Study Puts $32.6 Trillion Price Tag on Bernie’s Health Plan

A universal health care plan dubbed “Medicare for All” is gaining steam on the Left, but a study released Monday puts an unfathomably high price tag on the endeavor — $32.6 trillion over a decade.

Charles Blahous, who wrote the study for George Mason University’s Mercatus Center, told LifeZette that the United States never has created an ongoing government program that expensive. He said the only historical analogy is World War II, which was temporary.

“It is hard to wrap your head around a number that big,” he said.

The federal government currently is projected to spend $3.859 trillion on health care in 2022 if the plan is adopted now. The study estimates that the Medicare for All plan Sen. Bernie Sanders is pushing (I-Vt.), would add an additional $2.535 trillion on top of that. The additional expenditures would consume about 10.7 percent of the country’s gross domestic product (GDP) and rise to 12.7  percent by 2031.

The study assumes that switching to a single-payer health system would reduce administrative costs and save money by trimming payments to doctors and other health care providers. Both assumptions could be highly inaccurate.

Even so, coming up with a funding mechanism would prove to be an enormous political challenge. The study notes that the projected cost increase by itself would be more than two times as much as all the projected total discretionary spending, including defense and domestic programs other than entitlements.

If Congress doubled all federal income and corporate taxes, it still would not generate enough revenue to pay for the plan, the study concludes.

Blahous, a former Social Security and Medicare trustee, said he stuck to the numbers and avoided addressing political questions about whether something so large is practical.

“Obviously, that’s a question that needs to be asked,” he said.

Sanders long has advocated a Europe-style health system that guarantees insurance coverage to every American. With a hard leftward push in the Democratic Party, however, the self-styled democratic socialist no long occupies an island unto himself.

In September last year, 16 senators signed on as co-sponsors of the Vermont senator’s bill. That included a number of senators mentioned as potential presidential candidates.

Sanders’ spokesman did not respond to LifeZette’s request for comment. But the senator took the study as good news, focusing on a comparison of the overall cost of his plan compared with total U.S. spending on health care from public and private sources under the current system.

“Even a Koch brothers-funded attempt to trash Medicare for All can’t hide the truth: Medicare for All will lead to a $2 TRILLION REDUCTION in national health expenditures over 10 years,” he tweeted. “That’s trillion with a ‘T.'”

The Koch brothers mention was a reference to libertarian activists Charles and David Koch, who have provided financial support for the Mercatus Center.

But health policy experts who favor free market reforms to health care said the comparison is misleading because the study makes conservative projections that accept assumptions that likely would not materialize in the real world.

Grace-Marie Turner, president of the Galen Institute, told LifeZette that the 10-year savings of $5.307 trillion projected from lower payments to health care providers are unlikely to happen. Past efforts by Congress to make much more modest reductions have met with fierce resistance.

“He assumed very low payment rates,” she said. “That’s not going to be sustainable.”

Without cuts in reimbursements to providers, the study projects that the 10-year cost of the additional spending would rise from $32.6 trillion to nearly $38 trillion.

Turner said that the additional costs foreseen in the study, on the other hand, are in line with other estimates.

“It’s credible, and it should scare people [and convince them] that this isn’t the solution,” she said.

Turner pointed to a number of states that have considered but rejected government-run health care in recent years. “Vermont was all in” before dropping the idea, she said. Similar proposals also stalled in California, and nearly 80 percent of Colorado voters said “no” in a 2016 referendum.

“Every single state that has looked at a single-payer system has crashed and burned when they see the price tag,” she said.

Public support for government-run health care has risen over the past two decades, particularly among independents. A June 2017 survey by the Kaiser Family Foundation found support at 53 percent, compared with 43 percent who opposed it. That was up from 40 percent support in an average of six polls taken from 1998 to 2000.

However, Kaiser found that support dropped when respondents learned of arguments against universal health insurance. Support declined by 21 percentage points after respondents heard an argument that it would give government too much control over health care.

Support also dropped by 13 points and 19 points, respectively, based on arguments that it would replace the Affordable Care Act and require higher taxes.

Related: ‘Medicare for All’ Push Highlights Democrat Embrace of Fringe Positions

Blahous said it is difficult to predict how doctors and other providers would respond to lower payments. Turner said the government currently gets away with lower reimbursements to health providers because the private insurance system offers higher payments. Without that, she said, hospitals would close and fewer people would enter medicine.

“It would decimate the quality of our health care system,” she said.

Supporters of government-run health care often point to other countries that use the model. But Blahous said the United States is not starting from scratch. It has a large and complicated health care system that would be difficult to untangle, he said.

“I would suggest great caution in applying it,” he said. “We are where we are.”