2018 MIDTERM ELECTION

Time: D H M S

UPDATE x3: BRACE YOURSELVES. (MAJOR UPDATE 11:00pm!)

On January 20, 2016, at exactly 12:23am, I posted my analysis of Bernie Sanders's so-called "Medicare for All" plan.

I'm a long-time single payer advocate (although I'm willing to accept something short of it). I've long admired Bernie Sanders as a Senator. And while I was generally leaning towards supporting Hillary in the primary, I was very open to being persuaded to Feeling the Bern. One of the big things which I was hoping would be the tipping point was Sanders's much-anticipated official Single Payer plan (as opposed to one of the earlier ones he had previously proposed in past years). This was supposed to be the culmination of 30+ years of single payer advocacy from a major presidential candidate who was making that proposal one of the cornerstones of his entire campaign. Expectations were high here, and if I had been impressed by the plan itself (even as a rough "white paper" outline), I was ready to jump on board.

I was not impressed.

I'm not going to rehash the reasons; anyone interested in that can read my original post from January, or any of the several follow-up posts I made over the next couple of months.

Here's the thing, though: Aside from this entry, most of my reasons had little to do with the actual financial side. That is, my reasons had more to do with the logistical, legal, political realities and timeframes involved than with whether his math actually added up or not.

In fact, I even defended Bernie's "cost vs. savings" points from Hillary's claims back in December:

Again, what Sanders did say was very important here...but what he didn't say was incredibly frustrating, and opened up an opportunity for Clinton to take an unfortunately disappointing and disingenuous swipe at Sanders over SP (in response to a question which was about education, not healthcare):

CLINTON: But I want to quickly say, one of the areas that Senator Sanders touched on in talking about education and certainly talking about health care is his commitment to really changing the systems. Free college, a single payer system for health, and it's been estimated were looking at 18 to $20 trillion, about a 40 percent in the federal budget.

This was a pretty low blow on Clinton's part, because she was basing that "$18 - $20 trillion" figure on an utterly absurd story in the Wall St. Journal which Paul Waldman already tore to shreds back in September:

...In other words, even if a SP system did cost $1.5 trillion per year, it would be replacing everything we spend on healthcare now...including both public programs (Medicare, Medicaid, ACA, VA, etc) and private insurance (ESI, the private market, etc). By my count, that'd be slicing the total cost for healthcare in the U.S. in half.

The point is that I was perfectly willing to accept that Bernie's plan would probably save a buttload of money...but I STILL had serious problems with it which had nothing to do with cost.

Even after Kenneth Thorpe's analysis of Bernie's plan came out a week later (which I did take note of here), I didn't really talk about the dollars involved in my later entries much because that was always besides the point to me. I figured that his single payer plan might save, say, 20% instead of 40%, for instance, but that it would still save a lot of money; that was still besides the point in my view.

The response to my original piece among Bernie Sanders's supporters was...negative.

And this is why today, my heart goes out to healthcare reporter Sarah Kliff of Vox.com (which also first published the Kenneth Thorpe analysis...using the same headline, I should note). My heart goes out to her because she's about to face an onslaught of rage from supporters of Senator Sanders which will likely eclipse what I faced:

Study: Bernie Sanders’s single-payer plan is twice as expensive as he says

Bernie Sanders's single-payer health care plan would cost twice as much as the candidate estimates, according to a new analysis from the Urban Institute's Health Policy Center.

The Washington-based, left-leaning think tank estimates that Sanders's plan to provide government-run health care for all Americans would increase federal spending $32 trillion over the next decade — well above the $15.3 trillion that Sanders has said he would raise in new revenue, or the $13.8 trillion he believes his health plan would cost.

It's important to note at this point that the Urban Institute (along with the Kaiser Family Foundation, the Commonwealth Fund and others) has been one of the primary sources for my data here at ACASignups.net since day one..and every progressive/Democrat/other left-leaning type who has praised my work for the past 2 1/2 years has, whether they knew it or not, often been praising the work of the Urban Institute.

Not once, before today, has a single progressive written me to claim that the Urban Institute is "shilling for Hillary!" or "defending the corporate status quo!" or "nothing but Establishment sellouts!"

Something tells me that's about to change.

As for the Urban Institute study, they list several key reasons why they expect Bernie's plan to cost so much more than he claims:

  • The Urban Institute estimates the Sanders plan extends coverage to an additional 28.3 million Americans (this includes undocumented workers, although the Sanders campaign has not specifically commented on where that population would fall in its proposal).
  • The Urban Institute used data from Medicaid — the public program that covers low-income Americans, where patients rarely face any fees for using health care — to estimate how demand for health care would increase.
  • The Sanders plan covers an expensive service that most insurance plans don't. That service is long-term care, for those who need medical care that can last weeks or months. Right now, Americans can purchase private long-term care benefits, but few do. UI estimates that this program would cost $4.1 trillion over a decade.
  • Taken together, the Urban Institute argues that these and other changes would create a health care system that is significantly more expensive than what the Sanders campaign has estimated.

