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What Trump gets wrong about 'Medicare for all'

Rick Newman
Senior Columnist

President Trump lit into the Democrats’ “Medicare for all” plan in a USA Today op-ed this week that itself has been panned for several Trump inaccuracies.

“Medicare for all” was part of Bernie Sanders presidential platform in 2016 – when he was one of the few politicians willing to back the idea. But since then, health care has emerged as a more potent political issue, in part because of Republicans’ repeated efforts to kill the Obama-era Affordable Care Act, which about half of Americans now support (with 40% disapproving). Health-care costs also continue to rise by more than inflation, taking an ever-bigger bite out of the family paycheck, with no solutions in sight.

Democrats are making better health care a top campaign theme in this year’s midterm elections, with some of them touting “Medicare for all” as the answer. But this is more of a slogan than a plan at the moment, since there are several pieces of legislation that would expand Medicare beyond those 65 and older, and the details vary considerably.

Trump referred to a Sanders-style plan in which all private-sector insurance — including employer-provided insurance, which is how half of Americans get coverage – disappears, with everybody being covered by a government-run plan resembling Medicare. There is no chance this will happen any time soon, because it would completely upend nearly everything about health care in the United States. Besides, Republicans run Congress and the White House, and there’s probably not one of them who would vote for the idea.

Even though there are several Democratic bills to expand Medicare, Trump was referring to the Sanders plan—which is the most extreme—when referring to the “Democratic proposal.”

Trump argued that the Sanders plan would “take away benefits that seniors have paid for their entire lives.” It wouldn’t. Medicare for seniors would remain as is. It is true that a full-blown government-run health plan would involve trade-offs, which might include longer waits for doctors and stricter access to some care. But since the Sanders plan is politically unfeasible, it’s nothing but fearmongering to label any effort to expand Medicare as a threat to seniors.

[See why Medicare for all could save businesses trillions.]

Trump also said Medicare for all would cost “an astonishing $32.6 trillion during its first 10 years.” That figure comes from credible research published by Charles Blahous of the libertarian Mercatus Center at George Mason University in August. The price tag might sound like a stratospheric figure, but it’s not crazy at all once you account for all the money saved, as well as spent.

Sen. Bernie Sanders. (AP Photo/Chris O’Meara, File)

Blahous, a former public trustee for Social Security and Medicare, forecasts that total spending under Medicare for all would amount to at least $4.47 trillion in 2022, almost all of it federal money. But without Medicare for all, total U.S. spending on health care from all sources—including the government, private-sector companies and individuals—is likely to total $4.56 trillion in 2022. Let’s call it a wash and say total spending would be about the same under each scenario.

But companies and individuals would spend nothing on health care under MFA–which would cover about 27 million people who currently don’t have insurance. So the nation would spend about the same, while covering many more people. That’s a lot more bang for the health care buck.

Businesses currently spend about $1.2 trillion per year providing health care coverage for their workers. If you started the U.S. health care system from scratch, there’s no way you’d make it the responsibility of businesses to provide half the health care in the country. That’s why no other nation makes its business sector responsible for health care. Under Medicare for all, businesses would get out of the health insurance business completely, saving $1.2 trillion. Taxes would have to go up, to pay for the all that additional government health care, but you’d have to raise federal business taxes fivefold to equal the giant sum corporations already pay for health care. From a business perspective, Medicare for all actually looks pretty good.

There would be other problems with Medicare for all, however. The government would probably slash payments to doctors and other providers, which could drive some of them out of the industry and leave a shortage of caregivers. If it didn’t slash payments, then spending would be higher than Blahous predicts. And yes, there might be rationed care managed by the dastardly government.

But remember, the Sanders plan isn’t going anywhere. More plausible, however, might be a modest expansion of Medicare to people who, say, can’t get coverage through an employer and have no group purchasing power. Or, there could be a hybrid model, like in Switzerland, with basic government-provided care for everybody, and more elaborate private plans offering better access for those willing to pay for it. Lawmakers could easily expand Medicare while retaining parts of the existing system that work.

Amid today’s white-hot partisanship, even a modestly expanded government role in health care is probably unlikely. But Trump would be mistaken to ignore public opinion on the topic, which seems to be shifting in the Democrats’ direction. In polls conducted earlier this year by the Kaiser Family Foundation, 59% of respondents said they favor a single-payer government-run health care system such as Medicare for all, and 75% said they favor expanding Medicare for people who might need it, while leaving the private-sector health insurance system in place.

Those poll results are somewhat misleading, because they didn’t include the added costs of expanding Medicare. And if asked whether they’d be willing to pay more in taxes for government-run health care, fewer people would surely sign up. On the flip side, however, companies that no longer had to deal with the ever-rising cost of health insurance for their workers would be able to raise pay and enhance other benefits. There are wackier ideas.

Editor’s note: This story has been corrected to indicate that total health spending would be roughly the same in 2022 under either Medicare for all or the current system. A prior version said Medicare for all would cost less.

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Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman