Sunday, April 21, 2019

Bernie Sanders' Medicare for All

The USA's population is becoming more and more enamored with Medicare for All. Bernie Sanders touts it often as the cure to health insurance and health care. There are different versions of it, but Sanders' version is a massive government takeover of health insurance. This post will focus on health insurance, not health care.

The basics of his proposal is given in this story. He wants to eliminate private insurance in favor of government-run universal coverage. That includes eliminating health insurance now provided by employers. Almost half the US population has it. Everybody goes on Medicare. So whatever is being paid by employers now (I believe it's around $1 trillion per year) would be shifted to being paid for by increasing taxes, payroll or income. Of course, Bernie refrains from honestly saying how much.

Per here, federal, state, and local governments will spend $1.7 trillion for health care in fiscal year 2019 ($1.25 trillion federal). So the increase in taxes would be huge.

Per page 10 here 217 million people, 67% of the population, have private health insurance coverage that Bernie Sanders wants to eliminate, i.e. take away those people's health insurance, and put them on Medicare. Medicare in 2017 covered 55.6 million people. It's much closer to 60 million now. He doesn't want to eliminate employer-provided insurance instantly. He's willing to phase in the elimination over 4 years. But him wanting to eliminate it is clear in his executive summary -- "there would be one insurance plan for the American people with one single payer", Medicare.

His executive summary does not mention Medicare Supplemental (Medigap) or Medicare Advantage. However, these are private insurance, so lets take his elimination talk seriously. People buy Medicare Supplemental coverage, paying a premium, so that the policy pays for a lot of what Medicare does not. Replacing Medicare Supplement coverage will be in addition to the added cost of Medicare covering more people.

Medicare Advantage is a government-approved alternative to Medicare. The federal government pays a lot of money to the private insurer for each person covered. With a wholesale government takeover, the extra cost to the government would be the premiums Medicare Advantage insureds pay. These premiums on average aren't as much as for Medigap, but there would be some amount.

If you believe I'm exaggerating Bernie's proposal, think again. UnitedHealth Group -- often called UnitedHealthcare -- is the largest healthcare company in the world by revenue with $226.2 billion in 2018. Per this story Sanders tweeted to the CEO of UnitedHealthcare: “Our message to Steve Nelson and UnitedHealthcare is simple: When we are in the White House your greed is going to end. We will end the disgrace of millions of people being denied health care while a single company earns $226 billion and its CEO makes $7.5 million in compensation.” He says "end the greed", but his wanting to eliminate private insurance and single payer imply destroying UnitedHealthcare.

If employers will no longer provide health insurance for their employees, where will their cost savings go? You can bet that Bernie wants to confiscate it. And I'd like to see Bernie tell a huge crowd of federal and state government employees that he wants to eliminate their employer-provided health insurance.

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