‘Medicare for All’ Isn’t Medicare

Democrats mislead voters by appropriating the name of a popular program they actually seek to abolish.

While most of Washington has been obsessed with the Mueller report, serious foreign policy issues are coming to the forefront in these two countries. WSJ’s Gerald F. Seib explains. Photos: Getty

More than 100 House Democrats have endorsed Rep. Pramila Jayapal’s Medicare for All Act of 2019. Fourteen Democratic senators have co-sponsored a similar bill from Sen. Bernie Sanders.

The title is deeply misleading. It implies that the current Medicare system would be extended to all Americans. In fact, Medicare for All differs from Medicare in fundamental ways—with much broader coverage, no cost sharing, and fewer choices of health-care plans. While America needs a debate about health care, it should be based on an accurate description of the alternatives.

Medicare for All would cover a panoply of dental, vision and mental-health services not covered by Medicare. Under the latest version of the House bill, the federal government would also pay for all long-term nursing and home care—estimated by the Urban Institute to cost roughly $3 trillion over the next decade.

The program would replace Medicare, Medicaid and the Children’s Health Insurance Program, as well as all employer-sponsored insurance and direct individual insurance (including the ObamaCare exchanges). It would cover not only uninsured American citizens but every U.S. resident—potentially including illegal as well as legal immigrants.

Despite this substantial expansion of coverage, Medicare for All would not require beneficiaries to contribute premiums, deductibles or copayments. By contrast, most parts of Medicare require some form of cost sharing by patients. Medicare Part B, for outpatient medical expenses, has a standard premium of $1,626 a year with an annual deductible of $185, plus a 20% copayment, according to the official Medicare website.

Because of the broad coverage of services and patients without cost sharing, Medicare for All would entail dramatically higher federal spending on health care than Medicare and other programs. There have been several estimates of the incremental cost over 10 years of Mr. Sanders’s 2016 proposal, which did not include long-term care—$27.3 trillion by the Center for Health and Economy, $28 trillion to $32 trillion by former Social Security and Medicare trustee Charles Blahous, and $24.7 trillion by Emory Professor Kenneth Thorpe. The Urban Institute estimate, which included long-term care, was $32 trillion over 10 years.

Proponents counter that the proposal would reduce federal health-care spending in three main ways—lower drug prices through government negotiations, lower reimbursement rates for medical services, and lower administrative costs by eliminating insurance companies. They also argue the proposal would increase federal tax revenue by repealing the deduction for employer-provided insurance. But these four factors are already built into the previous estimates. However you cut it, Medicare for All would inevitably lead to massive tax increases.

Neither the House nor the Senate bill includes much detail on financing higher federal spending. Mr. Sanders’s staff released a paper in April with revenue options—imposing a premium tax on employers and employees, increasing the top income-tax rate, imposing a wealth tax, closing tax loopholes and so on. But the paper does not address the budget implications of these options or the challenges of getting them through Congress.

Medicare for All would also replace Medicare’s current method of paying fees for services to every hospital, nursing home and other institutional provider. Instead, a new federal board would set an annual budget for each provider, which would receive one lump sum for current operations and another for capital expenditures. That board would be expressly forbidden by current Medicare for All bills from using quality metrics—which would be necessary to prevent providers from skimping on quality with lump-sum payments.

All this would force a radical change in the current business models of most hospitals and other Medicare providers. Although they would generally have discretion over how to spend their lump-sum payments, they could not use them to make “profit or net revenues.” Yet each provider would bear the risk if these payments were insufficient to cover actual costs. Many hospitals would limit the volume or scope of their services until they were sure they would break even for the year.

Finally, Medicare for All would eliminate the plan choices Medicare now allows. Elderly Americans don’t have to get outpatient or drug coverage from the government. Some opt to stay with their employer plans and others choose private providers through Medicare Advantage. Medicare for All would prohibit any insurer or employer from privately offering any services covered by this legislation—which means essentially all medical services.

Medicare for All allows even less in the way of plan choice than other single-payer systems. In the United Kingdom, patients may purchase private insurance for medical services even if they are available through the National Health Service. Canada does not cover dental, vision or long-term care, so two-thirds of Canadians purchase these services through private health insurance.

