A policy like Mr. Buttigieg’s could, of course, go even lower than double Medicare. Ms. Warren’s campaign said last week that her “Medicare for all” plan would pay hospitals around 110 percent of current Medicare prices, and would pay doctors right around what Medicare pays. (Mr. Sanders has been more vague on what sorts of prices he might seek as president if Medicare for all became law, but every major analysis of his plan has assumed prices would go lower than double what Medicare pays.)
In recent years, Medicare prices, which are set by the government, have risen slowly, but the prices paid by private insurers have been spiking. It is that rise in costs, in part, that has driven premiums and deductibles higher, putting health care out of the financial reach of many families.
“The real problem in the last years is not that Medicare is not able to control prices, but that the private sector is not able to control prices,” said Gerard Anderson, a professor at Johns Hopkins and a co-author of the “prices, stupid” paper. “It doesn’t seem to be slowing down at all.”
Many other countries with private insurance regulate prices, either nationwide or with various regional adjustments. Maryland has been regulating hospital prices for decades under an unusual waiver from the federal government. But explicit price regulation has generally remained outside the mainstream of the political conversation in the United States.
But as prices rise, the idea is gaining currency. Congress is considering a plan to cap the prices paid to medical providers who don’t accept the same insurance as the hospitals where they work. Several states are developing plans that would regulate the prices paid by some insurers, like the privately administered “public option” plan in Washington, or the state employee benefit plan in Colorado.
Medical providers are sure to dislike a plan with price controls, of course, and are likely to fight this feature of Mr. Buttigieg’s plan with much of the vigor they’re expected to bring to opposing single-payer. Price limits directly hit their bottom lines, and tight price controls could cause some hospitals to close. The politics of price regulation may not be smooth. Mr. Anderson, who worked on cost-containment policy in the Carter administration with enthusiasm, said his optimism had waned over the years. “There is no strong constituency for controlling prices,” he said.
But he added, “You could do it, and if we had the political will, I don’t think the sky would fall.”