Democratic Party’s New Star Makes A Poor Case For Medicare For All

She only won about 16,000 votes in a primary election this summer in which 13% of eligible voters participated. Yet Alexandria Ocasio-Cortez has emerged as the Democratic Party’s biggest star and a media darling.

The 28-year-old defeated 10-term Rep. Joe Crowley in the Democratic primary for New York’s 14th congressional district, which encompasses the eastern Bronx and north Queens, this past June. Ever since, Ocasio-Cortez has been a fixture on television advocating for, among other things, “Medicare for All.”

Her arguments for single-payer have been littered with falsehoods and half-truths. A hard look at the data — and the experiences of other countries with single-payer — shows that a government takeover of our nation’s health care system would be a disaster for taxpayers and patients.

Consider Ocasio-Cortez’s assertion that Medicare for All would “actually be much cheaper than the current (health care) system.”

At first glance, she appears to have a point. An authoritative new study conducted by Charles Blahous, a scholar at George Mason University’s Mercatus Center, of the Medicare for All plan introduced by Sen. Bernie Sanders in Congress last year projects that personal health expenditures would total $3.849 trillion in 2022. That’s about $10 billion less than what the Centers for Medicare and Medicaid Services projects under the status quo.

That relatively modest drop obscures massive, but offsetting, changes to the health care system. Treatments would be free at the doctor’s office or hospital, and everyone would have coverage. As a result, people would visit health care providers more frequently. Personal health care spending would increase by $435 billion.

However, the government would effectively outlaw private insurance and pay all providers the current Medicare reimbursement rate. That would represent a pay cut of about 40%, relative to what private insurers pay. Lower reimbursements to hospitals, doctors, and drug companies would reduce spending by $445 billion — hence the net $10 billion savings.

Of course, it’s unlikely that such drastic reimbursement cuts would ever become law. Medicare reimbursement rates already strain the finances of many hospitals and doctors. More than eight in 10 hospitals will lose money on Medicare patients by next year.

They compensate by shifting costs onto patients with private insurance. Without these higher reimbursements, thousands of hospitals, clinics, and doctor’s offices would go out of business or lay off staff.

This potential decline in the supply of care is a big reason why Congress has historically balked at cutting Medicare reimbursements rates. In 1997, lawmakers adopted the Sustainable Growth Rate formula, which would have limited annual increases in reimbursement rates. Congress postponed those payment caps 17 times in 11 years until 2015, when it repealed the formula permanently.

The cuts proposed by Sanders and Ocasio-Cortez are much bigger. If past is prologue, they won’t happen. So health care spending would explode under Medicare for All.

Ocasio-Cortez and other progressives also claim single-payer is a moral imperative. “Every other developed nation in the world does this,” she said in an interview with CNN.

Once again, she’s mistaken. Only one developed country, Canada, has a system comparable to Sen. Sanders’ Medicare for All plan, in which the government has a monopoly over payment for medically necessary care. Private insurance for such care is illegal in our neighbor to the north — and would be illegal under Medicare for All, too.

Let’s take a look at the supposed wonder that is Canada’s single-payer system.

The government has limited funds. So it underpays doctors to control spending. Primary care doctors in Canada make two-thirds of what their American peers earn. Orthopedic surgeons take home less than half as much as their U.S. counterparts.

Medicare For All: Lack Of Incentives

Since patients have little incentive to moderate their consumption of care, doctors have to see far more patients in exchange for those smaller paychecks. Half of Canadian doctors feel burned out. Many are retiring early.

Consequently, people are reluctant to practice medicine. Many areas of Canada — particularly rural communities — are short on physicians.

This imbalance of supply and demand results in absurdly long wait times for Canadian patients. The median wait time between referral from a general practitioner and treatment by a specialist was 21.2 weeks in 2017. That’s double what it was 25 years ago.

And for those long waits, Canadians pay steep taxes. According to the Fraser Institute, a Canadian think tank, a typical family of four shells out almost $13,000 a year in taxes for public health care.

Government-run health systems deliver subpar care at astronomical cost to taxpayers. Those are facts that Ocasio-Cortez will need to become familiar with before she heads to Washington.

Read more . . .

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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