May 3, 2019

Potholes on the Road to ‘Medicare for All’?

CBO: A single-payer system “could be complicated, challenging, and potentially disruptive.”

ObamaCare, once an albatross around the necks of Democrat lawmakers, is now at a point where even a Republican-led Congress and president can’t seem to get rid of it — notwithstanding their long-standing vows to do so. Repeal, though, was a powerful promise: enough to win the Republicans three out of four elections, with the odd election in 2012 occurring after the more popular aspects of ObamaCare had become law but its exchange issues, rapid rate increases, and coverage mandates were still lurking in an unknown future. Had ObamaCare taken full effect in 2012, perhaps we’d be winding down the second term of President Mitt Romney.

Remembering, however, that the strident “repeal” rhetoric of Tea Party Republicans was slowly supplanted by “repeal and replace,” Democrats who regained the House in the 2018 elections have felt confident enough to introduce health care proposals that go beyond the ObamaCare concept of simply mandating health care coverage with acceptable insurance alternatives available from either the private or public sectors. Led by Pramila Jayapal, a second-term representative from the Seattle area, Democrats are now toying with the idea of eliminating private insurance entirely through a “Medicare for All” system. Jayapal’s bill had an informal hearing earlier this week in one of the House’s smallest meeting rooms — a hearing described by The New York Times as “off limits to the scores of people who assembled in Washington to show support.”

Despite Democrats’ best efforts to give the “Medicare for All” crowd its day while keeping the idea itself from public consumption, that hearing marks the evolution of where many on the Right predicted ObamaCare would go all along — a view confirmed by former Senate Majority Leader Harry Reid in 2013. More recently, current House Budget Committee Chair John Yarmuth (D-KY) predicted that it’s “no longer a matter of if we will have a single-payer health care system in our country, but when.”

A guide to just how far off “when” will be came out earlier this week, to comparatively little fanfare. To answer Yarmuth’s previous request for a study of the practicality of “Medicare for All” or other single-payer programs, the Congressional Budget Office put together a 34-page study detailing many of the issues that would arise from such an undertaking. The CBO report is “a sober and practical guide to single-payer skepticism,” wrote Reason’s Peter Suderman.

And in the understatement of the year, the CBO said, “The transition toward a single-payer system could be complicated, challenging, and potentially disruptive.” In the case of Jayapal’s proposal, that transition timeframe is just two years — which led onetime Clinton administration HHS secretary and now freshman House member Donna Shalala to concede, “I could build this system, [but] I don’t think I could do it in two years.”

Other Democrats have introduced more modest enhancements to ObamaCare or opportunities to buy into Medicare, but all these ideas are efforts to increase the federal role in the health care sector. So while the CBO study stopped short of predicting actual costs — an omission that disappointed supporters and opponents alike — it did provide useful comparisons between single-payer programs found in several other industrialized nations, including a glimpse of how they’re funded. And the cost isn’t necessarily unknown: Studies over the last few years have agreed that the price tag of Medicare for All could be well over $2 trillion a year and perhaps over $3 trillion — on top of an annual budget already climbing toward $5 trillion a year.

Nor is it just fiscal costs. As Reason’s Eric Boehm put it last year, “Moving to a single-payer system also comes with costs that aren’t captured by a balance sheet. Much of the outcry over the implementation of the Affordable Care Act revolved around the disruption of health care coverage in the individual market. But Obamacare caused a few million Americans to move from their existing health insurance plans. Moving to single-payer means a disruption for literally everyone.”

We were once famously (and repeatedly) told that if we liked our health insurance, we could keep it. Yet the side with that track record is trying to make us believe “Medicare for All” would be the perfect solution to a problem we didn’t have a decade ago — when 70% of respondents to a November 2007 Gallup poll rated their health care coverage as “good” or “excellent.” Under ObamaCare, that number hasn’t really budged.

At one time, the discussion was about how Medicare was going to “wither on the vine,” as Newt Gingrich famously remarked. Now the question is just how quickly our economy and overall health care system will wither on the vine should “Medicare for All” come to pass. The great fear for Democrats is that we’re figuring out the answer.

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