Of Course, Medicare For All Increases Federal Spending…

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But it would lower the total cost of health care

recent report by the Koch Brothers-funded Mercatus Center at George Mason University found that moving to a National Improved Medicare for All single payer healthcare system would increase federal spending. They analyzed Senator Sanders’ Medicare for All Act and estimated it would increase annual federal spending by $32 trillion over ten years. Don’t let their attempt to weaken the strong support for single payer healthcare in the US fool you. Even though their report underestimates the savings, they admit that single payer would lower the total cost of health care.

Of course, a National Improved Medicare for All (NIMA) system would increase federal spending, but not by as much as they claim. NIMA would create a national health insurance, like most other wealthy countries have, funded only through taxes. This would replace our current complicated, privatized healthcare system, funded through a mix of premiums, out-of-pocket costs and taxes, which is the most expensive in the world.Countries that treat health care as a public good invest in a universal system because they know it improves the health of their people and is the most efficient.

The United States currently spends twice as much as the average wealthy nation, over $10,000 per person each year. Unlike other wealthy nations though, the US leaves tens of millions of people without coverage and tens of millions more with coverage but still unable to afford care. The US consistently ranks low in comparison to other countries on health outcomes. Life expectancy is declining in the US, now for two years in a row, the first time this has happened in over 50 years. Death rates for infants and mothers in the US are many times higher than in other wealthy countries.

A single payer healthcare system like NIMA would decrease administrative costs and the prices of goods, such as pharmaceuticals, and services dramatically. Rather than having hundreds of different healthcare plans, each with different rules, there is one comprehensive plan with one set of rules. It would relieve families, employers, health professionals and hospitals of the burden of navigating the current complex system. Everyone is in the system for life. If a person needs health care, they see a health professional of their choice, the health professional cares for the patient and submits a bill to the system, or they are paid a salary, and that’s it. Simple. Just as it is in most other industrialized countries.

The Mercatus Center study is flawed in serious ways. First, it analyzes the Senate bill, which was first introduced last September and has significant weaknesses. It would be better to examine the House bill, HR 676, which has been introduced every session since 2003 and is based on the Physicians’ Working Group Proposal by Physicians for a National Health Program, the leading experts on single payer health policy in the US (here is the updated proposal). Second, it grossly underestimates the savings of a single payer system and makes unrealistic assumptions about utilization of services.

There have been many studies over the past few decades on how much money a single payer system would save in the United States. In 1991, the General Accounting Office found “If the US were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs [10 percent of health spending] would be more than enough to offset the expense of universal coverage.” Since that time, administrative costs have ballooned to one-third of our healthcare spending and the prices of pharmaceuticals have soared, so the savings would be greater.

In 1991 and 1993, multiple analyses by the Congressional Budget Office found that covering everyone under a single payer system might increase spending at the beginning, but it would be offset quickly by the savings. Since then, studies by non-governmental institutions, including one by Ken Thorpe who, since his alliance with Hillary Clinton, now claims the opposite, have all shown that compared to other reforms, NIMA is superior in savings and in the number of people and benefits that are covered.

It is important to distinguish between total healthcare spending and federal spending, the part the US government spends. Buried within the Mercatus Center study is a fact that the corporate media has missed. Although they estimate that federal spending would increase, because all health spending would become federal, they calculate that overall health spending would decrease by more than $2 trillion over ten years.

Single payer systems save money. The only system we can’t afford to maintain is the current one. Private health insurers are insatiable. The government subsidizes them by hundreds of billions of dollars a year, and still they raise premiums and out-of-pocket costs and ask for more. Pharmaceutical companies are increasing their prices by as much as they can get away with. A single payer system is the best way to put private insurers where they belong, on the margins of our healthcare system, and to control the pharmaceutical industry.

So, when you hear someone saying that NIMA would increase federal spending, tell them of course it does, that’s the point. Instead of paying premiums, deductibles and co-pays to a private insurer, we all contribute into a federal system that is there when we need it. But if they try to scare you with large numbers, tell them that single payer systems prove time and again they are the least expensive. If we want to talk about scary numbers, let’s look at how much the US spends on the military and have a conversation about priorities – ending lives or saving them.

