Brooks: The impossible 'Medicare for all'

Brooks: The impossible 'Medicare for all'

March 6th, 2019 by David Brooks / The New York Times in Opinion Free Press Commentary

The Brits and Canadians I know certainly love their single-payer health care systems. If one of their politicians suggested they should switch to the American health care model, they'd throw him out the window.

So single-payer health care, or in our case "Medicare for all," is worth taking seriously. I have just never understood how we get from here to there, how we transition from our current system to the one Bernie Sanders has proposed and Elizabeth Warren, Kamala Harris and others have endorsed.

Despite differences between individual proposals, the broad outlines of Medicare for all are easy to grasp. We would take the money we're spending on private health insurance and private health care, and we would shift it over to the federal government through higher taxes in some form.

Then, since health care would be a public monopoly, the government could set prices and force health care providers to accept current Medicare payment rates. Medicare reimburses hospitals at 87 percent of costs while private insurance reimburses at 145 percent of costs. Charles Blahous, a former Social Security and Medicare public trustee, estimates that under the Sanders plan, the government could pay about 40 percent less than what private insurers now pay for treatments.

If this version of Medicare for all worked as planned, everybody would be insured, health care usage would rise sharply because it would be free, without even a co-payment, and America would spend less overall on health care.

It sounds good. But the trick is in the transition.

First, patients would have to transition. Right now, roughly 181 million Americans receive health insurance through employers. About 70 percent of these people say they are happy with their coverage. Proponents of Medicare for all are saying: We're going to take away the insurance you have and are happy with, and we're going to replace it with a new system you haven't experienced yet because, trust us, we're the federal government!

The insurance companies would have to transition. Lots of people work for and serve this industry. All-inclusive public health care would destroy this industry beyond recognition, and those people would have to find other work.

Hospitals would have to transition. In many small cities the local health care system is the biggest employer.

If you live in a place where the health system is a big employer, think what happens when that sector takes a sudden, huge pay cut. The ripple effects would be immediate.

Doctors would have to transition. Salary losses would differ by specialty, but imagine you came out of med school saddled with debt and learn that your payments are going to be down by, say 30 percent. Similar shocks would ripple to other health care workers.

The American people would have to transition. Americans are more decentralized, diverse and individualistic than people in the nations with single-payer systems. They are more suspicious of centralized government and tend to dislike higher taxes.

The Sanders plan would increase federal spending by about $32.6 trillion over its first 10 years, according to a Mercatus Center study that Blahous led. Compare that with the Congressional Budget Office's projection for the entire 2019 fiscal year budget, $4.4 trillion. That kind of sticker shock is why a plan for single-payer in Vermont collapsed in 2014 and why Colorado voters overwhelmingly rejected one in 2016. It's why legislators in California killed one. In this plan, the taxes are upfront, the purported savings are down the line.

Once they learn that Medicare for all would eliminate private insurance and raise taxes, only 37 percent of Americans support it, according to a Kaiser Family Foundation survey.

The government would also have to transition. Medicare for all works only if politicians ruthlessly enforce those spending cuts. But in our system of government, members of Congress are terrible at fiscal discipline. They are quick to cater to special interest groups, terrible at saying no.

If America were a blank slate, Medicare for all would be a plausible policy, but we are not a blank slate. At this point, the easiest way to get to a single-payer system would probably be to go back to 1776 and undo that whole American Revolution thing.

The New York Times

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