Guest Post: Medicare for All and American Populism

Democratic presidential candidate Sen. Bernie Sanders, I-Vt., speaks at the Alliance for Retired Americans 2015 National Legislative Conference in Washington, Thursday, July 9, 2015. (AP Photo/Molly Riley)

With Republicans bruised, but not yet beaten, Bernie Sanders and many other have decided to counterpunch with “Medicare for All”, see Sanders’ op-ed in the NYT.  “Medicare for All” sounds pretty darned sensible (better than Medicaid for All, to be sure).  Let’s go for it!

What is “Medicare for All”?  Is this different than “socialized medicine” or “single-payer”? No, not really, but Medicare is very popular – old people turn into subversive young activists when it is threatened.

So, if popular, why not just go for it?

Medicare, Medicaid, and Medical Federalism

To state the obvious, Medicare for All would be very expensive. I mean, of course it would. The Urban Institute estimated Sanders’ presidential “Medicare for All” plan at $32 Trillion over 10 years.

Part of the large increase is due to the peculiar institution of medical federalism. From the UI: “The increase in federal spending is so large because the federal government would absorb a substantial amount of current spending by state and local governments, employers, and households [p.2].” Medicaid might go away (well, wouldn’t it?) and state governments have the equivalent of a “co-pay” for Medicaid. So, states might like Medicare for all because they wouldn’t be forced to offer Medicaid any more, something many states fought for the right to do in the Supreme Court.

I’m sure that we’ll all see lower state tax bills on income, sales, and maybe even cigarettes once states are off the hook for Medicaid expenditures. [ha. ha.]

Medicare for All!  Smoke ‘em if you got ‘em!

Of course….Medicaid going away [which I don’t know if it does] has its complications given that Medicaid actually covers long-term, i.e. nursing home care, but Medicare does not [maybe Medicare-for-all does]. This creates the perverse outcome of old people spending down their savings and selling off their assets to become impoverished to qualify for Medicaid. If they don’t and they are institutionalized, state Medicaid will certainly cover their nursing home stay until they die, but then the state because the primary de facto heir to their estate until the bill is paid.

Paying More in Taxes and Less to Doctors

Hospitals, doctors, and pretty much everyone in the medical profession will probably gear for a fight against Medicare for all – there are exceptions, of course [e.g. not having to deal with 37 different insurance companies]. Why? Well, even at $32 trillion, the program is cheaper than the private “market” [I’ll give you a second to get up from ROFLing at the idea that there is such thing as a health care market in America] because everyone will be subjected to the federal reimbursement rate which is much lower than most private insurers. Certainly, private insurance will exist in the single payer world as it already does for Medicare Parts B, C, and D.

That’s the other thing – Medicare is not a premium-less policy save for catastrophic care. So, if Sanders invokes Canada or Europe, just keep in mind that you might simply wander into a clinic with an insurance card, but there will still be a premium for that card.

How will this be paid for? I don’t know. Conyers (D-MI) introduced a bill that does something similar in January, but it is light on details. Here they are:

“(1) IN GENERAL.—There are appropriated to the Medicare For All Trust Fund amounts sufficient to carry out this Act from the following sources:

(A) Existing sources of Federal Government revenues for health care.

(B) Increasing personal income taxes on the top 5 percent income earners.

(C) Instituting a modest and progressive excise tax on payroll and self-employment income.

(D) Instituting a modest tax on unearned income.

(E) Instituting a small tax on stock and bond transactions.”

In tweet-speak: “Increased taxes for all, the rich pay more.”

No numbers there….The Tax Policy Center conducted an analysis of Sanders revenue and expenditure proposals – not just for Medicare for All – and found that of the $33.3 trillion in spending he was proposing, even with tax increases on every group, he would come up about $18 trillion short. The good news could be that most non-rich people would receive services commensurate with their tax increases – or, perhaps even better.

A Path Forward?

Politically, it is clear that the attack on the ACA actually solidified support for government intervention in health care – see the Kaiser Family Foundation tracking poll that shows support for the ACA increasing after the election of Trump and further increasing as we talked about it. I’ll bet that this is what the Ds are seeing (many have cosponsored this bill).

I’m not sure how Sanders thinks a unified Republican Congress is going to pass this bill….of course, he probably doesn’t and this is all about position-taking for the 25,000 Democrats who want to be president (including him). The smart strategic calculus of this action is to essentially say that the Democratic position is not just defend the status quo but to have a counterattack.

There’s a lesson here from John Kingdon: problems don’t seek solutions, but solutions seek problems.

Pre-ACA, Medicare for All was viewed as a solution to a health care system that actually most people liked. So, it was a solution for a non-problem. Post-ACA, Medicare for All can be viewed as a solution to the ACA – something that virtually everyone has a problem with.

Medicare for All could also be a test of the rise of populism in American politics. Trump is arguably a populist candidate, Sanders, too, though less so [See Rise of the Trumpenvolk by Oliver and Rahn, sadly paywalled]. Regardless, if populism is trumping (excuse the pun) party, then, it is possible to see a solution like Medicare for All cobbling together a group of people on the left and the right who are not inherently anti-government, but are anti-elite.  Though, Sanders populism is anti-economic elite; Trump’s populism is anti-governmental elite served with a substantial helping of nativism.

That said, the current crop of Republicans have no desire to push this policy forward. Thus, I’m not currently optimistic about single-payer (or “Medicare for All”, you like) now, but I the ACA vote tells me two things: 1) Americans don’t really like the ACA but 2) They don’t want to get rid of it.

Dems are flying high after their non-loss on defending the ACA. They feel like Superman, but they might be end up like Icarus.

P.S. We’ve been here before. As Kingdon is famous for saying: There are no new ideas.

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About the author

Chris Koski

Chris Koski is a professor of Political Science at Reed College and a County 7 ex-pat.

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