Bernie’s Medicare for all is cruel and not compassionate

Bernie’s Medicare for all is cruel and not compassionate
© Greg Nash

Last week Sen. Bernie SandersBernard (Bernie) SandersDe Blasio headed to Iowa to speak at political fundraiser Yes, spills happen — but pipelines are still the safest way to move oil Why sexual harassment discussions include lawmakers talking about Bill Clinton’s past MORE (I-Vt.) revealed his 96-page plan to walk away from the finally-acknowledged failures of ObamaCare and try yet another ill-considered plan to remake our health care system in the name of “compassion.”  

Compassion is a wonderful thing, but what he calls “Medicare for all” depends on repealing the laws of economics and denying everything we know about basic human nature.  

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First of all, consider why Medicare for the elderly — in all fairness — is a truly beloved government program, particularly as compared to other “single-payer” programs like Medicaid for the poor or VA health care, both of which are generally viewed as failed health-care models. The fact is that Medicare is as flexible, successful and generous as it is only because it wholly insolvent financially, kept alive by massive subsidies.

 

In fact, the extent of its insolvency would cause legendary boondoggles like Amtrak to blush. It would be difficult to believe, were it not confirmed by the Urban Institute, a well-known liberal think tank in Washington. Indeed, the insolvency is so large, it is the fiscal equivalent of the big lie — a financial black hole.

The Urban Institute did something no one had done before. They tracked the total lifetime taxes paid into the system by a typical worker and his employer, hypothetically grown in a tax-free account at a reasonable interest rate, and the actual cost of the benefits provided when the worker retired.  

For a married two-earner couple retiring in 2015, who earned the average wage (a total of $95,600 in 2015), the Urban Institute concluded that the present value of the Medicare benefits they receive at retirement was $422,000, while the present value of the Medicare taxes they and their employers paid over their working lives was only $140,000. You can do the math – only 140/422nds or 33 percent was “paid for” by the workers and their employers.

The rest was subsidized by the general public – borrowed actually and added to the national debt. (See Table 15 of the Urban Institute report, for the cohort reaching age 65 in 2015). The numbers are even worse for single-earner couples who get the same benefits but pay only half the lifetime taxes.

This is not an anomaly, although the results vary with income, since Medicare is funded by payroll taxes based on a worker’s salary.

The CBO reached similar conclusions, finding that “those born in the 1960s would receive, on average, about $270,000 in benefits and pay about $65,000 in payroll taxes." Similar conclusions have been reported in Forbes and the Washington Post. Now, maybe you think that’s a nice reward for a lifetime of work — something we ought to do for our parents and grandparents, or aunts and uncles.  Fair enough, as long as we can continue to borrow the money needed to fund that deficit. But if we expanded that generous program to everyone, it would bankrupt the country.

The only way to avoid bankruptcy would be to turn Medicare into a solvent program, charging enough in taxes to pay for 100 percent of its costs, not the more typical 16.5 percent or 33 percent illustrated by these examples straight from the Urban Institute’s report.

But if Congress lacks the self-discipline to make Medicare for the elderly — a fraction of the population — pay for itself, do we really think it will do so when it covers 100 percent of the population? Can you really see Congress adding another 10 percent in payroll taxes —taking an added $5,000 per year from a typical middle-income, $50,000-a-year worker?  

Congress has shown that it simply has no fiscal discipline, that it can’t say “no.”  As bad as that is when we’re talking about the core functions of government — national defense, the courts and regulatory agencies, national parks — it would become unsustainable once you open the door to having the government pay for our personal living expenses, particularly such expensive and emotion-laden items as health care.

The only solution would be to turn “Medicare for all” into something much closer to Medicaid for all, or the VA for all.  Low costs, low deductibles — sounds great, as long as you don’t want or need any actual health care services.

And, once all private competition has been eliminated, who will listen to your complaints? Who could you complain to about the postal service, if there were no FedEx or UPS, no fax machines or e-mail? Who could you complain to about phone bills or phone services, back when the only game in town was a government-approved monopoly (what we used to call “Ma Bell”)?

There is no example in history of a government monopoly that has provided consumers with the cost-saving benefits of free competition.  

The current system is certainly not fully, fairly or freely competitive — and more competition should be encouraged. But abandoning free competition, giving the “deep state” the exclusive power to decide what health care services should be provided to whom and at what cost, does not have very much going for it as an alternative solution.

Still, if Sen. Sanders and his co-sponsors think theirs is such a wonderful idea, by all means let them try it out. Let them try a government monopoly on health care, funded by taxes, in Vermont or California, Massachusetts or New York; let’s try a single-payer government system in one of the states where the voters seem so enthusiastic about it.  

Of course, the reason that hasn’t been done is that they repeatedly investigate it and find it completely unworkable without regulations and taxes that citizens would find unacceptable, and cuts that would force service providers to leave a state — or to leave the profession entirely.   

That would be the cruelest effect of these ill-considered single-payer ideas.  

Single-payer is a euphemism for single-provider; and he who pays the piper will call the tune.

In other words, we’re talking about giving a single government bureaucracy complete and total power over what medical procedures are allowed in this country — and experience shows that the results would be viewed as cruel, not compassionate.  

Ramin Oskoui, MD is a former president of the medical staff of Sibley Memorial Hospital - Johns Hopkins and was physician of the year 2015 for the hospital.