Don’t Buy The Democrats’ ‘Moderate’ Alternatives To Medicare For All – Pacific Research Institute

Don’t Buy The Democrats’ ‘Moderate’ Alternatives To Medicare For All

Democrats appear to be getting skittish about Medicare for All.

During the first two Democratic presidential debates at the end of last month, moderator Lester Holt of NBC News asked all 20 candidates to raise their hands if they supported abolishing private health insurance and enrolling everyone in a government-run health plan. Only four did so. And one of those four, Senator Kamala Harris, said the next day that she didn’t mean to come out in favor of outlawing private coverage.

But the remaining 16 candidates are no moderates. Their preference for a “public option,” or government-sponsored insurance plan, would lead to the same eventual destination: single-payer health care. The only question is how long that journey would take.

On the one side at the debates, Senator Sanders, along with Senator Elizabeth Warren and New York Mayor Bill de Blasio, argued that private health insurance should have no place in America’s healthcare system. If we let the government run everything, they claim, we can cover everyone and save money.

Minnesota Senator Amy Klobuchar countered by saying she’s, “simply concerned about kicking half of America off of their health insurance in four years.” Maryland Rep. John Delaney went further, calling Medicare for All “bad policy” that would close every hospital if the payment cuts it prescribes were to go into effect.

Many Americans share Klobuchar’s concern. Surveys consistently show that the vast majority of Americans like their private insurance plans. More than seven in ten are satisfied with the insurance they get through work.

The data backup Delaney’s point, too. In 2017, Medicare and Medicaid paid hospitals $77 billion less than the cost of treating the programs’ beneficiaries. Hospitals can’t absorb losses like that for long.

Klobuchar, Delaney, and others propose allowing people to buy into a government-sponsored health plan—perhaps the existing Medicare or Medicaid programs, or a newly created plan. They believe that a public option will force private insurers to compete harder for consumers’ business and thereby drive down the price of insurance.

But a public option would put the country on an inexorable course to single payer.

For starters, the public option wouldn’t need to cover its costs. It can’t go bankrupt—it’s backed by the federal treasury. Second, supporters of the public option envision paying doctors and hospitals at rates similar to those paid by Medicare, which are, of course, much lower than those for private insurers. And they’d require hospitals and doctors who currently accept Medicare to see patients covered by the new public option as well.

In other words, the public option could lose unlimited amounts of money—and pay healthcare providers at below-market rates. These two factors would allow the public option to set its premiums at artificially low levels—much lower than private insurers, who need to at least break even and don’t have the ability to essentially name their price.

The consequences would be predictable. Large numbers of people would sign up for the low-cost government plan. Doctors and hospitals, forced to treat more people at below-market rates, would raise their prices for the privately insured. These insurers would pass those higher prices along to their customers in the form of higher premiums.

The cycle would repeat, until everyone had fled their old private insurers for the low-cost government-run plan. At that point, the public option would be the only option.

So while proposals for a public option may not explicitly outlaw private insurance, they’d bring about its death by other, less direct means.

This isn’t paranoia. Progressives tried to get a public option included in the House’s version of the bill that became Obamacare. As Jacob Hacker, a Yale professor who is one of the founding fathers of the idea, said in 2008, the public option would let Democrats get to single payer “in a way that we’re not going to frighten people into thinking that they’re going to lose their private insurance.”

Centrist Democrats refused to get behind Obamacare as long as it had a public option, and the provision was stripped from the bill before it passed Congress.

Senator Kirsten Gillibrand trotted out Hacker’s argument again during the Democratic debate in June. “The quickest way you get there [Medicare for All] is you create competition with the insurers. God bless the insurers, if they want to compete, they can certainly try.” she said. “What will happen is people choose Medicare and we will get to Medicare for All.”

The Democrats are committed to a government takeover of the country’s healthcare system. They just disagree on how to bring that about—and how fast.

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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