ibusinesslines.com August 20, 2018

Does Bernie Sanders' health plan cost $33 trillion - or save $2 trillion?

03 August 2018, 02:26 | Melissa Porter

America Can Get Ocasio-Cortez’s and Bernie's ‘Medicare for All’ Plan for the Low Price of $32 Trillion

Bernie Sander’s ‘Medicare For All’ Would Cost $32.6 Trillion, Study Projects

Bernie Sander's proposed single-payer national healthcare program is projected to cost the federal government $32.6 trillion over the next 10 years, requiring historic tax increases. In that case, the USA would spend about $400 billion more in 2031. Federal health expenditures refer to health spending from the federal government in particular.

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. The senator's plan projects overall U.S. health care savings. Blahous was a senior economic adviser to President George W. Bush and a public trustee of Social Security and Medicare during the Obama administration.

Josh Miller-Lewis, Sanders's press secretary, said the additional $32 trillion is already being spent by private insurers, and the Medicare-for-All plan would simply move the money to the government. But this is more of an accounting thing than anything else: rather than paying premiums, deductibles, and co-pays for health care, people will instead pay a tax that is, on average, a bit less than they now pay into the health care system and, for those on lower incomes, a lot less. 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.

Robert Graboyes, a senior research fellow and health care scholar at the center who read Blahous's report through its production, said the report doesn't "predict" $2 trillion in savings.

On its current trajectory, the United States is projected to spend $7.65 trillion annually on health care by 2031, according to the Mercatus study. Its findings are similar to those of several independent studies of Sanders' 2016 plan. The net change across the whole ten-year period is a savings of $2.054 trillion.

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.

When talking about Medicare for All, it is important to distinguish between two concepts: national health expenditures and federal health expenditures. But, according to the Kaiser Family Foundation, Medicare's administrative costs have consistently been below 2 percent.

Sanders' office has not done a cost analysis, a spokesman said. "The striking number people have to grapple with is whether the federal government could take on something of this magnitude".

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.

Whether the US political system could stomach the scale of these changes is another question altogether.

Medicare-for-All, also known as single-payer healthcare, has become increasingly popular among Democrats, including progressive candidates such as Alexandria Ocasio-Cortez, who pulled off a shocking primary upset last month in New York's 14th Congressional District and made the issue a central part of her platform.

Sanders' plan - if he succeeds in implementing it - will instead "increase the share of that cost paid through taxes, rather than through insurance premiums or out of pocket costs, according to Axios". "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 USA health system".

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