Medicare for All Costs What Your Politics Prescribes

Screen Shot 2019 03 09 at 4.32.19 PM
Screen Shot 2019 03 09 at 4.32.19 PM

A new study by the Mercatus Center has shown that a single-payer healthcare system, colloquially known as “Medicare for All,” would save billions of dollars on healthcare expenses.  In response, Jacobin Magazine recently published a piece called “Even Libertarians Admit Medicare for All Would Save Billions” touting this finding.  At the same time, in a galaxy far, far away, the National Review put out an article titled, “STUDY: ‘Medicare For All’ Would Cost $32.6 Trillion Over Ten Years” highlighting the new federal government expenditures required to support the program.

So which are we to believe?

The answer, as a matter of fact, is that both publications are telling the truth. However, different truths. And unfortunately, by highlighting different aspects of the study, they obscure a debate worth having about who should pay for healthcare in the United States.

Let’s dig a little deeper.

The key feature of a “Medicare for All” system is that the Federal Government would pay for healthcare coverage for all citizens in the United States. The Jacobin article, “Even Libertarians Admit Medicare for All Would Save Billions,” proudly declares that “Medicare for All” could insure 30 million more Americans while eliminating out of pocket expenses (since the Federal Government is paying) and saving $300 billion (through economies of scale and administrative efficiencies). (Note: Some sources argue that these savings could be as high as $3 trillion over ten years.)

That all sounds well and good, right? Well, not so fast. The National Review article pushes back by highlighting the fact that “Medicare for All” would cost the Federal Government $30+ trillion over the next ten years as costs currently born by individuals and employers (such as premiums, deductibles, copays) would be be assumed by the government.

Remember: these articles are citing the same study.

The key distinction, which Jacobin does describe to its credit, is the difference between “National Health Expenditures” (the total healthcare spending in a country from all sources including the government, individuals, and employers) and “Federal Health Expenditures” (the amount of money that the Federal Government spends on healthcare). Under “Medicare for All,” National Health Expenditures would decrease by $300+ billion over ten years through economies of scale and administrative efficiencies while “Federal Health Expenditures” would increase as the Federal Government assumes all healthcare expenses from individuals and employers.

Alright. So there is the difference. If the Federal Government pays, total healthcare costs might decrease by $300+ billion. However, Federal spending increases by $30 trillion. Got it.

So why is this a problem? To start, I would argue that we cannot begin to solve problems if we are talking past each other. Jacobin and the National Review, both, cherry-picked numbers that supported their sides. (I would note that in this particular instance, both sides were using the same set of facts. In that sense, we are luckier than usual.) Nonetheless, in so doing, they both glanced over the fundamental question of the debate: who should pay for healthcare.

To illustrate the point note that Jacobin, in reference to the requisite $30 trillion increase in Federal Government spending, says “this is more of an accounting thing than anything else” because new Federal spending would be funded through a new tax.

This is not just an accounting error. This is the entire debate. Should the Federal Government pay for all healthcare expenses? Is such a system more efficient than one with multiple payers (ie. individuals and employers)? What about individual choice? Is this increase in Federal Government spending sustainable given current debt pressures? Who would pay this new tax and what would be the economic repercussions? On a more philosophical level, what is a “right”—is it something the government must do or is it something that the government cannot do? There is a legitimate debate to be had here. However, we can’t begin to have the debate if we are talking past each other. If we are not reading the same sources and not relying on the same facts. If we are just reading headlines.

There is a glimpse of hope, however. Around the same time, Axios put out an article titled, “What single-payer health care would cost the U.S.,” which outlines this distinction quite well. Here’s to more sources like Axios.

Until then, we will have to live with the reality that “alternative facts” do in fact exist so long as we are getting information from sources that only confirm our ideological predispositions.

So I end by asking you: what are you reading?

If you enjoyed this article, you can read more bipartisan debates, op-eds, and interviews here.

Joseph Schuman
Editor-in-Chief at Divided We Fall

Joe Schuman is the Founder and Editor-in-Chief of Divided We Fall. He works to set the vision of the organization and to build the team to meet that mission. Joe works as a civilian for the Department of Defense promoting innovation and emerging technology. Joe is also an Officer in the Air National Guard and a graduate of the Massachusetts Institute of Technology. In his spare time he can be found reading non-fiction, playing piano, and running triathlons.

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