OK first, my apologies for the clickbait title. I am a huge Warren fan, and was really waiting with bated breath when she announced her intention for announcing her plan for how she would cover M4A without raising taxes (on you and me, pretty sure there aren’t many in the 1% reading DK).
Of course, to explain a plan for covering the costs you must first estimate those costs, and this is where I think she screwed the pooch, or at least was extremely overcautious, because she used the analysis by the Urban Institute which recently put the number at $52 trillion over ten years.
I would like to call attention to this article by two highly respected authors who have spent many years researching the financing of health care. Please read the whole article, my purpose here is really just to call attention to the PNHP research.
A few highlights (there are basically three places where the UI analysis falls flat, according to the critique):
The UI report assumes that single-payer reform would reduce insurance overhead to 6% of claims ($234 billion) from the current level of about 10.6%. In contrast, overhead in Canada’s single-payer system is only 1.8%, and overhead in the fee-for-service Medicare program is 2%.
And Taiwan, a small but true single-payer system, is about 1-2% while providing both Eastern and Western medicine. The UI is basically claiming that for some unknown reasons M4A will be more complex than these real world examples — without any supporting evidence.
This one also makes no sense:
UI completely ignores the huge savings on hospital administration and doctors’ billing under a streamlined single-payer system. Every serious analyst of single-payer reform has acknowledged these savings, including the Congressional Budget Office, the Government Accountability Office, the Lewin Group (a consulting firm owned by UnitedHealth Group), The Political Economy Research Institute, and even the Rand Corporation.
The most egregious error is in their estimates of utilization, which again have no evidence from the real world and appear to be based on the opinions of some hospital administrators. But in reality,
No surge in care utilization materialized when Medicare was implemented and millions of previously uninsured seniors got coverage. [...] Moreover the same dynamic occurred when the ACA newly-insured 20 million people, or when Canada implemented its universal coverage program; neither hospitalizations nor physician visits increased. Instead of a huge surge in utilization, doctors and hospitals reduced the amount of unnecessary care they were delivering in order to deliver needed care to the newly-insured.
This third offense is probably the most wonk-intensive of the critique, so if you really want a good feel for it please read the whole critique, I don’t want to push fair use although I’m quite sure the two authors would probably have no objection.
I hope this adds to your understanding of the situation and will help when the inevitable pearl clutchers descend on us with their railing about how it can’t be done. It can, and Warren has a plan for it. I should mention of course Sander’s analysts (Pollin, et. al.) have suggested other ways that are equally worth investigating; there’s more than one way to pay for something that is less expensive than the thing you are currently paying for.
