Published: Fri, August 03, 2018
Medicine | By Brett Sutton

Sanders’ ‘Medicare for All’ Plan Would Cost Additional $32.6 Trillion

Sanders’ ‘Medicare for All’ Plan Would Cost Additional $32.6 Trillion

Sanders thanked the Koch brothers for accidentally arguing that his plan would cut healthcare costs by $2 trillion over 10 years, referring to a study conducted by researchers at the libertarian Mercatus Center at George Mason University-which is backed by the billionaires Charles and David Koch.

Sanders noted that the Mercatus Center receives funding from the conservative Koch brothers, and that Koch Industries CEO Charles Koch is on the center's board. While the speaker fixated on a prediction by the author of the working paper that the Sanders plan would raise federal health-care spending by roughly $32.6 trillion between 2022 and 2031, economists who actually read the report focused on a far more salient detail.

That's right. A report that was supposed to discredit the single-payer solution found that, even after the benefits of a Medicare for All program are realized-"additional healthcare demand that arises from eliminating copayments, providing additional categories of benefits, and covering the now uninsured"-the potential cost of the plan would still be less than "potential savings associated with cutting provider payments and achieving lower drug costs".

If Americans double all corporate and individual federal income taxes, they would still fail to pay for Sanders' plan. His office has not released a cost analysis.

The idea won broad rank-and-file support as Sanders ran on it in the 2016 Democratic presidential primaries.

The Mercatus Centre also projected the plan would garner savings, like from lower prescription costs by $846bn by 2031. "That's what was in the study", said Sanders. By 2025, the current for-profit healthcare system is expected to cost a staggering $5.5 trillion per year.

Proponents of Medicare for all, also known as a single-payer system, are quick to note the study also estimates national expenditures on healthcare would decrease by about $2 trillion if the Sanders bill were signed into law. Even if Democrats manage to take control of both the House and Senate, a narrow majority with a Republican in the White House would make it hard to enact this kind of legislation. Single-payer systems in many European countries demonstrate that they can reduce overall national health spending, but that does not mean that a Democratic administration could implement one without incurring an vast political backlash, said Harold Pollack, a health-care expert at the University of Chicago.


Kenneth Thorpe, a health policy professor at Emory University, pointed out that "even though people don't pay premiums, the tax increases are going to be enormous".

And, they say, putting all Americans on one insurer would create a large-enough pool to force private health-care providers to charge less, while eliminating private insurers' spending on marketing and administrative overhead that do not improve health outcomes. It also banks on saving trillions by streamlining administration.

The Mercatus study also takes issue with a key cost-saving feature of the plan - that hospitals and doctors will accept payment based on lower Medicare rates for all their patients.

But other provisions would tend to drive up spending, including coverage for almost 30 million uninsured people, no deductibles and copays, and improved benefits, including dental, vision and hearing. Medicare rates are now about 40 percent less than private insurance, according to the analysis. Most U.S. spending on health care is done through the private sector.

The Koch brothers have invested billions of dollars in a decades-long campaign to turn public opinion against necessary reforms, such as the establishment of a single-payer health care system in the United States.

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