Budget office: Caveats to government-run health system

Congressional budget experts said Wednesday that moving to a government-run health care system like “Medicare for All” could be complicated and potentially disruptive for Americans.

The report from the nonpartisan Congressional Budget Office was a high-level look at the pros and cons of changing the current mix of public and private health care financing to a system paid for entirely by the government. It did not include cost estimates of Sen. Bernie Sanders’ Medicare for All legislation or its House counterpart, but raised dozens of issues lawmakers would confront.

“The transition toward a single-payer system could be complicated, challenging and potentially disruptive,” the report said. “Policymakers would need to consider how quickly people with private insurance would switch their coverage to a new public plan, what would happen to workers in the health insurance industry if private insurance was banned or its role was limited, and how quickly provider payment rates under the single-payer system would be phased in from current levels.”

One unintended consequence could be increased wait times and reduced access to care if there are not enough medical providers to meet an expected increased demand for services as some 29 million currently uninsured people get coverage and as deductibles and copayments are reduced or eliminated for everyone else.

“An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care,” the report said.

Sanders, I-Vt., pushed back, telling reporters that what’s really disruptive is that millions of Americans remain uninsured while others can’t afford high co-pays and drug prices. “That is disruptive,” said Sanders. “What is not disruptive is expanding Medicare, which is a very popular and cost-effective program to guarantee health care for every man, woman and child.”

The Democratic presidential candidate’s single-payer proposal is coloring the nomination fight and is likely to be a significant theme in the 2020 elections. President Donald Trump derides it as “socialism.”

Employers now cover more than 160 million people, roughly half the U.S. population. Medicare covers seniors and disabled people. Medicaid covers low-income people and many nursing home residents. Other government programs serve children or military veterans.

Proponents of Medicare for All say the complexity of the U.S. system wastes billions in administrative costs and enables hospitals and drugmakers to charge much higher prices than providers get in other economically advanced countries. Critics acknowledge the U.S. has a serious cost problem, but they point out that patients don’t usually have to wait for treatment and that new drugs are generally available much more rapidly than in other countries.

While a government-run system could improve the overall health profile of the U.S., pressure on providers to curb costs could reduce the quality of care by “by causing providers to supply less care to patients covered by the public plan.”

Other potentially difficult choices flagged in the report included:

— Coverage for people living in the country without legal permission, which CBO called “a key design issue.” Sanders’ bill and its House counterpart would cover all U.S. residents, leaving it to a future administration to define that term.

— Payment for long-term care services, which CBO said could substantially increase government costs. Sanders and House counterparts would cover long-term care.

— Use of a government-set “global budget” to control cost, a strategy CBO said is “barely used” in the U.S. Programs like Medicare and Medicaid rely on other approaches.

Private payments from employers and individuals currently cover close to half of the nation’s annual $3.5 trillion health care bill. A government-run system would entail new taxes, including income taxes, payroll taxes, or consumption taxes, said CBO. Or lawmakers could borrow, adding to the overhang of national debt.

Several independent studies of Sanders’ plan have estimated it would dramatically increase government spending, from $25 trillion to $35 trillion or more over 10 years. But supporters say the expense could be much lower if expected savings are factored in.

Single-payer health care doesn’t have a path to advance in Congress for now.

It has zero chances in the Republican-led Senate. In the Democratic-controlled House, key committees that would put such legislation together have not scheduled hearings. They’re instead crafting bills to lower prescription drug costs and stabilize and expand coverage under the Affordable Care Act.

The CBO report was prepared for the House Budget Committee, which is expected to hold hearings but does not write health care legislation.

Within the health care industry, groups including hospitals, insurers, drugmakers and doctors have formed a coalition to battle a government-run system. Major employers are likely allies.

Polls show that Americans are open to single-payer, but it’s far from a clamor. Support is concentrated mostly among Democrats.


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