Koch-backed study finds ‘Medicare for All’ would save U.S. trillions

Addy Baird

Addy Baird Reporter, Think Progress

A single-payer Medicare for All system would reduce the amount the U.S. spends on health care by more than $2 trillion, a Koch brothers-funded study released Monday found.

Research by the Mercatus Center at George Mason University — a libertarian think tank backed by the Koch brothers — projected that the Medicare for All plan championed by Sen. Bernie Sanders (I-VT) would cost the government $32.6 trillion over 10 years. The highly critical report found that even doubling all federal individual and corporate income taxes would not cover the costs of Sanders’ Medicare for All plan.

The study did conclude, however, that Medicare for All would result in significant savings for the government because of lower prescription drug costs, saving $846 billion over the next decade. Streamlined administrative costs under the plan would save another $1.6 trillion, the researchers at the Mercatus Center found.

When we talk about a Medicare for All system, it’s important to discuss the costs in the context of what the U.S. already spends on health care. As of 2016, national health expenditures — which includes federal spending, state Medicaid programs, and private employer health care spending — totaled $3.3 trillion per year, according to the Centers for Medicare and Medicaid Services.

That means that over the next decade, the U.S. is projected to spend more than $33 trillion, plus inflation, on health care services without any changes to our current health care system, significantly more than Mercatus’s estimated $32.6 trillion cost to the federal government over the next ten years.

Sanders’ proposed single-payer plan would be free at the point of service, and would not include any cost-sharing — that is, no co-pays or premiums. Under his plan, taxes would replace those often high costs, which currently are shouldered by patients.

Research from March of this year found that the present system has left 15.5 percent of adults between 19 and 64 without health insurance, while more than a quarter of lower-income families are uninsured. Monday’s study concluded that not only would Medicare for All provide insurance for the millions of Americans currently without coverage, but it would also save the the United States $2.054 trillion over the next decade.

In a comment to Fox News, Sanders took exception to the report’s conclusion Medicare for All would lead to a drastic increase in taxes, calling the study “grossly misleading and biased.” He noted, too, that that the center is funded by the Koch brothers, who known for their fierce advocacy of libertarian policies.

“If every major country on earth can guarantee health care to all, and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States cannot do the same,” Sanders told Fox News.

The immediate response to the Mercatus study focused mostly on its eye-popping $32.6 trillion estimate. Too often, as much of the pundit and politico chatter proved Monday, the cost is where conversations about single-payer both begin and end.

Harping on the costs of the plan without discussing its benefits is a favorite tactic of the right, but centrist Democrats have a history of falling into the same trap. Former Clinton administration adviser Kenneth Thorpe, for example, talked up the high price tag of singer payer as highlighted by the Mercatus analysis Monday.

“It’s showing that if you are going to go in this direction, it’s going to cost the federal government $2.5 trillion to $3 trillion a year in terms of spending,” Thorpe told the Associated Press on Monday. “Even though people don’t pay premiums, the tax increases are going to be enormous. There are going to be a lot of people who’ll pay more in taxes than they save on premiums.”

What no one seems to mention is what that money is paying for.

Ultimately, Sanders’ Medicare for All plan would provide comprehensive coverage for all residents of the United States, including primary and preventative care, emergency and hospital services, maternity and newborn care, prescription drugs, substance abuse and mental health services, as well as pediatrics, laboratory, and diagnostic services. The plan also guarantees dental, vision, audiology, and abortion coverage.

Access to services like primary and preventative care will greatly decrease emergency room overuse, and expansive maternal care might help a country that boasts the unfortunate title of having the worst maternal death rate in the developed world.

The point is this: The resistance to single-payer, especially among establishment Democrats, is really just resistance to changing the status quo. The Democratic party is supposed to be the one that believes government can and should help people. Single-payer, as Monday’s study confirmed, is the best way to do that — while also saving the government trillions of dollars!

The status quo is already changing, anyway. Just two and a half years ago, it was former Secretary of State and future Democratic nominee Hillary Clinton who argued that “people who have health emergencies can’t wait for us to have a theoretical debate about some better idea that will never, ever come to pass.”

The irony, of course, is that in 1994, Clinton said she believed that by the start of the next decade, the U.S. would have a single-payer system. “I don’t even think it’s a close call politically,” she told reporters at the time. “I think the momentum for a single payer system will sweep the country… It will be such a huge popular issue… that even if it’s not successful the first time, it will eventually be.”

At any rate, Sanders’ plan wouldn’t leave people with health emergencies waiting. According to legislation he introduced last fall, Medicare eligibility would expand over the course of four years and slowly transition people from private to fully public health care coverage.

In the first year, people aged 55 and older, as well as those younger than 18 would become eligible for Medicare. The second year, eligibility would extend to people older than 45, and then to people older than 35 in year three. By year four, everyone would be eligible for Medicare.

A slew of possible 2020 Democratic presidential candidates and other high-profile figures in the party have expressed support for the measure now, too. Sanders’ Medicare for All Act of 2017 introduced last September was co-sponsored by Sens. Elizabeth Warren (D-MA) , Brian Schatz (D-HI), Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), Mazie Hirono (D-HI), Kamala Harris (D-CA), Edward Markey (D-MI), Jeff Merkley (D-OR), Tammy Baldwin (D-WI), Sheldon Whitehouse (D-RI), and Richard Blumenthal (D-CT).

Single-payer — and socialism in the United States more generally — got another big boost last month when Alexandria Ocasio-Cortez pulled off an upset victory in her primary against Rep. Joe Crowley (D-NY). Not long after Ocasio-Cortez’s victory, actress-turned-activist Cynthia Nixon, who’s challenging New York Gov. Andrew Cuomo in the state’s upcoming Democratic gubernatorial primary, endorsed Medicare for All, too.

Nixon is one of a dozen candidates for governor across the country who supports a single-payer system. Congressional candidates running this cycle — including Ocasio-Cortez, Kara Eastman in Nebraska and Gina Ortiz Jones in Texas, among others — have already made Medicare for All a winning issue.

Just days before the release of the Mercatus study, Ocasio-Cortez was asked about the costs of a single-payer system in an interview with Daily Show host Trevor Noah. She argued that the problem with instituting single-payer isn’t actually its high cost, but rather a resistance to change.

“A lot of what we need to do is reprioritize what we want to accomplish as a nation,” she said. “Really, what this is about is saying, health care is important enough for us to put first. Education is important enough for us to put first. And that is a decision that requires political and moral courage, from both parts of the aisle. Period.”

This story has been updated to clarify that savings achieved under Sanders’ proposed Medicare for All bill would affect all national health expenditures, including private employers, and state Medicaid programs, not just federal health care spending.

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Reposted from Think Progress

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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