In the coming debate over health care, the label “Medicare” should be reserved for proposals that are built on the existing structure of this successful program. Whatever else “Medicare for All” may be, it isn’t Medicare.

Sen. David Perdue: Mitt Romney makes the same mistake that cost him the White House

With his attempted character assassination of the president, a fellow Republican, Romney put self-interest ahead of the larger national interest: conservative Republican governance. The op-ed brought to mind 2012, when many Republicans chose to divide the party by continually bashing each other. Romney eventually discovered that many discouraged GOP voters decided to stay home on Election Day.

Like others who have run for president and failed, Romney has taken a stance that smacks of jealousy and resentment. It does nothing but serve the radical liberal left and further divides conservatives.

As the only former chief executive of a Fortune 500 company in Congress, I was initially thrilled by the prospect of welcoming another business guy to the Senate. But Romney’s behavior — before he was sworn in or cast his first vote as the new senator from Utah — was deeply disappointing.

He ran to the media instead of picking up the phone. That is exactly what is wrong with Washington. Too many career politicians focus on finger-pointing for their own self-interest rather than on getting results.

We have seen what a divided party means for Republicans. It means we help put Democrats in charge. It means we help them advance their radical liberal agenda, which has proven to fail the very people they claim to champion: the working women and men of America.

Conservatives know that bigger government, higher taxes and single-payer health care should not be the way forward. It’s fiscally and socially irresponsible.

The mainstream media and Democrats want to further divide Republicans, and now Romney has played right into their hands. Jeff Flake (Ariz.) filled that role before his retirement; the last thing we need now in the Senate is a Jeff Flake on steroids. We certainly don’t need more distractions. We need constructive leaders who want to get things done.

Like many other leaders in history, Trump is certainly an unusual president. He does not fit the typical mold of a Washington politician. That is exactly why the American people, fed up with business as usual, elected him.

The presidency is bigger than any one individual. It is about providing a vision and executing an agenda to advance all Americans. Criticism of the president or his policy decisions is, of course, not off-limits. But I believe it is much more productive to have candid conversations behind the scenes.

The Republican agenda is working. Just look at the results. As the news about employment and wages on Friday confirmed, over the past two years, the United States has undergone an astonishing economic turnaround. The economy is growing at twice the rate it did under President Barack Obama. More than 4.4 million new jobs were created in 2017 and 2018 . Middle-class income is at an all-time high. Overall unemployment is the lowest in 50 years, and African American, Hispanic and Asian American unemployment is at historically low levels.

Clearly, this president understands that his primary role is to protect Americans. He is strengthening the military and reasserting U.S. leadership around the world. These results would be absolutely celebrated if anyone else were president. Instead, “the resistance” has spread from the political extremes to the media and now to the Republican Party itself.

Imagine if Romney had been elected president and removed hundreds of regulations, passed a historic tax bill, made the United States’ NATO allies pay their fair share, negotiated a new trade deal with Mexico and Canada, and stood up to China. Would he have been met with this type of resistance? Of course not.

We are on track to change the nation’s direction for the better. We are on track to restore economic opportunity, fiscal responsibility, limited government and individual liberty. I hope Romney, who plans to caucus with Republicans, will reconsider continuing his harmful behavior as he begins his Senate career.

Instead, I hope he will join me as one of the few business-minded leaders who can stay focused on getting the job done.

No, Single-Payer Reforms Won’t Curb Hospital Costs

Reforms that eliminate barriers to hospital competition are a much smarter option.

.. In an attempt to quantify the rough fiscal impact associated with having the federal government take up all health-care costs currently borne by private insurers, employers, and individuals, Blahous accepted the assumption made by Senator Bernie Sanders and other single-payer proponents that the reform could save billions by purchasing services from hospitals at Medicare rates.

Although Blahous’s study estimated that Sanders’s “Medicare for All” proposal would impose a fiscal burden of $32 trillion (yes, trillion) over ten years and a likely annual tax increase of $26,000 per American household, single-payer advocates have been thrilled by its publication, seizing on its comparison between the estimated cost and expected private health-insurance spending over that ten-year period to argue that it would actually save Americans $2 trillion.

