Rice University: ‘Medicare for All’ Could Mean a Migraine For Most, Says Baker Institute Expert

HOUSTON, Texas, June 10 -- Rice University issued the following news release:

The Washington Post counts 12 of the 24 Democratic presidential candidates as favoring some version of a single-payer health care system. Many voters may not realize that "Medicare for All" doesn't just mean providing coverage to those currently without it -- it means all Americans would only have coverage for essential health benefits through a government program, according to a health policy expert at Rice University's Baker Institute for Public Policy.

Vivian Ho, the James A. Baker III Institute Chair in Health Economics and director of the Center for Health and Biosciences, is available to discuss the ramifications of single-payer health care with the news media. She outlined her insights in a new post for the redesigned Baker Institute blog that was unveiled this week, http://blog.bakerinstitute.org.

According to estimates from a George Mason University study, Medicare for All would increase federal budget commitments by $32.6 trillion during its first 10 years of implementation, from 2022 to 2031, said Ho, who is also a professor of economics at Rice and a professor of medicine at Baylor College of Medicine.

For perspective, the Congressional Budget Office projected federal outlays for 2020-29 (without Medicare for All) to be $57.8 trillion. That is, Medicare for All would represent an unprecedented increase in the size of the federal budget and likely the nation's debt, Ho said.

Could Americans who are currently insured expect the same quality and access to health care under a single-payer system? As high as the estimated cost of Medicare for All is, the study conservatively assumed that hospitals, physicians and other providers would be reimbursed at current Medicare rates for all of the care they would provide, Ho said.

"Most voters likely do not realize that private insurance reimburses providers much more generously than Medicare," she wrote. "One study of 21 frequent and costly services found that physicians received higher reimbursement for all of these services when provided to privately insured patients versus Medicare patients, and that the private insurance payments were 150% higher for 15 of these services.

"Another study found that commercial rates for hospital care are 89% higher than Medicare fee-for-service rates. Thus, maintaining similar access to health care providers for the currently insured under Medicare for All would require a substantial increase in Medicare fees, which would raise already enormous cost estimates even more."

Ho said the shift to Medicare for All could result in a "colossal migraine" for the majority of Americans who are happy with their current insurance coverage.

"In addition, physicians, hospitals and insurance companies would strongly resist legislative proposals that threaten their living standards, weakening attempts to introduce budget-friendly universal coverage," Ho wrote. "There is no doubt that the status quo in health care is unacceptable, and that we should introduce policies that make health care affordable and accessible to more Americans.

"But the fascination with Medicare for All is impractical, and it distracts us from finding solutions that are economically feasible and beneficial to individuals in need," she wrote. "Let's hope that our presidential candidates start providing us with workable solutions, so that Americans understand what they will be voting for in the coming elections."