Choking on the Cost of ‘Medicare for All’
Last month, Alexandria Ocasio-Cortez, an outspoken socialist, beat 10-term Congressman Joe Crowley, the fourth-highest-ranking House Democrat, in the primary election for New York’s 14th congressional district.
Ocasio-Cortez is a member of the Democratic Socialists of America and a former organizer for Sen. Bernie Sanders’s presidential campaign. She’s also a vocal advocate of “Medicare for All” — a government takeover of America’s healthcare system. Support for single-payer health care is now requirement for securing many Democrats’ votes.
But candidates who advocate single-payer on the campaign trail are increasingly balking once they actually get their hands on the levers of power. That’s because single-payer is cost-prohibitive. Even the most dyed-in-the-wool leftists admit as much, after they take office and have to figure out how to pay for their campaign promises.
Single-payer’s champions generally paint a lovely picture of healthcare utopia. Patients go to see the doctor of their choice whenever they like, get treatment, and leave the clinic without paying a cent. No copays, no deductibles, no cost-sharing, and no referrals — health care is “free” at the point of service.
In reality, health care doesn’t magically become free; people just pay for it outside the doctor’s office, in the form of higher taxes.
Many Democrats have walked back their enthusiasm for single-payer after getting a look at the just how much public money they’d have to come up with.
Last month in North Carolina, Democratic State Representative Verla Insko moved to kill her own pro-single-payer bill. An assessment from the state legislature’s Fiscal Research Division pegged the cost of single-payer at $70 billion, $42 billion of which would have to come from the state. That latter figure is almost twice the state budget.
The Civitas Institute, a free-market think tank in North Carolina, estimated that implementing single-payer would cost a whopping $101 billion just in year one.
North Carolina’s tale is only the latest example of single-payer dreams crumbling after confronting reality. Last year, California State Assembly Speaker Anthony Rendon, a Democrat, pulled the plug on single-payer legislation passed by the state Senate after deeming it “woefully incomplete.” Even that was an understatement — the bill was silent on how it would raise the $400 billion needed to fund single-payer each year.
In 2014 in Vermont, then-Gov. Peter Shumlin — a long-time single-payer advocate — gave up on a single-payer plan after he learned it would cost $4.3 billion annually. That amount was equivalent to 88 percent of the entire state budget. He reluctantly concluded that the proposed funding mechanism for single-payer — a 12.5 percent state payroll tax and a sliding-scale individual tax of up to 9.5 percent of income “might hurt our economy.”
Even Sen. Bernie Sanders, America’s foremost proponent of single-payer, admitted in June that “there will be pain” if the nation adopts the government-run system he favors. The plan he touted on the presidential campaign trail in 2016 would have cost $1.4 trillion per year, according to his own estimates. To pay for it, he called for a new 2.2 percent income tax, a 6.2 tax on employers, and higher taxes on the wealthy.
An independent analysis of Sanders’s plan conducted by the left-leaning Urban Institute estimated that it would cost $32 trillion over 10 years.
And those are just the financial costs. Socialized medicine’s human costs are even greater. Single-payer systems the world over ration care and force patients to wait for treatment.
The United States can barely afford its existing healthcare obligations. In 2017, the federal government spent more than $700 billion on Medicare — a 65 percent increase over just 10 years. Annual costs per capita are expected to increase 4.6 percent per year over the next decade. And the latest Medicare Trustees report, released in June, reported that the Part A Trust Fund, which covers payment for hospital care, will be depleted in 2026. That’s three years earlier than previous projections. At that point, workers’ payroll taxes earmarked for Medicare will no longer cover the program’s costs.
In other words, America is struggling to pay for “Medicare for Some” — much less “Medicare for All.” As pro-single-payer candidates like Ocasio-Cortez will soon discover, no amount of enthusiasm for single-payer can overcome basic math.