Medicare for all is not the answer

KEY THOUGHT: While offering all U.S. citizens free health care using a single-payer system sounds attractive as a political talking point, actually implementing Medicare for All would require a complex restructuring of a multi-trillion dollar industry and cost trillions of dollars. Rather than make promises that don’t make sense politicians should strengthen the ACA and fix its shortfalls.

Health care cost $10,739 per American in 2017. Middle-class and poorer Americans clearly cannot afford these costs, nor can their employers. Although research indicates that people are happy with their company-sponsored insurance they aren’t happy with raising deductibles and higher premiums.

Covering all Americans under Medicare for All could potentially add another 189 million people to the government’s payrolls, which would swamp the current government approval and payment system—especially since the Centers for Medicare and Medicaid Services require prior approval for many medical tests and procedures. More importantly, the Medicare and Medicaid payment system is almost entirely based on fee for service, wherein hospitals, physicians, and pharmaceutical dispensers are paid for services rendered. Naturally, this can incentivize doctors and hospitals to require more office visits, do more procedures, and conduct more tests to get paid more.

A Mercatus Center study estimated that Medicare for All would cost the federal government around $32 trillion. These estimates do not include likely increases in Medicare and Medicaid rates required to lessen losses to hospitals and doctors.

Who will pay for these enormous costs?

The federal government cannot cover them without new revenue, as the current U.S. debt is already $22 trillion, with the annual deficit exceeding $1 trillion per year in 2020 and beyond. The Committee for a Responsible Federal Budget estimates that Medicare for All would require a tripling of payroll taxes or more than doubling all other taxes. The Mercatus Center, however, found that “doubling all federal individual and corporate income taxes going forward would be insufficient to fully finance the plan.”

While the Affordable Care Act helped millions of Americans gain health care coverage, the law has done little to control health care costs, and many Americans still can’t afford to buy insurance.

Nearly 45,000 annual deaths are associated with lack of health insurance, according to a new study published online today by the American Journal of Public Health. That figure is about two and a half times higher than an estimate from the Institute of Medicine (IOM) in 2002.

The study, conducted at Harvard Medical School and Cambridge Health Alliance, found that uninsured, working-age Americans have a 40 percent higher risk of death than their privately insured counterparts, up from a 25 percent excess death rate found in 1993.

What’s the answer?

That is the trillion dollar question. The answer doesn’t lie in more government intervention that could turn out to be disastrous. It lies with employers and employees. It’s only a matter of time before a group of employers forms their own health insurance company to help control costs. We also need to seriously address patient outcomes tied to costs and some type of incentive program to get people eating healthy and exercising.