Urban is upfront that there are limitations to its analysis. There are details that haven't been covered in Sanders's policy proposals — whether it would cover undocumented workers, for example — that could drive the price tag up or down. But this is now the second analysis that has found the Sanders health care proposal to be trillions of dollars more expensive than the campaign estimates.

Here's a link to the actual report:

The core of the Sanders proposal is comprehensive first-dollar government-financed health insurance for all Americans, with no benefit limits. Available materials do not specify whether the plan would provide coverage to undocumented immigrants, whether other provisions would be made for financing their care, or whether no such provisions would be made. According to campaign materials, benefits would range from “inpatient to outpatient care, preventive to emergency care, primary care to specialty care, including long-term care and palliative care, vision, hearing, and oral health care, mental and substance abuse services as well prescription medications, medical equipment and supplies, diagnostics and treatment.”2

The impact of the coverage and benefit expansions on expenditures would be partially offset by the government’s use of its bargaining power to lower provider payment rates and, in turn, overall health care spending. Administrative costs would also be lower because of the efficiencies resulting from a number of sources, including no private insurance companies, uniform payment rates, and automatic enrollment (i.e., savings on marketing costs). Statements made by the Sanders campaign seem to suggest that he assumes a dramatic reduction in provider payment rates would be largely immediate; the growth rate of health spending would also be lower.

Federal government costs would increase substantially, but direct spending by employers who currently provide coverage and individuals who pay premiums and incur out-of-pocket costs would decrease considerably. The additional government costs would be financed by various taxes, described below. It is not clear whether the Sanders plan would allow individuals to purchase private insurance. Although the plan does not envision a need for coverage for supplemental benefits because no benefits would be excluded from the government coverage, some countries with single-payer systems do allow individuals to purchase private coverage to obtain care from providers with shorter wait times for services, usually in separate facilities. It also is not clear whether the Sanders plan would allow the continued operation of integrated health systems, such as Kaiser or Geisinger, entities that combine the direct provision of medical care with the insurers’ role of managing the efficient provision and use of care. Also unclear is what would happen to Medicare Advantage.

The entire report is around 30 pages long and is well documented with methodology, sources and reasoning listed. Notice that many of their concerns are the same as the ones I expressed (although they obviously use proper terminology and more detail).

Now, compare this to Sen. Sanders's "FULL PLAN" (as it's described on his website). Not a "summary version" or an "overview", but "The Full Plan". It's about 5-6 pages, some of which is background, none of which includes citations of data or estimate sources.

Should it be more detailed at this stage? Perhaps not. Others have pointed out that President Obama's "heatlhcare reform" plan wasn't much more detailed on his campaign site in 2008 either. I honestly don't recall. I do know that Sanders's plan has now been heavily criticized by many highly credible sources who would both normally be expected to side with him (not just Thorpe, who helped design the SP proposal for Vermont a decade ago which ultimately didn't go through, or the Urban Institute, but multiple respected, left-leaning healthcare policy experts and wonks). And the link on his website does describe it as "the full plan". If there's more detail to be found including showing the work behind the numbers, they should really be included in a "full" plan, I would think.

Anyway, I'm sure that Ms. Kliff is about to face a torrent of outrage from single payer/Bernie Sanders supporters...and now I will as well (again). When I faced the backlash in January, I was shocked by it. Today I'm expecting it.

Anyway, if anyone's interested, I still support a Universal, Comprehensive, Single Payer (or similar) healthcare system eventually. I just believe (as I've said all along) that it will take much longer and have to be done in more steps than Senator Sanders and his supporters believe it will. That's really the main difference. I've laid out many of these reasons both here and elsewhere, especially in this interview with Will McLeod and Arliss Bunny from late February 29th (I come in at around 36 minutes into the broadcast and runs for a solid hour from there).

UPDATE: In Sen. Sanders's defense, I should point out something else. Take another look at Paul Waldman's analysis from last fall:

But health care is nevertheless a good place to examine why these big numbers can be so misleading. At the moment, total health care spending in the United States runs over $3 trillion a year; according to the Centers for Medicare and Medicaid Services, over the next decade (from 2015-2024), America will spend a total of $42 trillion on health care. This is money that you and I and everyone else spends. We spend it in a variety of ways: through our health-insurance premiums, through the reduced salaries we get if our employers pick up part or all of the cost of those premiums, through our co-pays and deductibles, and through our taxes that fund Medicare, Medicaid, ACA subsidies, and the VA health care system. We’re already paying about $10,000 a year per capita for health care.

$3 trillion per year. With cost increases and population growth (the Census bureau expects the total population to hit around 345 million by 2024), that's expected to hit $42 trillion over 10 years. Around 28 million people are still uninsured in any way, and the CBO is currently projecting this to remain at roughly 28 million for the next decade (even accounting for population growth), barring any major changes to the ACA or the economy in general.

By comparison, Senator Sanders's plan, according to the Urban Institute, would run $32 trillion over 10 years...while also covering all every single American.

