It doesn’t seem likely that Senator Bernie Sanders will be our next president, but the current primary election campaign is throwing some pretty startling curveballs. With substantial popular support for one candidate with a fondness for the bankruptcy courts, and another who believes the pyramids were grain silos, a “democratic socialist” can’t be counted out.
In this world of the politically unexpected, Senator Sanders’ “Medicare for All” proposal for restructuring our healthcare system seems like something we should take seriously.
It’s a great slogan – a lot zippier than “Patient Protection and Affordable Care Act” — although the specifics are a little hazy. Senator Sanders has been promising since July to provide more details, but so far has provided only some tantalizing sound bites, like this one from his spokesman a week ago: “At a time when we are the only major country on earth that does not guarantee health care for all and when we spend far more per person that any other country, the time is long overdue for us to pass a Medicare for All, single-payer program. Medicare for All would save the average family thousands of dollars a year in health care costs…”
Most liberals would agree that one of the disappointments of the Affordable Care Act is its failure to assure universal coverage. We still have millions of uninsured and, with coverage increasingly expensive and deductibles skyrocketing, the number seems more likely to grow than decrease. In comparison, a totally tax-supported (as Senator Sanders has proposed in the past) Medicare for All model would bring the United States into line with other nations and protect millions from healthcare financial crises.
However, the claim that “single-payer… Medicare for All would save the average family thousands of dollars a year” is a lot more questionable.
While we can’t know what an undefined future single-payer program might really cost, we can look at comparisons between our existing single-payer traditional Medicare program and the alternative Medicare Advantage program. Unfortunately for Senator Sanders’ government-managed Medicare for All concept, it turns out that the much-maligned private sector insurers actually do a better job of controlling costs.
Two studies demonstrate this, one by the Congressional Budget Office, the other by the Kaiser Family Foundation. Both focused on premium support models in which there would be open competition between traditional Medicare and private plans. Both concluded that Medicare costs would be reduced in a “level playing field” model, in which the traditional program payments would be limited to competing private plan bids (and vice versa). Even more telling, the Kaiser study provided cost comparisons for the sixty most populous US counties. For some eighty percent of beneficiaries in these counties, private plans offered lower costs than traditional Medicare.
Senator Sanders’ proposal does have some merit. In addition to guaranteeing coverage, it’s a much simpler structure than what we have now, it would eliminate the “second-class” Medicaid program, and it would be a lot fairer to those with lower and middle incomes. It’s too bad that in proposing a totally government-managed system (one that’s all too vulnerable to industry lobbying), the senator’s socialist principles are overriding financial realities. If the senator were to look more closely at what does seem to work in Medicare, he might produce a healthcare proposal that more of us could get behind.
Roger Collier is the founder of the Campaign for a Rational Healthcare System (www.rational-healthcare.com). He was formerly CEO of a national healthcare consulting firm.