  • F.D. Stephenson, LCSW, BCD

    Conservative/Libertarian economist Charles Blahous of the Mercatus Center, George Mason University, states that Bernie Sanders ‘Medicare for All’ plan is projected to cost $32.6 trillion. The most important finding in Blahous’ new analysis is data for the total amount of national health expenditures (NHE). His report says,”aggregate health expenditures remain virtually unchanged: national personal healthcare costs decrease by less than 2 percent, while total health expenditures decrease by only 4 percent. The essential expenditure change wrought by movement to a single-payer system would be to replace private (health insurance companies) spending on healthcare with government spending financed by taxpayers. At the same time, more generous healthcare insurance would be provided to everyone.”

    This means that the report is not claiming that total, Medicare for All, national health expenditures will increase when compared to current projections, but only that much of our current private insurance spending will shift to government-administered Medicare for All along with the important benefit that everyone would be covered by a comprehensive program. Charles Blahous documents that Medicare for All will not increase our spending while finally giving everyone a much more generous health insurance program. Independents, Republicans, Democrats all need to hear this conclusion.

  • dopfa

    The US have to revamp its sickness care system into a true healthcare system, starting with breastfeeding its children for at least the first year of life. Chemical formula is NOT healthy for babies no matter what their corporate owners claim.

    The US feeds its kids absolute garbage and puts tens of thousands of chemicals in their environment, (including the 48 toxins they inject directly into their little bodies by the time they’re two), creating totally preventable diseases like diabetes, cancer, and auto-immune diseases of epidemic proportions.
    If America is serious about a real healthcare system, we would shift the billions of tax dollars in subsidies from genetically modified High Fructose Corn Syrup growers/producers, to local, organic farms and industrial hemp farms instead. Hempseed is the most nutritious food on the planet, and just putting it into school lunches on a daily basis would improve the health of children dramatically. It’s nauseating to work in a school and see what kids are being fed! School breakfasts consist of a pastry, or a petrol-plastic cup full of generic frosted flakes or fruit loops with non-fat, HFCS-laden chocolate milk poured over it. Lunches include garbage from government surplus programs with little thought about what that toxic crap does to growing bodies. But since our capitalist system makes BILLIONS on illness, there is little incentive for real health, and every incentive to make kids as sick as possible. Billions are spent “finding a cure,” but never “finding the CAUSE,” which IS THE CURE!

    If the US was serious about true health, it would never allow mass marketing of garbage food to children, but capitalism dictates that the market be free to poison as many people as possible for the profit of themselves and the pharmaceutical industry, another bastion of profit from poison. Just listen to the LONG lists of side effects in drug ads. They’re insane and have NOTHING to do with health and everything to do with snake oil. The medical industry is the third largest killer in America.

    So,”How ya gonna pay for that?!” Well, according the the National Priorities Project, the US Government spends 32 BILLION TAX DOLLARS AN HOUR ON WAR!!! One million dollars an hour is $8,760,000,000 a year. If the war-mongering government would stop spending so much on killing people, whether with pseudo-food, toxic fuel extraction/burning, or bombs, we’d have a lot more to spend on green energy programs that would prevent the whole world from dying from another totally preventable disease – global climate change. Sing along! “Thirty-two million an hour for war! Thirty-two million an hour! Take one down, pass it around, thirty-one million an hour for war!” Pass it down from warfare to healthcare, from bombs to books, from drones to solar panels, from tanks to industrial hemp farms, from warships to plastic-cleaning vessels for our dying oceans, from nearly a thousand military bases around the world to local, organic farms, etc., etc., etc..

    The US Government ALWAYS has money to kill, but never enough to heal, because killing is so much more lucrative.