In other words, here's how Bernie Sanders's plan would play out according to him vs. the Urban Institute, compared with how the CBO/CMS sees the current system playing out without any significant changes:

  • Current System: $42 trillion over 10 years, 28 million uninsured
  • Bernie Sanders's Plan (according to him): $14 trillion over 10 years, 0 uninsured
  • Bernie Sanders's Plan (according to Urban Institute): $32 trillion over 10 years, 0 uninsured

Assuming the new report is accurate, the Sanders plan would still cost 24% less than the current system (instead of 67% less), while covering 28 million more people and theoretically getting rid of a mountain of red tape, paperwork, billing headaches, bla bla bla.

This actually goes right back to what I said above:

I figured that his single payer plan might save, say, 20% instead of 40%, for instance, but that it would still save a lot of money; that was still besides the point in my view.

Ironically, even the Urban Institute's analysis makes Sanders's plan look better than my example.

UPDATE 5/09/16 11:00pm:

A huge shout-out (again) to Larwit1512 for pointing out an important error in the 2nd & 3rd bullets above: The $14 trillion & $32 trillion estimates would be in addition to current government spending (since the government already spends billions of dollars on Medicare, Medicaid and so forth, along with additional spending by state & local governments). Larwit also included the original Thorpe projections, and noted that the Urban Institute is assuming an extra $4.1 trillion for Long Term Care.

Therefore, a more appropriate comparison would be:

  • Current System: $42 trillion over 10 years, 28 million uninsured
  • Bernie's Plan (his estimate): $22 trillion + $13.8 trillion = $35.8 trillion, 0 uninsured
  • Bernie's Plan (Thorpe estimate): $22 trillion + $24.3 trillion = $46.3 trillion, 0 uninsured
  • Bernie's Plan (Urban estimate): $22 trillion + $32 trillion (- $4.1 trillion) = $49.9 trillion, 0 uninsured

As I said earlier, however, my concerns really have little to do with the actual dollar figures, and more to do with how sloppily put together the current plan seems to be. In addition to the examples raised by the UI analysis (what happens to undocumented immigrants? What about Medicare Advantage? Would supplemental private insurance be allowed at all?), I can offer some more: What happens to the Hyde Amendment? What happens to the 2 million or so people who work in the private insurance industry (half a million directly, another 1-2 million indirectly)? What about the multi-year legally binding contracts between hospital chains, employers, private carriers and so forth? You get the idea.

These are the things which bothered me about this plan more than anything, and ironically, the Urban Institute report pretty much brings my concerns full circle.

UPDATE x2: The conclusion of the Urban Institute analysis actually does go into some detail about non-budgetary (or peripherally-related) concerns, some of which I mentioned above:

Providers would be seriously affected. Hospitals would see only small financial effects in the aggregate because payment rates would be increased for those otherwise insured by Medicare and Medicaid and revenue from the otherwise uninsured would increase, but they would receive less revenue for providing care to those who would otherwise be privately insured. Different types of hospitals would be advantaged and disadvantaged, depending upon their patient mix. Growth in revenues over time would be slower than under current law, however. Physician incomes would be squeezed by the new payment rates because such rates would be considerably below what physicians are paid by private insurers. Again, whether providers were financial winners or losers from the reform would depend upon their current payer mix. The pharmaceutical and medical device industries would be squeezed perhaps more than is sustainable. Behavioral responses by the range of health care providers to such a vast change are uncertain. If provider incomes fall, additional federal investment in medical education might be necessary to achieve a sufficient level of supply. Choices would need to be made about the treatment of existing private longterm care insurance contracts and the reserves the companies that issued these policies now hold.

...and concludes with the same argument which I've been making for months now.

Back in January, I said:

Remember the several million people whose pre-ACA policies were cancelled back in December 2013 for not being compliant with the new law? Remember how the backlash to those several million having their policies taken away after the "if you like your plan you can keep it" brouhaha? Even though the vast majority of them ended up replacing their old policies with new ones which, for the most part, have better coverage (not to mention protection from being dropped via rescission, denial for having a pre-existing condition, maximum caps on their out of pocket expenses and, for many people, lower premiums thanks to financial assistance), the fact remains that when it comes to healthcare coverage, most people take it very personally.

That was only a few million people (plus a few million more since 2013 due to the 3-year "transitional period" extension granted in response to the backlash.

Now imagine not a few million, but 300 million people having their policies shut down and replaced with a new one all at once. Imagine the anger, the chaos, the confusion...even if the new system turns out to be better, more efficient, less expensive and less confusing across the board.

Today, the Urban Institute made the exact same point:

Finally, moving to a single-payer system would be highly disruptive in the near term. When the ACA required people to give up private insurance plans that were less costly than those available in the reformed nongroup market, some vocal complaints led to quick administrative action to increase opportunities for people to keep non-ACA compliant plans longer. The ACA’s changes to the health insurance system and the number of people affected by those changes has been small compared to the upheaval that would be brought about by the movement to a single-payer system.