This “finding” is merely the result of a preposterous assumption: that because Medicare currently pays 40 percent less than private insurers for hospital services, the cost of delivering hospital services to the privately insured could be proportionately reduced simply by having the government rather than insurers pay hospitals for them.

.. Hospital prices do not reflect marginal costs involved in treating each patient, so much as attempts to spread daily running costs over all patients. It is therefore possible for Medicare to pay hospitals 87 percent of their average costs so long as private insurance pays 144 percent of their average costs. But such an arrangement would clearly not be sustainable if all rates were brought down to Medicare levels, as Medicare rates are below average costs at two-thirds of hospitals.

Although it is true that hospitals are often able to reduce their costs across the board when payment rates are cut, reducing costs means cutting staff and closing departments, which unsurprisingly tends to come at the expense of quality and access to care. For instance, following the reductions in hospital-payment rates made by the 1997 Balanced Budget Act, relative heart-attack mortality rose at the facilities subjected to the steepest cuts. Hospitals across rural America are already struggling financially, and it is fantastical to imagine that substantial savings can be gained without widespread closures. Americans, 77 percent of whom are happy with their own health-care arrangements, are unlikely to tolerate the collapse of services at their local hospitals.

.. While it is hard to imagine that a majority of the House and Senate will ever vote for a comprehensive rationing scheme that would also more than double federal taxes for most households, incremental proposals such as a Medicaid buy-in may be likely if there is a Democratic landslide in 2020. 

The Health Care Cul-de-Sac

What are the biggest threats to the American Dream right now, to our unity and prosperity, our happiness and civic health?

First, an economic stagnation that we are only just now, eight years into an economic recovery, beginning to escape — a stagnation that has left median incomes roughly flat for almost a generation, encouraged populism on the left and right, and made every kind of polarization that much worse.

First, an economic stagnation that we are only just now, eight years into an economic recovery, beginning to escape — a stagnation that has left median incomes roughly flat for almost a generation, encouraged populism on the left and right, and made every kind of polarization that much worse.

.. And if the Democrats, having blown up the insurance system once to implement Obamacare, really rallied around a Bernie Sanders-style proposal to do it all over again but on a bigger scale? Then not only would 2020 be a health care election, but if the Democrat won, the next two years would be consumed by outlandish single-payer expectations.

Where would that leave our two big problems, stagnation and the social crisis?

.. But when your main challenges involve men who aren’t working, wages that aren’t rising, families that aren’t forming and communities that are collapsing, constantly overhauling health insurance is at best an indirect response, at worst a non sequitur.

.. Democrats, meanwhile, could let single-payer dreams wait (or just die) and think instead about spending that supports work and family directly. They could look at proposals for a larger earned-income tax credit, a family allowance, and let the “job guarantee” and “guaranteed basic income”factions fight things out. If they want to go big in 2020, they could run on wage subsidies and public works, not another disruptive health care vision.

.. The country has bigger problems than its insurance system. It’s time for both parties to act like it.

GOP senators are rushing to pass Graham-Cassidy. We asked 9 to explain what it does.

The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.

..  The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.

Sen. Pat Roberts (R-KS):

“If we do nothing, it has a tremendous impact on the 2018 elections”

.. as a general rule the states do things better than the federal government does [things]. And that is essentially what the bill is

Jim Inhofe

..  I think the efficiencies that come with transferring the funding to the states can very well make up the difference between what the federal thing would be.

Sen. Ted Cruz (R-TX):

“It lets states innovate and adopt creative solutions”

the heart of the legislation takes the policymaking role of Washington and sends it to the states. It lets states innovate and adopt creative solutions to local problems, which vary state by state.

Jeff Stein

But it’s not just devolving power from the federal government to the state. It also involves a 16 percent cut in federal spending [upfront] and a 34 percent cut over the next 10 years.

.. Ted Cruz

CBO’s analysis throughout this process has been ridiculously slow, unreliable, and based on policy assumptions that are demonstrably false.

Jeff Stein

You really believe that cutting federal spending by 34 percent will not result in any other people losing their insurance?

Ted Cruz

What federal spending is cut?

Jeff Stein

Well, the Medicaid expansion would be sunset, for one, is my understanding.

