Medicare for All makes a lot of sense

0
1180

The economics of Medicare for All championed by Sen. Bernie Sanders are actually quite straightforward. Under what advocates call “M4A,” health care coverage would expand while total spending on health care — by companies, individuals and the government — would decline because of lower costs. More would be paid through the government and less through private insurers.

M4A would reduce health care costs for three reasons. First, Medicare pays hospital and doctors at lower rates than private insurers. Second, drug prices would be lower. And third, there would be administrative savings.

These conclusions are robust. Recently, the libertarian-leaning Mercatus Center published a study with data that bear out these conclusions. Indeed, these sensible conclusions jump out of any straightforward analysis.

M4A would seem to be an unbeatable approach. And indeed it is — almost. It’s basically the solution adopted by Canada, the countries of Western Europe, Japan, Australia and New Zealand.

Yet one high-income country does it differently: the United States, which still relies heavily — far too heavily — on private health insurers.

A broken system

The main reason why the United States continues with a broken system is straightforward. The US private health care industry is enormously profitable and powerful. M4A would help the nation but hurt the owners, top managers and highest-paid health providers of the private health care industry.

Thus, the health care lobby blocks M4A — though it would greatly benefit the nation. (Free-market ideologues, including the Mercatus Center, oppose M4A because it would enlarge government, even though it would both expand health coverage and reduce costs. More government, in the free-market view, is bad even if it is more cost-effective.)

[Read More]