Healthcare and the Bern

Bernie for DPR

In May of this year, Kurt Meyer, a Democratic country party chairman organizing an event supporting Bernie Sanders, sent a text to the Iowa political director for Hillary Clinton. It read, “Objects in your rearview mirror are closer than they appear.”

Sanders is certainly not in Clinton’s rearview mirror anymore. After winning the New Hampshire primary, coming within 0.3 points of Clinton in the Iowa Caucus, and raising over 75 million dollars to date, the sentiment at the announcement of his campaign that his candidacy was irrelevant has completely disappeared.

Sanders has won over crowds with his message rallying against income inequality and Wall Street. He promises a sweeping political revolution, with one of his main points advocating for universal healthcare on a single-payer system. Putting aside the argument that Sanders’ plan is politically infeasible, what details his plan does provide don’t quite add up.

Sanders’ plan is to abolish the private health insurance industry, placing the responsibility of creating and implementing a universal healthcare system on the government. Sanders’ healthcare plan is titled “Medicare For All,” yet it bears little resemblance to Medicare. Sanders’ plan is much more generous, including dental, vision, hearing, and mental-health coverage. His plan also abolishes co-pays, deductibles and other cost-sharing. Sanders claims over the next ten years, his plan will cost over $6 trillion less than the current system.

This assertion is backed up by a study done by Gerald Friedman, an economist at the University of Massachusetts at Amherst. Friedman projects the total cost of the new single-payer system to be $40.9 trillion from 2017 to 2076. However what Friedman doesn’t account for is that a large portion of governmental health care spending is not done by the federal government, but instead by state and local governments, and under Sanders’ plan this spending would have to be picked up by the federal government.

Friedman also acknowledges in a footnote that 20% of people’s projected out-of-pocket costs would be for things “not medically necessary” and therefore not included in coverage costs of Sanders’ plan. In addition, Sanders’ plan proposes a new payroll tax, raising income taxes, estate taxes, taxes on capital games, and income-based premiums on households in order to generate $13.7 trillion in taxes. Yet Sanders makes no mention of the ramifications and added pressure these tax increases would cause on the economy. In fact, recently the former Chairs of the Council of Economic Advisers for Presidents Obama and Clinton wrote an open letter stating that  “the extreme claims by Gerald Friedman…cannot be supported by the economic evidence. No credible research supports economic impacts of these magnitudes.”

Sanders claims that the projected savings would come through cutting administrative costs. However, the primary way single-payer systems save money is through cutting reimbursements to drug companies, hospitals and doctors. You have to be willing to spend less on medical procedures and services, but more than that the government has to be willing to say no when drug companies, hospitals, and doctors don’t meet the prices that the government wants. If they say no, then they are effectively also saying no to the people who need these treatments and services. The Sanders plan is silent on how our government would determine the cost-benefit boundaries for technologies and treatments and thus when they would say no. And imposing these low costs could have ramifications that include the closure of many hospitals, thus limiting access to those who live in more rural areas. In fact Physicians for a National Health Plan, an advocacy organization supporting single-payer systems, proposed that in order to make the single-payer system cost-effective, for-profit hospitals must be completely abolished and responsibility for operating health facilities given to the government. While it seems as though Sanders plan would necessitate something similar, it is again silent without even the mention of hospitals.

The current health care system in America has its issues and needs to change. However, Sanders’ current plan is not revolutionary at all. Instead, what little detail it provides is insufficient to ensure that the plan is feasible for the government and feasible for the American people. Bernie Sanders has been a revolutionary candidate on many different grounds, and has injected a necessary level of energy and political discourse into the Democratic race. His opponent, Hillary Clinton, is often accused of not leveling with the American people. This same level of scrutiny needs to be applied to Senator Sanders as well.

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