Bernie Sanders’ Health-Care Plan and Its Magic Asterisk

Megan McArdle in Bloomberg asks how Sanders proposes to pay for his health-care plan.

“National Health Expenditure data … says we spent about $3 trillion on health care in 2014 from all sources … Now the government already spends $1.3 trillion, or thereabouts, so … that leaves us with about $1.7 trillion to go. Yet Sanders claims that his plan, despite providing vastly more generous health benefits than basically any plan in existence, will cost only $1.35 trillion a year. That’s a pretty big gap. How does he get there? ‘Reforming our health-care system, simplifying our payment structure and incentivizing new ways to make sure patients are actually getting better health care will generate massive savings.’”

Sanders “has proposed a Magic Asterisk worth a third of a trillion dollars a year … But of course, it would be DOA anyway … Sanders won’t easily persuade congressional Democrats to embark upon another such bruising, vote-losing political battle.”

“The very fact that Sanders relies on the Magic Asterisk shows us just how impossible single payer is in this country. Even Sanders — its fondest supporter, who never met a high-income tax he didn’t like — knows he can’t be upfront about the cost and raise taxes accordingly. If Sanders won’t do it, then no one else will either.”

“Single payer’s off the table, for now and for the foreseeable future. The only place you’re going to see it is on Bernie Sanders’s website.”

12 Comments

  1. All true.

    What’s frightening is how many gullible people on the left are falling for this and other magic asterisks.

    Putting forth “perfect” democratic-socialist solutions to every problem is all well and good, I suppose. But the most important task for ALL Democrats is to curb the power of the Republicans. That means trying to take back many state legislatures. That means getting more Democrats in the U.S. House and Senate. That means getting somebody in the White House who can get on with at least some Republicans and most Democrats (no, Sanders doesn’t have many allies among his fellow Democratic senators, in part because he’s always disdained their party). And that means somebody who can appoint left-of-center judges and work to get them approved.

    1. Thing is, if Obama hadn’t passed HCR, nobody would take Sanders the least bit seriously.

      And he could well end up destroying Obamacare–even if he wins the Presidency. Hillary’s right about that. The best case scenario would be him trying to pass national healthcare, and throwing away most of his political capital in the process.

      Voting for people because they are ‘anti-establishment’ isn’t a remedy for ANYTHING, whether you’re right or left. He’s a great outside agitator. He’d be a very ineffectual President, IMO. And a lame duck from day one, because seriously–a second term would be out of the question. He’d be 79 on Election Day 2020.

      But a third term is a third term, no matter who gets it. And even winning Iowa & NH wouldn’t cinch the nomination for him. And polling for Iowa seriously sucks. So I won’t panic. Even though in the back of my head, the words “President Trump” resound, louder and louder…..

      1. “And he could well end up destroying Obamacare–even if he wins the Presidency.”

        This is just plain fear-mongering. Bernie voted for the Affordable Care Act; he’s not going to allow the way we do health care to go back to what it was prior to the ACA. If he manages to get legislation through to replace it with something better, then good. If not, then we’re no worse than we were before. I don’t buy the “wasting political capital” argument. Trying to get legislation through that would improve people’s lives is better than not trying to do so.

        1. Really? Then doesn’t Hillary deserve even more credit for trying to pass single-payer back in the 1990’s?

          And the failure of that did hurt the Clinton administration, did make it harder for any other major initiatives to get passed.

          He’s not just talking about changing HCR–he’s talking about screwing with Medicare as well.

          There’s always danger in meddling around with existing programs–when a big part of the political structure wants to end them. Don’t give them that chance. Incremental reforms almost invariably work better, and no matter what you want to believe, Social Security and Medicare were incremental–the programs we have now aren’t the programs we started with.

          Real change takes time and patience, and a 75 year old man is anything but patient. Because he doesn’t have much time.

          1. I don’t know if your argument is that the current states of these programs have been incrementally changed since their introduction, which even the most progressive programs throughout the world go through, or if you are saying that they were the result of a piecemeal approach.

            The first of these is a little simplistic (FDR oversaw the initialization and large expansion of SS; Medicare was essentially done all at once with tweaks along the way) and the second is largely incorrect. Both were the result of large progressive majorities that were effectively able to exercise their political will and passed large reforms at one time.

