The Democratic presidential primary has consolidated into a showdown between former Vice President Joe Biden and Sen. Bernie Sanders (I-VT). One of the key issues on which the Democratic candidates are running is health care.
While the progressive gold standard seems to be a single-payer system, there’s a break within the party, with some preferring a more “moderate” approach to reform. Both Biden and Sanders have presented health care plans that would greatly expand the role of the federal government, and increase government spending by billions to trillions of dollars over a decade.
The “Medicare for All” plan put forth by Sanders is estimated to cost more than $32 trillion over a decade, while Biden’s plan is estimated to cost approximately $750 billion.
The Daily Wire recently spoke with health care policy expert Avik Roy about Medicare for All and the Biden plan, as well as what more conservative, free market solutions would look like. Roy is the co-founder and president of the Foundation for Research on Equal Opportunity (FREOPP), which “conducts original research on expanding economic opportunity to those who least have it,” according to the organization’s official website.
In part one of this three-part interview, Roy discusses what “Medicare for All” really means, the flaws of such a system, the dangers of the “moderate” counterpoint, and if a nation can achieve so-called universal coverage without a health care mandate.
DW: Medicare for All has become kind of the gold standard for progressives, despite Bernie losing some currency in the race as of Super Tuesday and beyond. What are the major flaws of such a system?
ROY: Well, before we get to the flaws, I think it’s important to actually define what so-called “Medicare for All” is, because when pollsters ask questions about whether people support Medicare for All, the polls make it clear that people don’t actually understand what it is. So, let’s define what Medicare for All is or at least – I always put quotes around “Medicare for All” because it’s not actually Medicare for All, what Bernie Sanders is proposing. More than a third of the people enrolled in the Medicare program today have private insurance through a program called Medicare Advantage, which is a robust, competitive market-based program to give seniors the coverage they need.
That would be abolished under what Bernie Sanders and others call “Medicare for All.” Under what they call Medicare for all, all private insurance would be abolished. So, it would end Medicare as we know it first and foremost because nearly 40% of all seniors are enrolled in private plans in Medicare today. That’s just for the Medicare physician and hospital benefit. Even more seniors, almost all seniors, enroll in private plans to offer prescription drug coverage through the 2003 Medicare Modernization Act. That would also be abolished under the Bernie Sanders plan. So, if what Bernie calls “Medicare for All” were enacted, Medicare as we know it would be wiped out. It would be repealed and replaced by an entirely new program in which there is no room for private insurance.
That’s really important to understand, that what Bernie and the Left call “Medicare for All” would repeal and replace Medicare along with Obamacare, and the employer-based market, and everything else about our healthcare system. So, it is truly a dramatic, if not a radical, departure from the system we have. It does not resemble Medicare in its current form.
On the polling side, when you ask voters what do they understand the term “Medicare for All” to mean, the vast majority understand it to mean that if somebody is uninsured or they don’t have an affordable option to get their coverage, they’d have an option that resembles Medicare. And because overwhelming majorities of Americans want every American to have health insurance – just like we want every American to have a good public school education – people support that. People support every American having affordable health insurance. Again, that is not what Medicare for All is. Medicare for All is not an option for people to buy affordable coverage if they don’t have any affordable options today; it’s a removal of options, because any choice you have today in your insurance care, it would be eliminated under “Medicare for All.” Instead of having more affordable options, you would have only one option, the government run option, and that option would be not necessarily more affordable than what you had before.
The two most important gaps between what is described as “Medicare for All” and the reality of single-payer health care is one, that under Medicare today, most seniors have some form of private coverage whether it’s through Medicare Advantage or the Medicare prescription drug program – and those options would be abolished. Two, it’s important that people understand that Medicare for All is not the same thing as what Bernie is describing as “Medicare for All.”
DW: What are the primary flaws of Sanders’ system, or something like “Medicare for all who want it,” which was proposed by former candidate Pete Buttigieg?
ROY: The first is that the plan that Sen. Bernie Sanders and Sen. Elizabeth Warren and others have put out there would basically make healthcare “free” at the point of care. There would be no premiums, no co-pays, no deductibles. You could basically go to the doctor, go to the hospital, get any kind of healthcare service you want, and the government would pay for it. That’s the theory.
Of course, if you set up that kind of system, you create a health care system that’s the equivalent of me at an open bar at an in-law’s wedding, where I’m going to consume everything and anything that I can pull off the shelf because it’s free to me. So, what you see in every single-payer system, particularly the British system and the Canadian system, is that there are massive restrictions on access to care, and heavily regulated prices and controls on prices of care.
Because otherwise, if you just have a system where everyone can consume any health care they want and they don’t have to pay a bill, you’re just going to have massive over-utilization of the health care system, and prices can go up because if you’re a hospital or a doctor or a drug company, you can charge whatever you want and pass the bill off to the taxpayer. That’s a great model for the health care industry, but it’s not a great model for the taxpayer. What most rational single-payer systems do is ration care. They say, “We are going to make it free on the front end, but we’re going to restrict your ability to use the health care system so that we don’t go broke.”
And Sanders’ plan doesn’t really account for that. It tries to have the “free Christmas tree for everybody,” but tries to minimize, from a political standpoint, how the plan would restrict access to care or restrict payments to hospitals and doctors, because Bernie understands that those details are politically problematic.
