The top story out of this week’s Democratic presidential debate was Sen. Elizabeth Warren’s accusation that Sen. Bernie Sanders called her “a liar on national TV.” Both progressive firebrands have a casual relationship with the truth, especially when it comes to their plans for healthcare. But Warren’s pitch has grown ever more misleading.
For months, she adamantly defended “Medicare for all,” a full-blown government takeover of the U.S. health insurance system. Private insurance would be outlawed, and the federal government would be granted a monopoly over payment for health services.
Many of the 180 million people with private insurance greeted Warren’s plan coldly. So she began to frame her plan as a public option first, with a three-year transition to “Medicare for all.” At this week’s debate, she said she’d “build on the Affordable Care Act, but where we end up is we offer healthcare to all of our people. And we can offer it at no cost or low cost to all of them.”
A public option would quickly become the only option for consumers. Private insurers can’t match the low prices of a government-run insurer that doesn’t have to cover its costs. The public option would also be able to dictate providers’ reimbursement rates. Private insurers don’t have that kind of negotiating power.
As a result, private insurers would exit the market, unable to compete. One analysis projects that more than 130,000 people with private exchange coverage would be jettisoned from their plans in a public option’s first year. Millions more with employer-sponsored coverage could meet a similar fate.
Of course, that’s the point. It’s easier to nationalize the health insurance system if a government-run public option has already swallowed a few million people who previously had private coverage.
Then there’s Warren’s “no cost or low cost” claim. She says her plan would require a $20.5 trillion increase in federal spending over a decade — more than we currently spend on Social Security, the largest line item in the federal budget. Virtually everyone else who’s analyzed “Medicare for all” thinks $30 trillion-plus is more realistic.
That’s some definition of “low cost.” If this is the best “offer” Warren can make, no thanks.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All, (Encounter 2020). Follow her on Twitter @sallypipes.