We are still more than a year away from the Democratic National Convention in Milwaukee, Wisconsin, but no matter who is officially named as President Donald Trump’s opponent, we already know he or she will be pushing for a government takeover of the health care sector.
The only question is how fast.
All of the top U.S. senator candidates, including Sens. Cory Booker (D-NJ), Kamala Harris (D-CA), and Elizabeth Warren (D-MA), have endorsed Sen. Bernie Sanders’s (I-VT) “Medicare For All” health care bill. This is the most direct route to government-run medicine.
But while former Vice President Joe Biden and South Bend, Indiana Mayor Pete Buttigieg have, so far, declined to sign on to Sanders legislation, they both have endorsed “single-payer lite” alternatives that purportedly let Americans “buy-in” to Medicare.
Unfortunately, as Juniper Research Group CEO Chris Jacobs explains in his new book, “The Case Against Single Payer,” all of these Medicare buy-in plans are simply slightly slower ways to get to the desired single-payer goal.
The problem with all of these plans, from both “Medicare For All to “Medicare For All Who Want It,” is that they are all pegged to the Medicare reimbursement system.
The thing is, doctors and hospitals do not get paid the same amount for every patient they see. Each private insurer negotiates a rate with hospitals, and then the government sets the rates for Medicare and Medicaid patients.
And hospitals get paid far less for the Medicare and Medicaid patients they serve. Currently, Medicare pays hospitals just 60% of what private insurance pays and Medicaid pays just 61%. If hospitals could only charge the Medicare reimbursement rate, many of them would go out of business. According to the Centers for Medicare and Medicaid Services, 72% of hospitals lost money on their Medicare patients in 2017.
So, if most hospitals are losing money on every Medicare patient they serve, then where are they making all their money? From private insurance. And this is why the Medicare “buy-in” plans are no better than the “Medicare For All” plans.
The more people “buy-in” to Medicare, the more Medicare patients hospitals serve, and the more hospitals have to recuperate that money by charging private insurance more. The more insurers have to pay hospitals, the higher insurance premiums go, causing more and more people to “buy-in” to Medicare.
“Medicare For All Who Want It” plans are really just a death spiral for private insurance that will eventually lead to “Medicare For All Whether They Want It Or Not.”
“Good!” single-payer advocates will say. The sooner private insurance dies the better! “The insurance companies last year alone sucked $23 billion in profits out of the health care system, $23 billion,” Sen. Warren said at the first Democratic debate.
But as Jacobs notes in his book, when you start to look at all the fraud and abuse in the Medicare and Medicaid systems, that $23 billion in insurance profits starts to look like a bargain. In 2018 alone, Medicare ($48.5 billion) and Medicaid ($36.2 billion) made $84.7 billion in fraudulent and improper payments. Not a dime of that money made a single patient healthier. It was a pure loss for taxpayers.
And that number would only skyrocket if Medicare became the only way Americans were allowed to finance health care. “In 2018,” Jacobs writes, “Americans spent nearly $3.65 trillion on health care. If a single-payer system in control of all that health spending maintains an improper payment rate equal to the current fee-for-service Medicare program, that would imply approximately $296.1 billion in spending on fraudulent or improper payments every year.”
There are many more reasons Americans should reject single-payer health care, and Jacobs touches on many of them in his book, including: Doctors being forced to perform abortions, the doubling all personal and corporate income taxes, and the loss of 1.5 million hospital jobs.
Our current system definitely has its flaws, and Jacobs has some suggestions on how to make it better; but the last thing we should do is double down on the worst parts of our existing system. Single-payer health care, however, would do just that.
Mike Lee, a Republican, is the senior U.S. senator from Utah.