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New study ignites debate over cost of 'Medicare for all'

02 August 2018

Since the federal government takes on almost all health spending under Medicare for All, federal health expenditures will necessarily go up a lot, $32.6 trillion over the ten-year period according to Blahous.

The latest plan from the Vermont independent would require historic tax increases as government replaces what employers and consumers now pay for healthcare, according to the analysis being released Monday by the Mercatus Center at George Mason University in Virginia. "But over the long run, the Sanders people are very correct that you could implement a system like this that would be more disciplined, more economical and more fair than the current US health system". Bernie Sanders' single-payer plan would add trillions to government books, by placing all Americans on one government health insurer.

Moreover, the fact that a conservative institute drew conclusions about the plan's savings is a testament to the Medicare-for-All's efficiency, according to Miller-Lewis. Fox News raised the alarms, warning that the "Democrats "Medicare for all" socialist scheme would run up a staggering tab for all taxpayers".

Still, there are some who agree with the apprehension in Blahous' study and one of them is House Speaker Paul Ryan. In the first year, the federal government would drop the Medicare eligibility age from 65 to 55 - a proposal also backed by many centrist Senate Democrats - as well as enrolling everyone now on Medicare and everyone younger than 18.

After taking into account current government healthcare financing, the study estimated that doubling all federal individual and corporate income taxes would not fully cover the additional costs. "It is just absurd".

These changes would lead the USA government to control virtually all health spending in the United States - Sanders' plan would also cover dental care and vision care - in what may be the biggest increase in federal expenditures in history, according to Blahous. But, according to the Kaiser Family Foundation, Medicare's administrative costs have consistently been below 2 percent.

The eye-popping figure is tied in large part to the fact that under Medicare for all, the federal government is created to take on nearly all health spending.

What that translates to is what Medicare for All advocates have been saying all along: Under a single-payer system, Americans would get more quality care for more people at less cost.

At first glance, it is unusual that the Mercatus Center, which is libertarian in its orientation and heavily funded by the libertarian Koch family, would publish a report this positive about Medicare for All. "There is such a thing as a free lunch, per Mercatus". And for Business Insider, Bob Bryan wrote that "while the price tag for the federal government would increase, the total cost of healthcare would go down while also providing healthcare to more than 30 million uninsured Americans".

Nevertheless, there are still plenty of questions about the Sanders plan's economic - and, in particular, political - feasibility, not least with respect to the assumptions about system-wide savings resulting from such a plan. Thorpe was a senior health policy adviser in the Clinton administration.

Levitt said Sanders's plan is a good illustration of what Medicare for all could accomplish in theory, but payment levels for providers hasn't really had a full debate yet.

The savings would come from a variety of places, such as the government's ability to leverage its bargaining power into lower prescription drug costs and mandating that all healthcare providers take the lower Medicare payment rate. "It's not clear to what extent those savings are politically feasible, and socially beneficial".

Responding to the study, Sanders took aim at the Mercatus Center, which receives funding from the conservative Koch brothers.

New study ignites debate over cost of 'Medicare for all'