Princeton Economist: Go Slow With Medicare For All

Feb. 22--Medicare for All is one of the most talked-about policy proposals of the 2020 Democratic primary -- but could it ever happen?

According to Paul Starr, a Pulitzer Prize-winning health economist who worked on the failed Bill Clinton health-care plan in the 1990s, the answer is: not any time soon. For one thing, extending the program for older and disabled Americans to everyone would consume so much of the federal government's resources, it would require massive tax increases and turn the government into "a health insurance company with armed forces," the Princeton economist said Friday at a health care cost conference held by the University of Pennsylvania's Leonard Davis Institute.

What's more, he noted, putting everyone on government health care would completely dismantle the highly profitable insurance industry while lowering payments to the medical industry -- both of which hold huge political sway.

Rather than proposing to dismantle a big chunk of the American economy all at once, he said, it would be smarter for the next president to find smaller yet still meaningful reforms that have a chance of getting through Congress. "Midlife Medicare," in which the eligibility age would gradually go lower than the current 65, would help millions of Americans without "destabilizing the rest of the system," he said.

There's good reason why the concept of Medicare for All has captured the public's attention, Starr said. The rising cost of health care and the threat President Donald Trump and Republicans pose to the Affordable Care Act have made health care top of mind for voters. Candidates know they must come up with a plan to address consumer anxiety about health care cost and coverage if they want to win votes.

The biggest and boldest of these plans is Medicare for All, proposed by Democratic front-runner Bernie Sanders. Not only would the Sanders plan put everyone on Medicare, it also would cover dental care, vision, and other services not currently covered by traditional Medicare.

During the most recent Democratic debate, Sanders pointed to a study in the medical journal Lancet that found a Medicare for All plan like his could save billions of dollars a year.

The analysis estimated the plan would result in a health care system that costs about $3 trillion a year, compared with current health care spending of $3.5 trillion, according to the Washington Post, which dug into the details of the new report. Other organizations have pegged a higher cost, ranging from $3.8 trillion to $4.2 trillion a year. But that assumes the health industry plays along, which is not likely even if a Democrat wins the White House.

The government would need to raise an additional $773 billion to pay for the plan, the Lancet analysis estimated. The study suggested that taxing employers and individuals, who would no longer be paying for private health insurance plans, could largely cover that cost, according to the Post.

Much of the savings in Medicare for All would come from the program's ability to regulate the amount it pays providers and hospitals -- which are staffed and built based on today's huge price tags. Salaries, construction plans, and debt payments all would take big hits.

Starr thinks lawmakers should focus on smaller reforms that could make a more immediate difference for people burdened by health care costs. In addition to incrementally lowering the Medicare eligibility age, he also said bipartisan agreement should be possible on surprise hospital bills, which have bankrupted people who have insurance but unknowingly used an out-of-network provider.

"It's not radical, but another big failure does not equal success," he said, quipping that if he could go back in time, he would have advised Clinton not to aim so high with his plan. "If we can get real, we can get moving."

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