If single-payer advocates think their bill would save Americans
so much money, wouldn’t they want the Congressional Budget Office fully analyze
how much money people would save?
MAY 3, 2019
On Wednesday, the Congressional Budget Office (CBO) released a
30-page reportanalyzing a single-payer health insurance plan. While
the publication explained some policy considerations behind such a massive
change to America’s health care market, it included precious few specifics
about such a change—like what it would cost.
Sen. Bernie
Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking
member of the Senate Budget Committee. If he asked the budget scorekeepers to
analyze his legislation in full to determine what it would cost, and how to go
about paying for the spending, CBO would give it high-priority treatment.
But to the best of this observer’s knowledge, that hasn’t
happened. Might that be because the senator does not want to know—or, more
specifically, does not want the public to
know—the dirty secrets behind his proposed health-care takeover?
Hypothetical Scenarios
The CBO
report examined single payer as an academic policy exercise, running through
various options for establishing and operating such a mechanism. In the span of
roughly thirty pages, the report used the word “would” 245 times and “could”
209 times, outlining various hypothetical scenarios.
That
said, CBO did highlight several potential implications of a single-payer system
for both the demand and supply of care. For instance, “free” health care could
lead to major increases in demand that the government system could not meet:
An expansion of insurance coverage under a single-payer system
would increase the demand for care and put pressure on the available supply of
care. People who are currently uninsured would receive coverage, and some
people who are currently insured could receive additional benefits under the
single-payer system, depending on its design. Whether the supply of providers
would be adequate to meet the greater demand would depend on various components
of the system, such as provider payment rates. If the number of providers was
not sufficient to meet demand, patients might face increased wait times and
reduced access to care.
The report noted that in the United Kingdom, a system of global
budgets—a concept included in the House’s single-payer legislation—has led to
massive strains on the health-care system. Because payments to hospitals have
not kept up with inflation, hospitals have had to reduce the available supply
of care, leading to annual “winter crises” within the National Health Service:
In England, the global budget is allocated to approximately
200 local organizations that are responsible for paying for health care.
Since 2010, the global budget in England has grown by about 1 percent
annually in real (inflation-adjusted) terms, compared with an average real growth
of about 4 percent previously. The relatively slow growth in the global
budget since 2010 has created severe financial strains on the health care
system. Provider payment rates have been reduced, many providers have incurred
financial deficits, and wait times for receiving care have increased.
While
cutting payments to hospitals could cause pain in the short term, CBO noted
that reducing reimbursement levels could also have consequences in the long
term, dissuading people from taking up medicine to permanently reduce the
capacity of America’s health-care market:
Changes in provider payment rates under the single-payer system
could have longer-term effects on the supply of providers. If the average
provider payment rate under a single-payer system was significantly lower than
it currently is, fewer people might decide to enter the medical profession in
the future. The number of hospitals and other health care facilities might also
decline as a result of closures, and there might be less investment in new and
existing facilities. That decline could lead to a shortage of providers, longer
wait times, and changes in the quality of care, especially if patient demand
increased substantially because many previously uninsured people received
coverage and if previously insured people received more generous benefits.
That
said, because the report did not analyze a specific legislative proposal, its
proverbial “On the one hand, on the other hand” approach generates a distinctly
muted tone.
Tax Increases Ahead
To give some perspective, the report spent a whopping two pages
discussing “How Would a Single Payer System Be Financed?” (Seriously.) This
raises the obvious question: If single-payer advocates think their bill would
improve the lives of ordinary Americans, because the middle class would save so
much money by not having to pay insurance premiums, wouldn’t they want the
Congressional Budget Office to fully analyze how much money people would save?
During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar
residents of Bethlehem, Pennsylvania for single payer. The ostensible support
might have something to do with Sanders’ claim during the town hall that “the overwhelming
majority of people are going to end up paying less for health care because
they’re not paying premiums, co-payments, and deductibles.”
Where
have we heard that kind of rhetoric before? Oh yeah—I remember:
At least one analysis has already discounted the accuracy of
Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016
presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s
$10 trillion—hole in its financing mechanism.
Filling that hole with tax increases meant that 71 percent of
households would pay more under single payer than under the status quo, because taxes
would have to go up by an average of 20 percentage points. Worse yet, 85
percent of Medicaid households—that is, people with the lowest incomes—would
pay more, because a single-payer system would have to rely on regressive
payroll taxes, which hit the poor hardest, to fund socialized medicine.
Put Up or Shut Up, Bernie
If
Sanders really wants to prove the accuracy of his statement at the Fox News
town hall, he should 1) ask CBO to score his bill, 2) release specific tax
increases to pay for the spending in the bill, and 3) ask CBO to analyze the
number of households that would pay more, and pay less, under the bill and all
its funding mechanisms.
That
said, I’m not holding my breath. A full, public, and honest accounting of
single payer, and how to pay for it, would expose the game of three-card monty
that underpins Sanders’ rhetoric. But conservatives should keep pushing for
Sanders to request that score from CBO—better yet, they should request it
themselves.
Mr. Jacobs is founder and CEO of Juniper
Research Group, a policy consulting firm based in Washington. He is on Twitter:
@chrisjacobsHC.
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