Is it a coincidence that 2020 will mark the 100th anniversary of H. L. Mencken’s famous remark that “there is a well-known solution to every human problem—neat, plausible, and wrong” and that Elizabeth Warren with her various plans is the living epitome of that observation? In her Washington Post column Megan McArdle summarizes Elizabeth Warren’s recently published plan for financing “Medicare For All”:
And even if she somehow pushed her program through, there’s a good chance that courts would strike it down, because so many of the revenue-raisers may be unconstitutional. Between the problems with her wealth taxes (Article I, Section 9), her plan to divert employer premiums to the government (ex post facto taxation of health benefits) and her requirement that state and local governments toss $3 trillion into the kitty (anti-commandeering doctrine), Warren would be a couple of adverse court decisions away from a $15 trillion hole in her $20 trillion plan.
Stripped of the Warren plan’s math-like veneer and the unreasonable reasoning, this is all rather embarrassing — or to steal a phrase, more of a slogan than a plan. It’s certainly not one of the highlights of Warren’s campaign.
Besides being politically difficult, of questionable popularity, and unconstitutional, Sen. Warren’s plan suffers from the deficiency, as I have previously noted, of bad assumptions. To believe that it will actually “work” you need to believe that the Congress will do something it has refused to do in the past—hold the line on Medicare reimbursement rates—and that providers a) have excess capacity and b) will be willing to work more for less money. None of those are credible.
“a) have excess capacity and b) will be willing to work more for less money. None of those are credible.”
And yet you clearly think we need to control costs so people will need to work more for less. Providers have a lot of control over capacity.
“n the 1990s and 2000s, Medicare spending per enrollee grew at an average annual rate of 5.8 percent and 7.3 percent, respectively, compared to 5.9 percent and 7.2 percent for private insurance spending per enrollee (Figure 4).
Between 2010 and 2018, Medicare per capita spending grew considerably more slowly than private insurance spending, increasing at an average annual rate of just 1.7 percent over this time period, while average annual private health insurance spending per capita grew at 3.8 percent.”
https://www.kff.org/medicare/issue-brief/the-facts-on-medicare-spending-and-financing/
Steve
Maybe in the long term. In the short term not so much. Unless you’re talking about changing the standard of care to suit. How is that not accusing present providers of fraud?
I just think that a commitment to controlling costs is a prerequisite for universal coverage rather than a likely outcome of it. Putting it in 12 step terms, first we’ve got to hit rock bottom.
What I would like and what we can do are two different things. I would like for Congress to constrain Medicare reimbursement rates to the non-health care rate of inflation. They refused to do that for over a decade. You think they’re going to start now? There’s a phrase for that in public policy theory: “time inconsistency”.
I would also like Congress to control illegal immigration by implementing and enforcing a much more rigorous version of eVerify. They won’t do that, either.
Everyone seems to want as much health care as they can get while looking around for someone else to pay for it. This morning Pete Buttigieg complained about Elizabeth Warren’s plan to end educational indebtedness because it included subsidies for the very wealthy. Present Medicare has the same problem. Why is it different?
” In the short term not so much. Unless you’re talking about changing the standard of care to suit. How is that not accusing present providers of fraud?”
It varies from state to state but how you use mid levels generally allows for a lot of flexibility. A 5%-10% increase would be pretty easy. If you want to do a 25% or more increase then you need to change standards. Certainly on the in patient side you could increase things 5%-10% without much change. On the outpatient-PCP side is where you might have issues. I dont follow their literature but I know that within our own network there is a lot of room to use mid levels more.
“They refused to do that for over a decade. You think they’re going to start now?”
Per capita increase over the last 8 years was 1.7%, half of what we had in the private sector, our current alternative (the GOP plan). Do I think that will continue? Not if the GOP stays in power in some form. Health care is not a priority for them and they will mostly try to put things in the private sector with that more rapid increase in costs.
Steve,
The KFF link states the lower, 1.7% increase was due to the following factors:
In other words, all temporary external factors, not any inherent efficiency in medicare.
KFF goes on to estimate that medicare per capita costs will outpace private insurance costs over the next decade –
So the modest 1.7 increase was likely an aberration, not the new normal. Medicare costs per capita increases are likely to be very close to PHI increases over the next decade, just as were during the 1990’s and 2000’s. Costs are increasing because Congress got rid of sequestration, they removed the therapy cap (thanks to industry lobbying), and removed the IPAB – all passed on a bipartisan basis – among other factors.
Andy- That first paragraph? There is no reason why those need to stay temporary. Yes, the Republicans (with some Dem help) are overturning a lot of that but my point is that it is possible to cut Medicare costs, we just need the political interest and will. This is not so much a structural thing as Dave keeps sort of claiming.
Steve
The “doc fixes” were approved in both Congresses with Republican majorities and Democratic majorities. It’s blithe to say that they can change. Yes, they can. We can also balance the budget, pay off the national debt, and abolish the National Helium Reserve.
You seem to think you are meeting your burden of proof. You aren’t. To do that you must demonstrate that they will.
“Yes, the Republicans (with some Dem help) are overturning a lot of that but my point is that it is possible to cut Medicare costs, we just need the political interest and will.”
I agree, but the reality is that our political system has never demonstrated any ability to do this. I wish things (a lot of things) were different but they aren’t.
“This is not so much a structural thing as Dave keeps sort of claiming.”
Correct me if I’m wrong, but my interpretation is that your arguments about how much cheaper Medicare is compared to private insurance is the structural argument. I don’t see it in the numbers. I think government policy could, in theory, make Medicare cost growth consistently lower than PHI, but no one really seems interested. Instead, the GoP and Democrats are either offering utopian fantasies or nothing at all.
“I agree, but the reality is that our political system has never demonstrated any ability to do this.”
We did it for 8 years. Let’s do it again.
“how much cheaper Medicare is compared to private insurance is the structural argument.”
Medicare is cheaper mostly because everything costs less. On average, similar care costs 20%-25% less. Last I looked the historical rate of increase for PHI was a bit higher, but then that is with PHI having at least some motivation to control costs (in theory) and with minimal efforts to control Medicare costs. So it wouldn’t even take a lot of effort to slow costs. Just do what we already did from 2010-2018. Add to that some minimal effort to control drug costs. Freeze specialist pay for a year or two.
Steve