For years, Sen. Bernie Sanders, I-Vt., lauded government-run healthcare systems abroad for providing better healthcare at lower costs than in the United States. Yet his latest plan to bring single-payer healthcare to the U.S. bears little resemblance to healthcare systems in the rest of the industrialized world and would likely send costs spiralling out of control.
If passed, his "Medicare for All" bill, which would be more accurately described as socialized healthcare, would offer everyone comprehensive insurance regardless of age, income, or health status. It would provide everything from doctor's visits, hospital stays, lab services, prescription drugs, maternity care, dental, and vision without deductibles, copays or any cost-sharing requirements of any kind. In addition, it would prohibit insurance companies from offering any of these services, effectively obligating everyone to enroll into one gigantic government healthcare program.
In a recent op-ed in the New York Times, Sanders promises these changes will bring healthcare costs in line with other developed countries and expand coverage to 28 million people who remain uninsured. "In 2015, the United States spent almost $10,000 per person for health care; the Canadians, Germans, French and British spent less than half of that, while guaranteeing health care to everyone," he argued.
Despite his adoration of Europe and Canada's healthcare systems, Sanders' vision for single-payer healthcare is remarkably different. Unlike Medicare for All, just about every developed country charges deductibles and copays in order to incentivize patients to cost-effectively utilize healthcare services. According to the Commonwealth Fund, the average person will pay $625 in out-of-pocket fees annually in Germany, $726 in Sweden, $771 in Australia, and $855 in Norway.
Single-payer nations also control costs by paying doctors and hospitals substantially less than in the United States. Australia pays doctors 80 percent less for MRI scans. Spain reimburses hospital stays 91 percent less. And the United Kingdom compensates surgeons 69 percent less for heart bypass operations. It's no wonder physicians in the rest of the developed world make 40 percent less than American physicians.
To be clear, none of this means countries with socialized medicine found the secret solution to controlling healthcare costs. Patients in Great Britain and Canada, for example, routinely suffer long wait times and denied services when single-payer plans aggressively control costs from the top-down.
But Sanders' proposal includes none of these cost-savings features that actually keep medical expenses in check: It would completely eliminate employer-based plans that charge workers $1,200 in deductibles on average. In addition, it would remove Medicare's requirement that elderly individuals pay 20 percent of the cost of doctors services. Healthcare would become free from the perspective of patients.
Experts have long recognized that the less patients pay up-front for healthcare, the more they'll spend. A landmark 1982 study by the Rand Corporation examined the spending patterns of patients with insurance that covered 100 percent of expenses versus those with co-pays and deductibles. Rand found that patients with no out-of-pocket fees spent 30 percent more for medical services. A more recent study of Medicare patients concludes that every $1 decrease in cost-sharing increases patient spending by 30-45 cents.
As a result, costs will explode under Sanders' plan. Kenneth Thorpe, a healthcare economist at Emory University, estimates Medicare for All would cost taxpayers $2.5 trillion every year in new taxes. The left-leaning Urban Institute estimates Sanders' proposal would cost $32 trillion by 2026, which amounts to $24,000 in higher taxes for every household.
Unsurprisingly, Sanders doesn't disclose how he plans to extract such hugs sums and it's unlikely any Congress, Republican or Democrat, would approve such an enormous tax increase.
If single-payer ever becomes reality in America, it will be paid for like all entitlements — by diverting funding away from everything else the government does.
A study by the Mercatus Center finds that as spending on current entitlement programs grows, spending on transportation, education, and research fall. The Sanders plan would similarly starve vital government services but on a far grander scale.
Sanders likes to point to countries with government-run healthcare to show his ideas work in the real world. But his vision for free and unlimited healthcare for everyone all the time doesn't exist anywhere and would cannibalize core public services if it ever becomes reality.
Charlie Katebi is a contributor to the Washington Examiner's Beltway Confidential blog. He is an advocate at Young Voices and a policy fellow at the Millennial Policy Center.
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