Ted Cruz

The decrease in future rates of growth is not a cut. And it is only in the bizarre world of Washington that billions more money is characterized in the press as a cut rather than an increase, which is in fact what it is.

Sen. John Kennedy (R-LA)

.. I have sent four amendments to Lindsey [Graham] and Bill [Cassidy] that I think will strengthen the bill. The one I feel most strongly about is that I want the Medicaid work requirement — I don’t want it to be optional; I want it to be a requirement. Just like we did with welfare reform.

.. number two, I want to get us to give guardrails to the states to say, “You cannot use these moneys to set up a state-run single-payer system.” I don’t believe in it. I think it’s a mistake.

[Guardian reporter] Lauren Gambino

Do you think that kind of goes against the idea of states’ rights and being able to use this money [as the states want to]?

John Kennedy

No, no. We have plenty of federal rules that apply to every state, but we still agree with states’ rights.

John Kennedy

I think it spends scarce resources in a more rational manner. It will control costs. I like the idea that it encourages states to innovate.

Jeff Stein

How does it do that? Any of those things?

John Kennedy

Well, you need to read the bill.

Jeff Stein

Well, you’re voting for it, right? So what is the explanation for how it does those things?

John Kennedy

I am. Because it gives states added flexibility. Read the bill and you’ll understand.

 ..

Jeff Stein

The bill would cut federal funding to states by 34 percent over the next —

Richard Shelby

But it wouldn’t cut Alabama, though.

Jeff Stein

Well, do you think the other states should deal with —

Richard Shelby

Well, you see some of our states, four of our states, are getting a disproportionate amount of money from health care now. You know which ones.

.. Sen. Johnny Isakson (R-GA)

Jeff Stein

What is the policy explanation for the Graham-Cassidy health care bill?

Johnny Isakson

Policy explanation? I’m not into policy, so I don’t really know. I’m into facts.

Jeff Stein

[In a follow-up interview hours later on Tuesday] You were joking earlier, but what is the health policy in the Graham-Cassidy proposal that you like?

Johnny Isakson

More state innovation. More input from the states.

.. Johnny Isakson

The governors — I’m from a state that didn’t expand Medicaid, and the way we were going in health care looked like those states would actually be hurt worse than other states.

By going to block grants, back to the states, the control of money stays with the states, and you have less [un]predictability and external deviation in terms of funding.

.. Jeff Stein

So just a follow-up on that. It’s one thing to say the bill gives the states power — that’s one thing.

But it doesn’t just do that. It also cuts the money they have — some estimates say around 16 percent of federal funding.

Johnny Isakson

I’m not going to confirm that statement one way or another. I don’t know what the numbers are going to end up looking like.

Jeff Stein

Right, but if it does cut federal spending overall, would you support it?

Johnny Isakson

You know, those are dangerous questions. I’m waiting until I see the totality of the legislation to say whether I support the whole thing or not, anyway.

I’m not a no, but I’m not a yes either — and I’m waiting for my governor to respond to me with their input as well. It’s really key what they’re doing.

.. Sen. John Barrasso (R-WY):

“The governors who decided to expand [Medicaid] knew that they were going to lose federal funding”

..

Jeff Stein

I want to ask, in a big-picture way: What is the policy explanation for how this bill makes people’s lives better?

John Barrasso

It gets the money out of Washington, lets people at home make the decision, and gets state legislatures involved, and governors involved. It moves money out of Washington. It’s away from socialism.

Jeff Stein

CBPP says it will also reduce federal health spending on Medicaid and the exchanges by about [20] percent.

John Barrasso

I’d love to reduce federal spending on health insurance.

Jeff Stein

Right, but so it’s not just about moving power to the states — it’s also about cutting funding.

John Barrasso

It’s about moving power to the states, where money can be spent much more effectively.

Jeff Stein

How does it do that?

John Barrasso

Well, you have to read the formula and read the bill, and it will tell you how it moves money to the states and how much they get and how much they don’t get. …

Jeff Stein

There’s a concern from Republican governors who have come out and said, “This is too dramatic a cut in spending; we won’t have enough money to insure everyone.”

John Barrasso

You have to interview them on that.

