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Last month, Rep. Pramila Jayapal, D-Wash., introduced House Democrats’ "Medicare-for-all" legislation. Although the plan has absolutely no hope of passing the Republican-led Senate or being signed by President Donald Trump, the legislation will almost certainly become the foundation of Democrats’ 2020 campaign. And if Democrats seize control of the Senate and White House in the next election, it will likely be the centerpiece of their 2021 agenda.
Under the Democrats’ plan, virtually all private health insurance would be eliminated, and in its place, Americans of every age would enroll in Medicare. Copays and premiums would be banned, and dental care, substance abuse services, vision and pharmaceuticals would be covered, all at taxpayers’ expense.
The Mercatus Center estimates the total cost of a similar plan previously proposed by Sen. Bernie Sanders, I-Vt., would be as high as $60 trillion in the first 10 years, adding $32 trillion to federal spending. However, this widely reported figure is actually quite conservative, as the author of the Mercatus report, Charles Blahous, notes.
The Mercatus Center study, like Sen. Sanders and House Democrats, assumes that under a Medicare-for-all scheme, doctors and hospitals will accept Medicare reimbursement rates for all of their patients, even though those rates are significantly lower than the reimbursements provided by private health insurers.
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Data from the Centers for Medicare and Medicaid Services’ (CMS) Medicare actuary shows the rate paid to hospitals for Medicare patients in 2022 will be about 40 percent lower than what hospitals will receive from a private health insurance provider. Payments to physicians will be about 30 percent lower. Over time, the gap is expected to grow.
Under the House Democrats’ bill, hospitals and doctors would effectively be forced to accept these much lower rates – or something close to them – and there would be no way for hospitals or physicians to make up the difference elsewhere. The House bill would ban all doctors who agree to receive payment for services from the government from accepting private payment for services covered under the "Medicare-for-all" scheme.
This doesn’t simply mean that health care providers would have to accept less money for their services; it would likely drive thousands of doctors and hospitals out of business.
CMS’ Medicare actuary reports that because of Medicare’s low reimbursement rates, roughly 80 percent of hospitals will lose money in 2019 when treating Medicare patients. Without significant changes to Democrats’ current proposal, many of these hospitals would likely go out of business.
Asking already-burned-out physicians and other health care workers to treat more patients while receiving a lower salary would likely cause thousands of doctors to retire early or quit.
Despite these startling figures, Jayapal insists, “The vast majority of doctors will not get paid less. In fact, they’ll be seeing many more clients and they won’t have to spend sometimes up to 25 percent of their time on administrative stuff.”
This is, simply put, a lie. According to Blahous’ analysis, the expected savings in 2022 for reduced administrative costs is about one-fifth of the amount lost because of lower reimbursement payments. Further, it’s extremely unlikely that involving the federal government in nearly every health care-related transaction would reduce red tape, as anyone who has ever dealt with the federal government knows.
Democrats’ "Medicare-for-all" plan would grant significant powers to federal bureaucrats to regulate, control and manipulate nearly every aspect of the health care system, and providers who agree to accept payments from the government must, as a condition of receiving payment, provide reports to government agents and comply with a laundry list of new regulatory mandates.
Furthermore, it would add millions of people to the health care market without increasing the number of physicians – all while reducing pay to the point that many practices will go out of business.
This is particularly troubling because research shows that doctors are already burned out. A 2019 report by Medscape shows 44 percent of physicians reported being burned out. In a few specialties, the burnout rate topped 50 percent. Fifteen percent of doctors even reported having suicidal thoughts. Unsurprisingly, the report also shows there is a high correlation between burnout and working more hours.
Asking already-burned-out physicians and other health care workers to treat more patients while receiving a lower salary would likely cause thousands of doctors to retire early or quit. This is especially bad news since the Association of American Medical Colleges projects that even without the challenges posed by "Medicare-for-all," there will likely be a national doctor shortage of up to 121,300 physicians by 2030.
Fewer doctors and hospitals means longer wait times for patients – a problem that plagues single-payer health care systems around the globe. And longer wait times don’t only lead to inconveniences; they also cause unnecessary pain, suffering and even death.
America’s health care system is far from perfect, but putting the federal government – which can’t even run Amtrak or the postal service without losing billions of dollars – in charge of it would be destructive and deadly.
Americans deserve health care solutions, not more government-created problems.