The WasteWatcher: The Staff Blog of Citizens Against Government Waste

The #M4A Price Tag Makes it DOA

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Continuing with Senate Minority Leader Chuck Schumer’s declaration that August should be healthcare month, Citizens Against Government Waste (CAGW) is taking a look at Senator Bernie Sander’s (I-Vt) idea that we should have Medicare for All, colloquially being referred to as #M4A on Twitter and in other social media.  Aggressively promoting this new Faustian bargain are the Democratic Socialists, a quickly growing faction within the Democrat party.  Their chapters across the country are planning to have a weekend of action on August 11 and 12, promoting the idea.  And many of the same people who promised Obamacare would lower premiums by an average of $2,500 a year are now promising this wonderful plan will solve everything.  Do not believe it.

M4A creates a federally administered, fully integrated, single-payer healthcare system and adopts Medicare’s payment systems.  There would be no private health insurance.  Sanders claims his new plan would have no co-pays, deductibles, and M4A would cover “the entire continuum of healthcare.”  Just show your health card to your doctor, and voila!  Free healthcare!

So, who would pay for all this “free” stuff?  You would pay for it, as well as employers, and the perpetual target of the left, “the rich,” through high taxation.  Sen. Sanders claims his plan will only cost $1.38 trillion per year.  Ultimately, it will cost a lot more.

It is important to remember the Medicare Trustees have stated in their 2018 annual report that the existing Medicare program is scheduled to go broke in 2026, three years earlier than their last report, based on current law and trends.

Charles Blahous, a senior research specialist at George Mason University’s Mercatus Center released a study on July 31, 2018, “The Costs of a National Single-Payer Healthcare System.” Mr. Blahous, a former Medicare trustee, argues that if Senator Sanders’ plan was enacted in 2018, and based on conservative estimates, M4A would add approximately $32.6 trillion to federal spending commitments during the first ten years of its implementation (2022-2031) and would “place unprecedented strain on the federal budget.”  His study projected that the “increase in federal healthcare commitments would equal approximately 10.7 percent of GDP in 2022.  This amount would rise to nearly 12.7 percent of GDP in 2031 and continue to rise thereafter.”

Blahous argues his estimates are conservative because his analysis assumes the legislation will succeed in significantly lowering provider payments for doctors, hospitals, and others by using Medicare rates, a cut of about 40 percent, as well as reduce drug and administrative costs.  But, even if projected individual and corporate taxes were doubled, there would not be enough money to pay for the M4A plan.

What could be the result of such drastic provider cuts?  For one, consider the amount of money and time it takes to become a doctor.  You could expect a shortage of them within a generation if those lower rates should hold. Doctors already limit their number of Medicare patients, as well as those in Medicaid, because of the low reimbursement rates.

Ironically, Senator Sanders and others that support a single-payer system thought the Mercatus study’s figures proved their case for M4A because it would reduce health expenditures by $2 billion.  They continue to think that somehow, the U.S. will be able to accomplish something no other country has been able to do without rationing or price controls, which always disrupt supply and demand, cause shortages, and destroy innovation.

If the U.S. should adopt a single-payer system, services will be overused, and costs will go up, just as has happened elsewhere.  Pacific Research President Sally Pipes, a healthcare policy expert, stated in a March 19, 2018 op-ed, “Since the government would be unable to limit demand for care, it would only have one way to control costs – and that's to limit the supply of care.  Single-payer systems do so by providing cut-rate payments to doctors and hospitals.  That discourages people from entering the medical profession, building new clinics and health facilities, and generally logging enough hours to provide all the care that patients would like to demand.”

For example, in England, the National Health Services utilizes the National Institute for Health and Care Excellence, with the paradoxical acronym NICE, to decide what drugs and treatments that doctors can prescribe.  As a result, patients are often denied some of the most advance care.  In Canada, the Fraser Institute annually releases reports on the perpetual wait times Canadians must endure to see a specialist, get an MRI, have orthopedic surgery, and so forth.

Continuing to ignore history and the systemic problems other single-payer systems have, Democratic Socialists Benjamin Fong and Dustin Guastella discuss in a July 5, 2018 blog, “The U.K. Created a Health Care System to End Class Privilege. America Must do the Same,” how important it is for our nation to move to a government system.  They state doing so will “be a movement not of charity but of solidarity, where the great mass of people who do most of the living, breathing, loving and dying in this society band together and take aim at a parasitic social layer of bureaucrats and billionaires.”  Leninist and Stalinist rhetoric at its best!

Within their blog is a photo of “junior doctors,” which make up almost half of the doctors in the U.K., on strike for better wages.  While the authors want to blame conservative members of Parliament for the lack of NHS funds, in reality lack of funds is nothing new for the NHS, or any single-payer system.  England’s public health spending is at the highest percentage of gross domestic product it has ever been.

If we should be foolish enough to implement a single-payer healthcare system, Congress, the president, and a Washington, D.C. government bureaucracy would oversee your most precious asset: your life.  One would hope after seeing how England’s healthcare system treated the parents of Charlie Gard and Alfie Evans, two young boys who died after bitter battles over their medical care, Americans would run fast from a single-payer system.  England’s administrative state oversaw the children’s welfare, not the parents.

Does this mean our system was perfect prior to Obamacare?  Certainly not.  There were problems that needed to be addressed but, reforms could have been achieved without the disruption Obamacare caused for millions of Americans.

Nevertheless, free-market and patient-centered healthcare policy wonks, including fiscal conservative groups like CAGW, have not given up on ridding us of Obamacare.  In fact, action is underway designing a plan that would return spending and regulatory power back to the states and the individual.  The plan, called the Health Care Choices Proposal, would allow Americans to get the healthcare they want and need without massive, Washington, D.C. centralized government interference.  Stay tuned.

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