It would result in massive increases in taxes, and that would also be controversial. So, those are the various ways in which single-payer is problematic and even unworkable. That’s why, frankly, I think it has been a mistake for conservatives to spend all their energy debating single-payer. Single-payer is bad. If Republicans were to ever run against a Democratic nominee who was a genuine advocate of single-payer, I think that would be pretty clearly expressed.
I think what conservatives and Republicans have done a pretty bad job of doing is really thinking through things that are more incremental than single-payer, but are also things that restrict human freedom and may increase costs in the healthcare system.
DW: Such as?
ROY: Well, let’s talk about the Biden plan. Joe Biden’s plan is not a “Medicare for All” plan. If we’re spending all this time talking about Medicare for All, and Medicare for All is not really what’s mainstream in the political conversation, even among Democrats, then the utility of that discussion is somewhat lower. What’s really important to discuss is what Joe Biden wants to do, which is much more reflective of, let’s call it the Democratic establishment, or the center-left Democratic establishment.
To oversimplify, there are two major components to Joe Biden’s health reform plan. One is a $750 billion bailout of Obamacare. As we all know, Obamacare has doubled or tripled health insurance premiums, particularly for younger and healthier people who need to buy insurance on the ACA exchanges. Biden doesn’t want to reform the dumb regulations that have driven those premiums upward; instead, he wants to ask taxpayers to spend another $750 billion over the next decade to paper over those mistakes.
That is a much more serious threat, I guess you could say, or policy probability, than single-payer health care. Single-payer health care, the Bernie plan, would increase federal spending by $38 trillion, give or take a few trillion, over ten years. The Biden plan is considerably smaller in scope relative to the Bernie plan. It would increase federal spending by about $750 billion over ten years. So that’s something like 50 times smaller than the Bernie plan in it’s ambition, but $750 billion is still a lot of money. Obamacare spent $2 trillion over ten years trying to cover the uninsured. So, $750 billion is a lot, especially when you consider the net spending of Obamacare.
Because Obama also cut Medicare spending by $800 billion over ten years to fund that coverage expense, the net spending increase of Obamacare is more like $1.2 trillion over ten years. So, Joe Biden’s plan is comparable in scale to Obamacare, at least fiscally, in terms of what it would do to paper over the rising premiums that Obamacare caused.
So, that’s much more important for liberty-oriented people to consider because it’s the kind of plan that is now described as the “moderate plan.” The “responsible, pragmatic, moderate” plan on the Democratic side is to increase federal spending by $750 billion over the next ten years.
DW: Is there any successful health care system anywhere in the developed world that does not offer universal coverage or include an insurance mandate?
ROY: “Mandatory” is a complex topic actually in the context of the international discussion of health care. For example, if you’re in the U.K. system, it’s not mandatory that you sign up for health care under the NHS, but your taxes go to pay for it. The analogy is – and this is true of a lot of single-payer systems in particular – it’s a lot like what we do in America for public schools. We all pay property taxes and sometimes income taxes to pay for the cost of public school, but not every American sends their kids to public school.
But the parents that send their kids to private school are still paying the taxes to send their kids to public school. So, is that mandatory or is it not? Because you’re not being mandated to go to public school, but you’re being mandated to finance public school.
The way a lot of European systems work is like that, where you’re mandated to pay taxes to fund the public system, but you’re not mandated to participate in the public system – and that varies among countries. The British NHS is on one end of this in terms of really trying to steer you or pressure you to participate in the public system. On the other end of the spectrum are countries like Australia. In Australia, there’s a public system that works exactly like American public schools, where everybody pays taxes to pay for the public system, but a considerable proportion of Australians opt to buy private insurance to have access to private hospitals and private doctors.
So, the answer is yes. You can achieve universal coverage without a mandate.
Not every country has a mandate for you to participate in a public system, but universal coverage does involve taxes that are used to finance the public system. By the way, that’s true in America, too. Everyone who pays taxes pays taxes to fund the public health care system. If you’ve ever received a paycheck, it includes something called FICA taxes, which go to fund the Social Security trust fund and the Medicare trust fund. So, every single one of us who has taken a job of any kind has paid taxes to finance public health care in America. In that sense, America is not that different from a lot of those other countries. So, I do think you can say that there are countries that have achieved universal coverage without a mandate.
A lot of it depends on how you define “universal coverage.” Does universal coverage mean that every single person has health insurance? 100% enrollment? Is that universal coverage? That’s not actually how most scholars define universal coverage. Most scholars define universal coverage as everybody in the country having access to an affordable option for health insurance. Even in the Medicare program – which Bernie Sanders would call universal coverage for the elderly, and most of us would too – 2% of seniors don’t sign up for one reason or another. There are a small minority of people who don’t actually participate in Medicare.
So, if you define universal coverage in that way, saying it may not be that every single person has health insurance, but every single person has the opportunity to buy reasonably affordable health insurance, we can definitely get there without a mandate.
In part two of this interview, which will be released later today, Roy talks about how the current health care system in the United States is neither free market nor government-run, and what a conservative solution could look like.
I’d like to thank Avik Roy for taking the time to speak about such an important issue. For more information, you can follow him on Twitter or visit the FREOPP website here.