WU Political Review
Will Bernie’s Medicare For All Plan Really Help Americans? Ayelet Spertus
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he United States is facing a healthcare crisis. Our healthcare costs are some of the highest in the world, millions of Americans struggle to pay their expenses, and thousands die each year because they cannot get urgently needed services out of fear of costs. Senator Bernie Sanders, along with 14 co-sponsors, have introduced the Medicare for All Act of 2019 to mitigate the many problems in America’s healthcare system. The “M4A” bill offers innumerable benefits to Americans (as described in Conor’s article), but, like any plan, it does have its trade-offs. As politically active young adults who contribute to our nation’s political discourse, we have a responsibility to understand these trade-offs before we can make informed decisions. By examining this bill’s drawbacks, I am not prescribing an ultimate solution for the American healthcare crisis, nor am I attempting to smooth over the real problems that exist in our healthcare system. Instead, I will point out the flaws in Sanders’ plan and its political obstacles going forward, some of which may very well prevent the Medicare for All bill from ever becoming law. Problems with the M4A plan Like most other liberal Americans, I believe that some form of universal healthcare should be our ultimate goal, as no individual should have to choose between paying for healthcare and putting food on the table. However, in order to achieve this, it is crucial to determine how the costs of these services will be distributed. Healthcare currently costs between $3 and $3.5 trillion a year in the U.S., which is almost as large as the country’s $4 trillion budget. Right now, the majority of healthcare costs are being paid for in the private sector through private insurance plans (excluding Medicare and Medicaid), but under the Medicare for All bill, virtually all of these costs would be transferred onto the government, effectively doubling the US budget. Sanders has offered a relatively simple explanation for how this massive expenditure will be
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financed: raising taxes, closing tax loopholes for corporations and the wealthy, and lowering drug and administrative costs. However, the actual projected cost of M4A varies wildly depending on the ability of the government to achieve cost savings, which means that no one will know the true economic impact of M4A on American households until it is already implemented. As such, it is impossible to project the likelihood of Sanders' tax plan fully covering all of its costs. Even if the math does work out, there are still a number of things that need to be noted. Taxes on every American would go up, and for many they would go up significantly. Proponents of M4A make the argument that the average tax increase will be less than the average savings in healthcare costs. While this seems to be true, there are two often overlooked considerations: First, it is projected that the average American will save more in healthcare than their taxes increase, but no one is the average American. While many tens or hundreds of millions of Americans will become better off, many tens or hundreds of millions of Americans will become worse off. Given the sheer magnitude of people in the losing group, the political implications here are enormous. Even if a majority of voters support a bill (which isn’t the case with M4A in the first place), it is politically untenable to pass anything with such active opposition from such a large group, even if they are in a slight minority.
There is no nation on earth with universal healthcare that doesn’t offer private insurance alongside it in some form.
Representatives are hesitant to vote for bills that threaten their reelection, which would be the case in large swaths of the country. As for the plan itself, it is unclear in the bill whether individuals will be allowed to purchase supplemental coverage through private contractors, but Sanders has made it clear publicly that he plans to abolish the private insurance industry. Under the current Medicare system, Americans have the option to pay an additional premium to cover co-pays and other fees that may arise, as well as the option to purchase supplemental higher quality coverage through Medicare Advantage plans. More than onethird of all Medicare beneficiaries receive coverage through these plans. These plans have been overwhelmingly popular. In fact, 90% of Medicare Advantage enrollees are happy with their plans, and only 2% think that their traditional Medicare coverage is better. This is hardly surprising, as private insurers virtually always offer higher quality care than government-run programs because “choice increases competition, and competition drives up value”. It follows that abolishing private insurance means Americans will no longer have access to private insurers for these supplemental plans. Freedom of choice matters to Americans, and the polling supports this, as I will show later on. Additionally, having the option to purchase supplemental insurance especially benefits those with complex or chronic conditions who must frequently see multiple specialists. Because Medicare pays specialists much less than private insurance does (typically around 30 cents on the dollar), most highly specialized doctors often do not take Medicare. Instead, they usually only accept Medicare Advantage Plans. According to experts at the Healthcare Leadership Council, “Medicare Advantage Plans provide a level of care for special needs patients with chronic health conditions that conventional fee-for-service Medicare can’t match”. If these
