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Sanders’s single-payer plan overpromises on health care — again

The Hill logo The Hill 9/13/2017 Hadley Heath Manning, opinion contributor
Sanders’s single-payer plan overpromises on health care — again © Provided by The Hill Sanders’s single-payer plan overpromises on health care — again Americans are familiar with political promises on health care: lower costs, universal coverage, more fairness, more choice and so forth. Sadly, we are also used to these promises being broken, time and time again. But that doesn't stop politicians from making ever-greater promises to create an utopian healthcare system where all Americans get all the care they need without any significant costs or downsides.

The latest such proposal is Sen. Bernie Sanders's "Medicare for all" plan. It would create a single-payer health system where the federal government pays all health bills for all citizens, and it would be funded by trillions of dollars of tax increases. The projected 10-year cost of his plan is $32 trillion. (That's $32,000,000,000,000.)

Although Congress just comprehensively reformed our national health policy in 2010 with the Affordable Care Act, the issue is once again ripe for discussion. America has arguably the best quality of health-care services available in the world, but many Americans across the political spectrum are rightly frustrated with our convoluted health-care payment structure today.

Most Americans do not choose their own insurance plan but accept the one their employer offers, thereby also accepting the provider network associated with the insurance plan. This means we have very little consumer choice. Even then, we don't know what to expect to pay when we consume health services, because in addition to unaffordable (and ever-increasing) insurance premiums, we face additional out-of-pocket costs and unclear, confusing prices.

But single payer is not the answer. History shows us that projections often underestimate the costs and overestimate the benefits of government healthcare programs.

Take Medicare as an example: Medicare, which began in 1965, was initially expected to cost $9 billion annually by 1990. This initial cost projection was woefully inaccurate. The actual annual cost of the program in 1990 was $67 billion, and last year (2016), the U.S. spent $588 billion on Medicare alone.

Sen. Sanders wisely bases his single-payer plan on Medicare because the program has high satisfaction ratings and has traditionally been able to sweep its budgetary problems under the rug. But a peek under the rug reveals a hole threatening to suck the entire federal budget into it. The program is expected to be bankrupt by 2029.

Medicare's ballooning budget is a concern, and not just for fiscal conservatives on the right. Democrats tacitly admitted Medicare needed budget controls when they passed the Affordable Care Act, which included the Independent Payment Advisory Board or IPAB.

This unelected board will be tasked with reducing per-capita Medicare spending, which will inevitably mean lower reimbursements to health providers for certain services they provide to Medicare-insured seniors.  This will result in backdoor rationing of health services as prices dip below what many providers will accept. The IPAB process has not yet been triggered, but Medicare's actuaries estimate that this will happen in 2021.

The Affordable Care Act has also failed to live up to expectations: This summer, the Centers for Medicare and Medicaid Services updated their per-capita cost projections for the Medicaid expansion to be 50 percent higher than previous projections. And as private insurance premiums continue to rise at double-digit rates each year, so do the costs of the ACA premium-assistance tax credits and subsidies for income-eligible consumers in the exchanges.

The coverage projections for the ACA were also off. The Congressional Budget Office projected that 24 million Americans would enroll in the law's exchanges in 2017. How many people actually did? Only half of that: 12.2 million. The overall coverage figures only appear larger when Medicaid's exploding enrollment is considered.

Of course, there are problems in the way we pay for health insurance, and those lawmakers and advocates who suggest change are doing so with good intentions. We need more choices and lower costs (which will only come as a result of market competition). Single payer would only take us in the opposite direction, eliminating market competition and choice, and driving up costs until the inevitable result - restricted access through rationing. This is the case in other nations with single-payer, and it may soon be the case with Medicare if the IPAB process is triggered.

Given the problems in Medicare, Medicaid, and the Affordable Care Act, Americans should hesitate before falling for yet another expansion of government in the business of paying for health-care services.  

Hadley Heath Manning is the director of health policy for the Independent Women's Forum. Her work has been featured in The Wall Street Journal, Forbes, POLITICO, Roll Call, Real Clear Policy, National Review Online, and Huffington Post, among others. Manning is also the Tony Blankley Fellow at the Steamboat Institute.

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