Next year's election will be the most ideologically charged in decades. We said that under Obama, thinking that the left could not drift any farther out toward the edge of sanity than they had already done.
Sen. Kamala D. Harris of California said Tuesday that her vision for a “Medicare for All” program wouldn’t require a tax hike on middle-class Americans, and that her push requires a transition period of more than four years. That puts the 2020 presidential contender in line with advocates who say this sort of massive overhaul of the nation’s health care system would actually lower costs.
“I am not prepared to engage in a middle-class tax hike,” Ms. Harris said in an interview with CNN Tuesday. Asked whether people would no longer be able to carry private insurance, Ms. Harris suggested that would be the case. “They would eventually be covered under Medicare for All, and they would still see their doctor,” she said, adding that she believes it would take longer than four-year transition period under the Sanders plan.
Mr. Sanders has pegged the cost of his Medicare for All plan at $30 trillion to $40 trillion over 10 years. He has said he would have to raise taxes on the middle class to pay for his bill, and that it would take four years to transition into the program. “People who have health care under Medicare for All will have no premiums, no deductibles, no co-payments, no out-of-pocket expenses,” Mr. Sanders said in the first debate.
Pressed on whether she believes it can be done without that sort of tax hike, Ms. Harris said, “without a middle-class tax hike, yes, yes.” “There are ways to pay for it, also understanding the investment that we are going to be making in a way that is going to reap great benefits in terms of other costs,” she said.
would all but eliminate states’ role in health care, where they have been leaders not just in providing coverage, but also driving efficiency and testing new models of care. Those reforms — and the idea of states as laboratories of reform — would pretty much disappear, and the balance of federalism in health would fundamentally change.
It is outright comical to hear an advocate of socialized, single-payer health care cry over reduced federalism. Even if the states ran Medicaid entirely on their own, turning it into a single-payer system would centralize massive amounts of power and economic resources into the hands of government. The only difference is that it would happen at the state level.
Altman's tears over federalism are not tears over the loss of American constitutional principles. They are tears in defense of some government bureaucrats over others.
With that in mind, let us take a look at some numbers that explain why Senator Harris is wrong and Senator Sanders is right: you cannot socialized health care in America without crippling tax hikes.
In order to be able to pay for all health care that Americans consume without having to raise taxes, Kamala Harris and her Democrat cohorts will have to hope and pray that the consumption of health care does not grow faster than the tax base that is supposed to fund it. Unfortunately, history is not on their side. As Figure 1 explains, total national health expenditures have outgrown their tax base since at least 1960:
Source: Center for Medicare and Medicaid Services (health care costs); Bureau of Economic Analysis (GDP)
Since Medicaid-for-All proponents continuously say that nobody will have to give up any health care, they only have two ways to get to a single-payer system: break the promises of no tax hikes, or ration health care.
The latter option is easy to illustrate. Suppose we had created Medicaid for All in 1960 and therefore capped the growth in health care consumption to the growth in private-sector GDP (the broadest possible tax base). Figure 2 explains:
After ten years, in 1970, Americans would have had 28 percent less health care to utilize. After 20 years, in 1980, more than 43 percent of their actual health care consumption would have been gone. By 1982 half the American health care system would have been missing.
It is only downhill from there. In 2017 Americans would have had access to 28.4 percent of the health care they actually enjoyed that year.
Since 1960, there has been a significant change to the nature of the technology used in U.S. health care. Starting in the mid-1980s prescription medicine began dominating this expenditure category, rising for 40 cents of every med-tech dollar in 1984 to two thirds of all med-tech spending today. During the same time, the share that goes to medical equipment has declined.
This does not mean that we spend less on durable medical equipment. All it means is that prescription drugs have risen to a prominent position within our health care system, and that this has affected health care costs. We can debate the usefulness of pharmaceutical products all day long - and some people will do so - but the fact of the matter is that modern pharmaceutical products generally provide us with much better treatment options than were available only half a century ago. Therefore, it is not insignificant to propose measures to curb the rise in pharmaceutical-drug costs within our health care system.
Sources: Center for Medicare and Medicaid Services (med-tech); Bureau of Economic Analysis (GDP)
We have a similar situation here as with national health expenditures in general: if we tied growth in prescription-drug spending to the broadest possible tax base, under the 1960 socialized-medicine scenario, by 2017 we would have had to forfeit 69 percent of all prescription-drug spending.
Is it possible to negotiate away that much of the current costs without in any way affecting the treatment quality of pharmaceutical products? The usual "buy generics" does not work: generic products ride on the research and development efforts of the original patent holders. How many of those patents would we get if we cut away more than two thirds of the money we spend on prescribed medications? Most of them? Some? A few?
For the sake of the argument, though, let us assume for a moment that we can indeed preserve treatment quality in prescription drugs and still slash costs by more than two thirds. If we look at 2013 alone, we would have had to cut total health care expenditures by $2.38 trillion in order to keep our health care system within Kamala Harris's no-tax-hike pledge. A two-thirds reduction in the spending on prescription drugs would only have saved us $231 billion. Adding the equally pie-in-the-sky'ish idea that we could completely eliminate administration, we have still only reduced national health care costs by $274.5 billion.
We are now down $505.5 billion. How is Kamala Harris going to come up with the remaining $1.87 trillion?
Simple. Rationing. She is going to give every American the right to all health care they need, but that does not mean every American will actually get all the health care they need. As an experiment, let us spread out the $1.87 trillion across the items that constitute health care consumption. This 56-percent reduction in health care spending would have to deny access to health care for 182 million Americans - or;
Reduce funding for our hospitals by $640 billion;
Remove $2.2 billion from Indian Health Services;
Take $2.9 billion away from school health programs;
Cut Americans' dental care by $72.3 billion;
Slash public-health programs by $49.8 billion;
Take away $28.4 billion from health care research;
Cut $54.3 billion from home health care;
Eliminate more than $93 billion in funding for nursing care facilities;
Reduce spending on medical technology by another $100 billion.
These figures are all obtained from raw data provided by the Center for Medicare and Medicaid Services under the Department of Health and Human Services. They are, again, calculated from the gap that remains in Kamala Harris's no-tax-hike single-payer Medicaid-for-All plan - after we have eliminated all administration and 69 percent of all spending on prescription drugs.
Do you still want single-payer health care?