Jeff Stein

Do you think they’re wrong?

John Barrasso

Well, it depends on if they’re states that expanded Medicaid or not. …

Jeff Stein

In the Medicaid expansion states, they still have a lot of people who rely on Medicaid expansion for health insurance.

John Barrasso

I opposed Medicaid expansion. I think the Supreme Court got it wrong [when it ruled in 2012 that Congress did have the constitutional authority to implement most of Obamacare].

The governors who decided to expand [Medicaid] knew that they were going to lose federal funding over time, and they’re objecting to that — but they knew it. You could say, “Some of them didn’t understand it, and so-and-so wasn’t there, and he wasn’t governor yet,” but they understood that this would be part of the process. So if they used the money poorly —

And my concern with Medicaid is that the people who Medicaid was designed for originally have been cut out of the process, because they’re still on the waiting list to get on Medicaid. I don’t know how much you understand about Medicaid, but this whole expansion of Medicaid went for healthy, working-age individuals — it did not go for the people who [Medicaid] was designed for, which was low-income women, children, and the disabled.

.. Sen. Chuck Grassley (R-IA):

“This is the last attempt to do what we promised in the election”

.. Chuck Grassley

Let me give you a political answer, and then I’ll give you a substance answer.

The political answer is that Republicans have promised for seven years that we were going to correct all the things that were wrong with Obamacare, and we failed the first eight months. This is the last attempt to do what we promised in the election.

The substance answer is that Obamacare starts with the principle that all knowledge about health care, and all decisions on health care, ought to rest in Washington, DC. The complete opposite of that is Graham-Cassidy, that Washington doesn’t know best and we’ll let each of the 50 states [decide what’s best].

‘Medicare for All’ Isn’t Sounding So Crazy Anymore

To be able to deliver on its promises, single payer would not only require trillions in new revenue through higher taxes, but also huge cost savings from slashing payments to drug companies, doctors and hospitals. “There are a million and one complexities” to single payer that no one has really dealt with, said Dean Bake

.. Senator Sanders went out of his way to list all the tax hikes he’d use to pay for his 2016 proposal, including an across-the-board 2.2 percent income tax. But two prominent policy analysts said the plan would cost about twice as much as the senator claimed.

.. But many advanced, industrialized democracies with universal coverage don’t have a pure single-payer system. France, for instance, has health care for all that is largely state-financed, but most people also buy private supplemental coverage.

.. Mr. Baker believes the top priority is a credible transition plan. “If you just take everyone with employer-provided insurance and put all of them on a public plan, you’re going to freak people out,” he said. He’s interested in reviving the public option — a government-run plan that would compete with private insurance on the exchanges — as well as opening up Medicare or Medicaid to those who want to buy in.

.. Democrats risk making the same mistake on health care as Republicans: big promises without a plan to follow through.

Why Wasn’t Trumpcare More Popular?

Conservative health-care analysts on why the GOP couldn’t come up with a stronger replacement for Obamacare

.. outside groups—he implicated Heritage Action and Club for Growth—were urging Republicans to repeal Obamacare as quickly as possible. Because of that, House Republicans “didn’t give themselves enough time

.. “Repeal and replace” seemingly meant different things to different Republicans. Moderates wanted to protect the law’s more popular provisions while tweaking its subsidy structure.

.. the AHCA was authored in a way such that it would cut federal spending—the goal of conservative Republicans—not necessarily boost health-care coverage.

.. a 1989 plan from the Heritage Foundation—the one that started it all—also included tax credits and an individual mandate.

.. “The original outline was their idea!”

.. That’s because there are two basic models for health systems, Laszewski says: single-payer or Obama/Ryan/Trump/Heritage/PriceCare. One is a government-run system offers a rudimentary plan to everyone. The other one is a delicate Jenga tower of mandates, credits, and incentives, all balanced on the rickety table of the private-insurance industry.

.. Republicans had to go with the AHCA, that is, because there just aren’t that many other, non-socialist ways to do health insurance coverage.
.. Ultimately they settled on Obamacare, helping the poor at the expense of the better-off, while the AHCA would have done the opposite.
.. “We used to say Republicans didn’t have the health-care gene,”