            Even seismic reforms like the NHS in Britain go through incremental change- but that’s not how any of these programs got here in the first place, which is the implication of your argument. To say programs change over time is not the same as saying incrementalism is what created them.

            “There’s always danger in meddling around with existing programs–when a big part of the political structure wants to end them.”

            You do realize that for any program to be altered, a hypothetical President Sanders would need to sign the bill, right? Hillary wants people to believe that gunning for a single payer system would mean trading away existing programs just for the pursuit of passing it, which obviously isn’t true. If hypothetical President Sanders doesn’t sign anything, nothing changes.

  2. Thirty percent of US health care costs are administrative fees.
    Government-run health care plans have very low fees, and very low overhead, around 2%.
    Saying that the Sanders plan has a “magic asterisk” ignores the actual numbers.

  3. The article is just a low-content rant. It linked to another article by the same author “A Single-Payer System Won’t Make Health Care Cheap” which is at least a little more interesting and contains numbers and graphs, but it pretty much boils down to “it’s hard to spend less on anything because someone would lose money and they would complain” and doesn’t really address the question of how efficient government health care is.

    I think the interesting discussion we should be having is what proportion of health care does Medicare already cover? If the average person uses, say, 2/3 of their health care services after they’re 65 years old, then that should imply that expanding medicare spending by 50% would allow us to cover all citizens from birth. If the government is already covering the least healthy, most expensive customers, then maybe it should cover the healthy ones too at a modest cost. If health care services is half and half (before 65/after 65) then expanding medicare would approximately double medicare spending, but we’d still come out quite a bit ahead.

    1. Government healthcare insurance can be efficient or inefficient, just like private healthcare insurance–we don’t really have purely private healtchare insurance, and Medicare isn’t purely public healthcare insurance. It’s a hybrid system, either way.

      So why not just keep tweaking the system we already have? Rebooting the whole thing–with a Republican majority in the house, quite possibly in the Senate that is actively hostile to any government program waiting its chance to kill all of it while blaming it on the Democrats.

      Question: No matter how pure Bernie’s motives are–do we really believe he’s got the political chops to get it done?

      What has he EVER gotten done?

      1. Look, the US spends 50% more per capita than any other country without better results. That includes countries that have Obamacare-like systems, rather than single payer, like Switzerland, Germany and the Netherlands. Personally, i don’t care whether we do it through single payer or the ACA or some other means, but it would be a huge blessing to get US costs in line with the others. i don’t know whether Bernie or anyone can do it. Maybe Trump can bully pharma and doctors into charging less, But it needs to happen.

        1. Trump’s biggest supporter was supposed to win yesterday, and look what happened, he got “Schlonged” by a team being run by JEB’s cousin. Trump is a LOSER!!!

          This is why Trump’s ideas would never work. No, not because of a football game, but because the above paragraph represents the only type of argument he has chosen to make.

          As for Sanders, as long as there continue to be pareto-optimal alternatives to the US Healthcare system (i.e., lower cost with longer life expectancy and lower infant mortality), we should be open to trying out aspects of those alternatives.

  4. Most of that $1.3 trillion is health insurance premiums paid by employers. To transition, you need to have employers pay that into Medicare, and you then have single payer without hurting either employers or workers, since it’s money they are paying now anyway (employers) or not getting now (workers). Those freeloading employers who don’t currently provide insurance are going to have to stop freeloading. Rather than complain about going out of business, they will have to raise prices. With deflation a much greater threat than inflation that would be a good thing for the economy overall.

  5. “The fact that Sanders relies on a magic asterisk shows us how difficult single payer is in this country.”

    No, poorly thought rants like this show us how difficult it is. Yes, interest groups would complain– those who actually have the most to spare. For a health care writer, she really doesn’t seem to understand what runs up costs in the American health care system. This plan would bring those costs down; assuming our national health care spending would remain the same under single payer is like assuming a wound is going to keep bleeding after it’s been properly bandaged.

    McArdle pivots quickly to “single payer would be hard to pass” as the crux of her argument against the Sanders plan. News for you, Megan: the people who support him aren’t going to be swayed by that because they already know it. Their aim is to fundamentally and permanently change the frame of the debate. Theirs is a game of long-term shifts, not near-future legislative victories.

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