certainly one like health care.

The most recent cost estimates for Medicare for All are at least $3 trillion a year and as high as $3.8 trillion.  Doubling all individual and corporate income taxes at the federal level wouldn’t pay for that cost.  When will we learn.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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