Experts highlight the many cost questions around Medicare for All at hearing

U.S. Capitol at dusk
The House Rules Committee holds the first hearing for the Medicare for All Act 2019. (Pixabay/skeeze)

As Democratic lawmakers brought forth their first Medicare for All proposal for a hearing on Capitol Hill Tuesday, advocates testified about the urgent need for universal health coverage to protect patients from crippling medical bills.

But experts also highlighted how many questions there are about just how much it would actually cost the U.S. to make any Medicare for All proposal happen. 

One estimate put the cost of Medicare for All proposals at between $32.6 trillion and $38.8 trillion over the first 10 years of implementation, said Charles Blahous, senior research strategist at the Mercatus Center at George Mason University, a nonprofit, free-market-oriented research group. That would put it between 11% and 13% of the GDP in 2020.

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But Blahous was careful to stress that many of the economic factors are still unknown as the country does not have “historical experience with an expansion of this size.” Realistically, says Blahous, even if the country doubled the amount of income taxes, the results would still not cover the money needed to fund the change.

He was among the witnesses testifying on a bill introduced in February by Rep. Pramila Jayapal, D-Washington, and backed by dozens of other Democrats that would transition the entire U.S. health system into a single-payer structure over the course of two years. The legislation also suggests generous benefits—including for long-term care—with no deductibles or copayments.

Dean Baker from the Center for Economic Policy and Research argued that the economic questions are solvable. For one, Medicare for All is affordable primarily from shifting employment premiums to the government, he said, and additional revenue will be gathered through reduced administrative costs. Plus, lower costs can be associated with better overall care.

He also stressed that funding could come from a reduction in what the U.S. pays for prescription drugs and medical equipment. But he does warn it’s not an overnight change and that everyone needs to allow for a transition plan.

RELATED: Verma, Azar take aim at ‘Medicare for all’ proposals 

Panelists stressed the need for a change in the payer system immediately, so patients don’t skip necessary preventative care or so they are not forced into decisions about paying rent or paying for prescription drugs. Plus, one system would give equal access to all healthcare within all demographics, plus delete any deductible out-of-pocket payments by patients, they argued.

Doris Browne, M.D., immediate past president of the National Medical Association, talked about how necessary it is to creating equality in care.

Browne talked about how minority groups are more likely to experience health inequities and have disproportionate amounts of chronic diseases. She stressed that health equality and opportunity are linked and supported adopting a system more like that of the military, in which every member is treated equally.

Medicare for All has been sharply attacked by Republicans with administration officials regularly commenting on concerns that Medicare for All would harm the program seniors depend on. Democrats are divided on the issue with many stopping short of pushing for Medicare for All even as they support universal healthcare. Rep. Tom Cole, R-Oklahoma, opened the session with a familiar mantra saying, “Medicare for All really means Medicare for none.” It would robbed consumers of their choices, because it would end employer-based coverage. He also noted the costs, a minimum of $32 trillion over the next decade, based on some expert analyses.

“It would dramatically change the American healthcare system for everyone and, in my opinion, not for better,” he said.

But as several in the gallery pointed out, the costs of healthcare in the U.S. are already extraordinary compared to any other wealthy country, and the new system may cost more in some areas but reduce costs in others, such as in payer and provider administration.

There was concern by several attendees about the impact the change in the system would have on providers. Economists estimate switching everyone over to a Medicaid rate would result in a 40% payment reduction for hospitals and 30% reduction for doctors, potentially putting some lower-margin providers out of business.

RELATED: As Sanders revives 'Medicare for All,' Dems mull Plan B

Although not at the hearing, several national organization submitted letters and testimony supporting the Medicare For All Act. National Nurses United has long championed such a plan, and called the hearing an "important first step" toward overhauling the system.

“The Medicare for All Act of 2019 is the right bill at the right time, but to make this legislation a reality will require the right action. We’ve seen families forced to choose between eating or paying prescription co-pays and we’ve seen patients forgo recommended procedures because their insurance won't cover them,” Bonnie Castillo, executive director of National Nurses United, said in a statement.

By contrast, America’s Health Insurance Plans (AHIP) voiced strong opposition to the Medicare for All Act of 2019 and other single-payer plans like the one championed by Sen. Bernie Sanders, I-Vt.

“These proposals do nothing to address our top challenge: a growing health care affordability crisis,” AHIP said in a statement. “We remain concerned that these proposals would result in higher taxes on all Americans, higher total premiums and costs for people enrolled in private coverage, longer wait times, and lower quality of care.”

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