It’s begun. We are having a debate over socialism.
Not over whether it’s fair to call Democrats socialists. Not over whether socialism has been good for Venezuela or some other faraway, unfortunate country. But socialist policies right here in the United States.
The press attention to a new study of the costs of “Medicare for all,” or universal health coverage paid for by the government that goes much further than Obamacare, is a sign that it is a live issue.
Popularized by Bernie Sanders, Medicare-for-all is not just a fringy left-wing talking point anymore. It’s a plank of a growing element of the Democratic Party. A raft of prospective Democratic presidential candidates has endorsed the policy, while about a third of the Democratic members of the House have joined a caucus devoted to it.
The good news for Sanders and Co. is that, in the wake of the failure of an attempted GOP repeal of Obamacare, the health care debate is clearly moving left. The bad news is that Medicare-for-all is still a completely batty, politically unserious idea.
The new study of its costs, from the conservative Mercatus Center, concludes that Medicare-for-all would increase federal spending by almost $33 trillion during the first 10 years. The study notes that “it would be less expensive to the federal government to triple all projected appropriations,” and that “doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”
Supporters of the idea impeached the credibility of the findings based on their source, yet a study by the centrist Urban Institute in 2016 found exactly the same thing.
The costs aren’t merely a theoretical matter. Vermont, the home of Bernie Sanders, abandoned a single-payer proposal after the Democratic governor concluded that it wasn’t fiscally sustainable. Despite its Democratic supermajorities, California gave up on a single-payer proposal last year for the same reason — the projected cost was twice as much as the state budget.
The upside is that Medicare-for-all purports to save on overall health care spending by ratcheting down payments to health care providers. Medicare does indeed pay less to hospitals than private insurers, but it’s not clear that this would be sustainable if hospitals could count on only Medicare-level payments.
Since Medicare-for-all would eliminate insurance premiums and provide health care free of charge, it would create an incentive for more usage, and more health care expenditures.
All of this is why the natural gravity in a single-payer system is toward brute-force price controls and rationing to control costs.
President Barack Obama had to promise that if you like your health care you can keep it because any change to private insurance is so toxic. Medicare-for-all would replace the employer-based system entirely for more than 150 million people. It wouldn’t matter how much they liked their insurance — it would be gone as a matter of definition.
Republicans need to continue to develop and push their own ideas to reduce health care costs and adjust to the new reality where socialism doesn’t simply represent a laugh line, but a battle that needs to be won.