Critics peg cost of Sanders health plan at $2.5T

Candidate disputes number, say single-payer system more efficient.

Now more than half-a-century after Roosevelt and Truman could not persuade Congress to adopt a national health insurance system, Democratic presidential candidate Bernie Sanders has resurrected the idea with his call to scrap the current U.S. private health insurance system and replace it with one operated by the federal government.

Declaring that Roosevelt and Truman “believed that health care should be available to all of our people,” Sanders’ plan would sweep away monthly health insurance company premiums and instead finance government health insurance through higher taxes imposed on virtually every taxpayer.

“Every major country on earth, whether it’s the U.K., whether it’s France, whether it’s Canada, has managed to provide healthcare to all people as a right and they are spending significantly less per capita on health care than we are,” Sanders said during last week’s Democratic debate in New Hampshire. “So I do not accept the belief that the United States of America can’t do that.”

Yet critics, including Kenneth Thorpe, a professor of health policy and management at Emory University in Atlanta, contend Sanders has woefully understated the cost of his new plan by as much as $1 trillion a year. Sanders’ home state of Vermont in 2014 abandoned plans to adopt a state insurance plan because of exorbitant taxes it required.

In addition, critics argue Sanders’ plan would produce a seismic upheaval in the lives of millions of Americans with Thomas Miller, resident fellow at the American Enterprise Institute in Washington, saying it would be “like diving into the cold water all at once on a December day.”

And they maintain Sanders’ idea is politically impractical, pointing out how difficult it was in 2010 for President Barack Obama to convince a Democratic-controlled Congress to approve his health care law, which guaranteed private insurance or government coverage to millions of people without insurance.

“We have an established health care system already,” said Thorpe, who served in the Clinton administration from 1993 through 1995, adding it “would be very difficult to make that transformation.”

What is beyond dispute is Sanders’ bold proposal has electrified progressives who have yearned for the United States to emulate Canada, Great Britain and many other industrialized nations by adopting a system in which the government is the only insurance provider.

They argue since Canada instituted its own national insurance system in 1971, health care spending in Canada has increased at a slower rate while life expectancy in Canada is about two years higher than the United States.

“They have gained in quality of health care, but they are spending less,” said Gerald Friedman, a professor of economics at the University of Massachusetts at Amherst and who has advised Sanders on his plan.

Sanders’ single-player plan is at odds with his opponent in the Democratic race, Hillary Clinton, who says the plan would never get through Congress. She calls for keeping the Affordable Care Act but tweaking it to try to slow the growth of out-of-pocket costs.

Sanders would cover a broad range of health needs, including inpatient and outpatient care, emergency room visits, primary care and preventative care. A patient would go to the doctor, present a health card and not worry about co-payments or deductibles.

Without monthly premiums, Sanders would finance the government system with a 2.2 percent income tax on all households, a 6.2 percent tax paid by companies, dramatically higher income taxes on those earning more than $250,000 a year, and projected savings of $300 billion a year through a more efficient system.

“A lot of the premiums are going to profits of the drug companies and insurance industry,” Friedman said. “When business are not paying premiums, those wages will increase and those wages will be spent,” providing a boost to the economy.

Critics skewer such claims. Thorpe produced a study claiming the plan would cost a staggering $2.5 trillion a year as opposed to Sanders’ estimate of $1.38 trillion annually. The non-partisan Committee for a Responsible Federal Budget calculates Sanders’ plan would fall at least $3 trillion short during a 10-year span.

In addition, Sanders would tinker with a health system that is widely regarded as the most advanced in the world. More than 90 percent of Americans currently are covered, either through their employers or by Medicare, which pays for health care for the elderly, and Medicaid, which provides health coverage to low-income people.

Americans gain care swiftly, without the long waits for elective surgery associated with Canada and Great Britain. A 2007 study by the National Bureau of Economics showed 86 percent of American women between ages 40 and 69 had mammograms compared to 73.6 percent in Canada, while 29 percent of Americans had colonoscopies compared to just 4.6 percent for Canadians.

In a 2015 report, the conservative leaning Fraser Institute in Vancouver claimed Canadians waited four weeks for CT scans, 10 weeks for MRIs and four weeks for ultra sounds.

“It’s true we overpay (to avoid) short-term inconvenience,” AEI’s Miller said. But he said the alternative is a system where “you are told what you are going to get and told you will have to wait for it.”

To Friedman, any waiting periods are because governments don’t put enough money into their system.

“The English spend well under half of what we spend per capita and it shows,” he said. “If they wanted to spend more, they would have shorter wait times.”

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