Democratic presidential candidate Bernie Sanders all but guaranteed in his “Medicare for All” speech on Wednesday the U.S. would spend less on health care with his plan. He said studies from experts on the political left and the right project $2 trillion to $5 trillion in savings over 10 years, but that’s questionable.
A look at his claim and the facts:
SANDERS: “Medicare for All would reduce overall health care spending in our country.”
THE FACTS: Savings from Medicare for All are not a slam dunk.
The nonpartisan Congressional Budget Office said in a report earlier this year that total spending under a single-payer system, such as the one proposed by the Vermont independent, “might be higher or lower than under the current system depending on the key features of the new system.”
Those features involve nitty gritty details about payment rates for hospitals and doctors, which are not fully spelled out by Sanders, as well as the estimated cost of generous benefits that include long-term care services and no copays and deductibles for comprehensive medical care.
Sanders’ figure of $5 trillion over 10 years in health cost savings comes from a study by the Political Economy Research Institute at the University of Massachusetts-Amherst. The lead author has been a political supporter of Sanders’ and the study was unveiled at an event hosted by a think tank founded by the senator’s wife.
Sanders also cites a savings estimate of $2 trillion over 10 years taken from a study from the libertarian Mercatus Center at George Mason University in Virginia. But the author of that study now says that Medicare for All advocates are mischaracterizing his conclusions.
The Mercatus study explained that such savings would be unlikely since that would hinge on hospitals and health care providers accepting much lower payments than they get now.
A research report this year by the nonprofit Rand think tank estimated that Medicare for All would do the opposite of what Sanders is promising, modestly raising national health spending.
The Rand study modeled a hypothetical scenario in which a plan similar to legislation by Sanders had taken effect this year. It found that total U.S. health care spending would be about $3.9 trillion under Medicare for All in 2019, compared with about $3.8 trillion under the status quo.
Part of the reason is that Medicare for All would offer generous benefits with no copays and deductibles, except limited cost-sharing for certain medications. Virtually free comprehensive medical care would lead to big increases in the demand for services.
The study estimated the federal government’s health care spending would triple, from $1.09 trillion to $3.5 trillion.
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