  • Mark Fabian

    The article states. “NIMA would create a national health insurance, like most other wealthy countries have, funded only through taxes.” This is functionally wrong. The Federal Govt is not funded by the private sector. Logically, how would this be possible since the US Govt, as the monopoly issuer of the US dollar, must first spend the dollar into existence , therefore the economy, before we can earn the dollars necessary to pay our tax obligation? This false notion spouted by politicians and paid pundits is the single reason (my humble opinion, of course) that we have seen no meaningful progressive programs over the past five decades, and have shrugged our shoulders as cuts to social safety nets were put on “the table.” The belief of “taxpayer’s dollars” to pay for Federal spending only supports the false idea that there are limited numbers of dollars available to spend. That lie justifies cutting social services and denying progressive plans as “unaffordable.” As Alan Greenspan famously replied to then Rep. Paul Ryan, “There is nothing to prevent the government from creating as much money as it wants, and paying it to somebody.” The availability of real resources are limited, not the ability of the Federal Government to create its own sovereign currency.


  • Alan MacDonald

    Margaret, Paul Krugman recently wrote a column in the “Times”, titled, “Notes on a Butter Republic” 8/5, and which supports and comports with your article here, that essentially ‘costs (and/or taxes) may well rise’, but that the overall economic value for ‘we the people’ is better:

    I’d link his column, but that creates problems on Popular Resistance, so if it sounds interesting, you can access it from the “Times”.

    Here’s a clip of his salient point in copied text (hope I’m not violating my subscription terms):

    “The non-horrors of “socialism”

    number of people on the U.S. right, and some self-proclaimed centrists,
    seem totally taken aback by the rise of politicians who call themselves
    socialist. But this rise was predictable and predicted.

    what happened: for decades the right has tried to shout down any
    attempt to sand down some of the rough edges of capitalism, whether
    through health guarantees, income supports, or anything else, by yelling
    “socialism.” Sooner or later people were bound to say that if any
    attempt to make our system less harsh is socialism, well, they’re

    The truth is that there
    are hardly any people in the U.S. who want the government to seize the
    means of production, or even the economy’s commanding heights. What they
    want is social democracy – the kinds of basic guarantees of health
    care, protection against poverty, etc., that almost every other advanced
    country provides.

    Denmark, where tax receipts are 46 percent of GDP
    compared with 26 percent in the U.S., is arguably the most
    social-democratic country in the world. According to conservative
    doctrine, the combination of high taxes and aid to “takers” must really
    destroy incentives both to create jobs and to take them in any case. So
    Denmark must suffer from mass unemployment, right?

    Yep, Danish adults are more likely to be
    employed than their U.S. counterparts. They work somewhat shorter
    hours, although that may well be a welfare-improving choice. But what
    Denmark shows is that you can run a welfare state far more generous than
    we do – beyond the wildest dreams of U.S. progressives – and still have
    a highly successful economy.

    Indeed, while GDP per capita in Denmark is lower than in the U.S. – basically because of shorter work hours – life satisfaction is notably higher.”

    And here’s my comment on the “Times” to Paul’s column:

    Alan MacDonald | Wells, Maine
    Alt-title: “Notes on Slipping on Butter into Empire”

    Paul, you can’t win your argument without explaining the seminal cancer of ‘negative externality cost dumping’ to average young Americans — which, BTW, is the most valuable thing you could do in your position at the “Times” and during, as Dylan sang, “these ‘Times’ they are a changin”.

    Though-out history, from Moses leading his people out of the Egyptian Empire, to Christ overcoming the Roman Empire with love, the Spanish, British, French, Nazi, Japanese, and supposedly last one, the Soviet “Evil Empire” (aren’t they all, Ronnie?) — Empires always collapse.

    But without ‘we the American people’ becoming aware, more informed, ‘woke’, educated (by you), and understanding the metastasizing cancer of global ‘negative externality cost dumping’, then ‘we the people’ can’t be blamed for falling for Emperor Trump’s biggest lie — that our leader (‘Fuhrer’ in German) can, by acting like an Emperor, and promising to “Make America Great Again” only be lying that the biggest Empire can be “winning” — when the reality is that this first attempt to build a truly Disguised Global Capitalist Empire will turn-out very badly not only for every American, but also for every citizen of our world.