Opinion

Bernie Sanders’ Medicare for All bill would be a heavy lift for New York

By Bill Hammond |  

September 20, 2017 |  

Vermont U.S. Sen. Bernie Sanders has proposed a single payer healthcare bill, dubbed Medicare for All. (Shutterstock)

Progressive politicians jumping on Bernie Sanders’ Medicare-for-all bandwagon should be careful what they wish for – especially if they represent New York.

Setting aside the many other arguments against full-fledged, government-run single-payer healthcare, there is no debate that such a plan would entail a gargantuan increase in federal spending. And with that would come tax hikes massive enough to cause sticker shock even for true believers in big government.

Last year, the Sanders campaign estimated that total federal spending would have to grow by $14 trillion over 10 years, or about 25 percent. More realistically, an independent analysis by the left-of-center Urban Institute put the 10-year cost at $32 trillion, an increase of 60 percent.

Either amount would require multiple tax hikes on a massive scale – along with a similar all-out investment of political capital – with the whole caboodle going to the single goal of universal coverage.

Agency Focus: The New York State Department of Health

Good luck preserving the existing budgets for other social programs, let alone financing big, new investments in education, welfare, mass transit, renewable energy and other progressive dreams.

The new financial reality would be especially rough on high-wealth, high cost-of-living states such as New York. As the late U.S. Senator Daniel Patrick Moynihan relentlessly pointed out, New York contributes much more to the federal budget than it gets back. A 2015 calculation by state Comptroller Tom DiNapoli put the deficit at $20 billion a year, or $1,000 per resident, the third-worst among the 50 states.

To look at it another way, New Yorkers represent 6.1 percent of the population, but pay 8 percent of the taxes – meaning they and their economy would disproportionately foot the bill for any new federal program.

The exact impact is impossible to know, of course, because single-payer backers in Congress have shied from specifying exactly what taxes they would hike and by how much. Sanders did float a menu of options – including a 7.5 percent payroll tax and a 4 percent income tax – that would raise, in combination, $1.6 trillion. Which is still almost a trillion short of what the bill would likely cost. 

Supporters tell themselves that the pain of higher taxes would be offset by the relief of not having to pay insurance premiums anymore – which might be true on the lower ends of the salary scale. But you can’t increase revenues by 60 percent without reaching deep into the middle class.

Supporters also look forward to the savings on insurance paperwork. But the Urban Institute predicts that overall health spending would nevertheless increase by 16 percent – as 28 million newly insured individuals use their benefits, and the rest of the country starts thinking of doctor visits and MRIs as “free.”

Another blank spot in the single payer bills is how they would manage costs going forward. After all, the plan comes from a party that recently argued, in reaction to Republican proposals, that allowing per-recipient Medicaid spending to grow at the medical inflation rate amounted to an unconscionable cut.

Inevitably, a federal single-payer system would face pressure to lower payments to hospitals, doctors and other providers – which would likely hit a high-cost state like New York harder than most.

New York’s elected representatives rarely fail to raise an alarm at any threat to the state’s federal healthcare funding. Yet Gov. Andrew Cuomo told WNYC’s Brian Lehrer on Monday that Medicare for all “would be a good idea” – embracing a plan that would disrupt the state’s entire healthcare system, from top to bottom, in utterly unknown and unpredictable ways.

Senator Kirsten Gillibrand and 15 of the state’s 18 Democratic House members have also endorsed Sanders’ blank-check fix for healthcare.

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The moral reasoning that equates “healthcare is a right” with “Medicare for all” is also hard to follow. Yes, a wealthy society has a duty to take care of those who can’t take care of themselves. By why should taxpayers provide free health coverage to people who already have it and can readily afford it – up to and including the Kardashian family and Warren Buffett? 

The open-ended, sky-is-the-limit nature of Berniecare’s universal entitlement to a costly benefit is especially excessive, and dangerous. Presumably, Americans have a right to food and shelter, too. But we don’t expect the federal government to pick up the check at Per Se or buy everyone a penthouse condo.

The more sensible and affordable goal is universal coverage – and, for all its flaws, the incrementalist approach of the Affordable Care Act is moving in that direction. The Census Bureau reported last week that the nationwide uninsured rate dipped to 8.8 percent in 2016, a third lower than it was in 2013. With the right fixes to Obamacare, that welcome trend would continue.

Perhaps Democrats are backing single-payer as a symbolic gesture of resistance to ham-handed Republican repeal efforts, including the current Graham-Cassidy bill, which threatens to undo four years of progress. The obvious risk – as many commentators have previously pointed out – is that Democrats will repeat the Republican mistake of committing to a health plan they probably won’t be able to deliver, or even want to deliver, when they get the chance.

Republican Wyoming Senator John Barrasso called Democrats’ bluff on Friday by formally requesting that the Congressional Budget Office analyze the fiscal impact of Sanders’ bill.

He’s doing the Democrats a favor. Maybe when they see the numbers, they’ll wake up and smell the math.

Bill Hammond is the director of health policy at the Empire Center and a former columnist for the Daily News. 

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