By Shiam Kannan
Recently, support for a plan which used to be a fringe idea espoused only by the leftward-most members of Congress has been gaining traction within the mainstream Democratic party. Its name? “Medicare for All.” At first glance, the idea certainly sounds compelling. After all, who wouldn’t like free, universal healthcare? However, this program, just like any other form of centralization, would be devastating to the economy (the healthcare industry in particular), and would certainly cause the national debt to skyrocket. America’s healthcare system is definitely flawed, but more government is not the answer.
To analyze the effects of the Medicare for All legislation, it is important to look at what the plan actually entails. Under this single-payer plan, tax revenue collected by the federal government would be used to pay for everyone’s healthcare. The plan would have very low, if any, copays and deductibles, and would ensure that Americans’ healthcare status is not dependent on employment. All current government-sponsored healthcare programs, such as Medicare, Medicare Advantage, Medicaid, and CHIP, would be eliminated and replaced with a single Medicare for All system. The proposed single-payer legislation would outlaw private and employee-sponsored healthcare plans which provide any of the same services the government provides. These are certainly ambitious ideas, and a lot of them are very appealing, so it is no surprise to see how quickly the Democratic Party has jumped onto the Medicare for All bandwagon. But a closer look at the effects of the plan show that it is most definitely not the right path for America to take.
Perhaps the biggest concern involving Medicare for All is its effect on federal spending. According to a study done by the Mercatus Center at George Mason University, the single-payer plan would cost a whopping $32.6 trillion over the first 10 years following its enactment. The same study projects that federal healthcare spending, as a result of this plan, would total over 10 percent of the American GDP by 2022. The costliness of single-payer stems from several factors. The plan makes the federal government responsible for basically all of the healthcare spending in the United States. In addition, the plan greatly expands the number of services that federal insurance covers. Of course, this massive hike in spending leaves us to wonder how we are going to pay for Medicare for All. In short, we aren’t. Because we legitimately can’t. Even if the corporate tax rate and every personal income tax bracket were doubled, the cost for this program would still not be covered. Therefore, if enacted, Medicare for All would end up as just another monstrosity of a federal entitlement program, eating up more and more of the budget every year while driving up the debt.
However, this program would not only be harmful from a governmental perspective, but also an economic one. If we are going to conjecture the effectiveness of Medicare for All, it would do us good to look at an existing example of socialized medicine in America: the Veterans Affairs system (VA). The VA scandal in 2014 revealed the inefficiency of government healthcare for our veterans, as many were placed on waiting lists for months on end (the average wait time for all veterans was an appalling 115 days for initial care), with some of them committing suicide while waiting for healthcare. If the government cannot even properly administer healthcare to our veterans, it doesn’t take much imagination to envision how terrible government healthcare for 315 million Americans would be.
Defenders of socialized medicine frequently point to single-payer systems in Canada, the United Kingdom, and other European countries, claiming that if it works there, it should work here. But is it really working in Europe? Let’s take a closer look. Earlier this year, the NHS, Britain’s government healthcare system, cancelled over 50,000 non-urgent operations due to an overload on the system, following claims from British physicians that their patients had to endure “third world” conditions. The overload was due to a spike in winter flu, and left many patients with the disease waiting for over 12 hours to receive treatment. This scenario illustrates one of the worst aspects of government healthcare: rationing. When the government controls all the healthcare, if the system is overloaded, the government gets to decide who receives treatment and who doesn’t. If the condition of a patient is bad enough, government rationing could very easily be a matter of life or death for him or her. And even worse? Rationing is inevitable if healthcare is socialized. It’s basic economics: all resources are finite. The market will always allocate these resources more efficiently than a centralized authority. If a centralized authority is in charge of allocating healthcare resources, then it has the power, essentially, to determine who lives and who dies. I don’t know about you, but that’s not exactly a power I would feel comfortable with the government having. If I had a serious injury, I wouldn’t want to be hauled off to a hospital, only to be denied service because the government determined that someone else’s condition was more severe.
Even if we were somehow able to magically make the laws of economics disappear and eliminate the rationing problem, socialized medicine still would have negative consequences on the people it should supposedly help. Let’s go back to the United Kingdom for a moment. It is a fact that the British spend far less than the United States on healthcare. But they also receive less. The United Kingdom has fewer doctors and nurses per capita than most other developed nations, and patients have less access to technologies such as MRIs and CT scanners than in the United States. It should come as no surprise that British doctors and nurses are also paid much less than healthcare professionals in the United States. Once again, the laws of economics prevail. Human beings are driven by the profit motive. When you turn physicians into government employees and pay them a public sector salary, less people want to become doctors. Therefore, the supply of healthcare decreases, which then feeds into the rationing problem discussed earlier.
However, the havoc that single-payer would wreak on the United States does not change the fact that our current healthcare system is flawed, and in dire need of reform. But real reform, which would help all Americans get quality, affordable healthcare, has to go the other way. Reform should be driven by decentralization and deregulation, not government ownership of an entire industry. Some policies we should implement include allowing insurers to sell healthcare plans across state lines, and allowing people to import prescription medications from foreign countries, such as Canada. Such legislation would increase competition, and drive down healthcare costs. Most importantly, we must repeal Obamacare and its onerous burdens on the healthcare industry. Such regulations as the 10 Essential Health Benefits (EHB) mandate do nothing more than make health insurance plans more expensive, by forcing people to buy coverage for services they may never need. For example, maternity/newborn care is included as one of the essential health benefits that all healthcare plans must cover. Obviously, this coverage is useless for demographics such as young, single men, who biologically cannot bear children; nonetheless, due to Obamacare’s EHB mandate, they cannot buy cheaper plans which don’t cover this service. Obamacare has also driven healthcare costs up at a faster rate than if the law were not implemented, which only goes to show that government intervention in the economy, however well-intentioned, only ends up harming the people it attempts to help.
Our healthcare system has many issues, not least of which are rising costs. But big government is not the solution. While the proponents of Medicare for All have good intentions, they are proposing an overly simplistic solution to a complex problem. The answer to America’s healthcare crisis is less government, not more, and the sooner members of Congress across the aisle come to realize this, the sooner we can fix this issue. But it is neither wise nor sensible to implement a $32 trillion behemoth of a government program which will only serve to accelerate our perpetual debt, while doing nothing to help, if not actively hurting, patients and consumers throughout the country.