
Medicare for All – How Can We Pay for It? - howard941
https://therealnews.com/stories/medicare-for-all-how-can-we-pay-for-it
======
throwaway010718
On our current trajectory, "who pays" isn't the most pressing issue. Suppose
Medicare for All does save 10% as the article claims, if the cost just keeps
rising then it only buys a little more time before no entity can foot the
bill.

100 million people in the US have diabetes or pre-diabetes according to the
CDC.[1] Diabetes costs $14,000/yr(?) and people are getting it at an earlier
age and living longer. Of all the threats to the US, this one is particularly
insidious.

There is also the concern that big pharma (along with big-sugar/corn) has too
much influence over congress. The U.S. is the only country besides NZ to allow
direct to consumer drug advertisement. That fact alone makes me lose faith in
the government. Is it prudent to give more power and money to our government
when they appear to be complicit and bereft of root cause solutions to address
the rising cost ? Bloomberg, as NYC's mayor, seemed like the only politician
who was willing to pass unpopular and extreme legislation by way of banning or
limiting certain foods.

[1] [https://www.cdc.gov/media/releases/2017/p0718-diabetes-
repor...](https://www.cdc.gov/media/releases/2017/p0718-diabetes-report.html)

~~~
lhl
As a tangent, I do think it's increasingly obvious that T2D (and metabolic
syndrome) is a disease that's specific to the modern western diet and that
lifestyle interventions are very effective at stopping or reversing T2D
entirely.

Here's a recent publication on a controlled study being done by Virta Health
et al. Of especial interest will be Fig 3 showing just how effective
carbohydrate restriction was vs "usual care":
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/)

IDF has also recently published case studies on the effectiveness of
intermittent fasting as T2D treatment for those that can't/won't carb
restrict:
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/)

To expand on the costs a bit, the ADA has similar estimates, and in their 2018
report [1] estimates $16.75K/ppy costs (also cited by the CDC [2]), with
direct+indirect costs estimated at $327B/yr, and that 1/7th of every health-
care dollar is spent on diabetes-related costs. The Milken Institute [3]
recently published a report on American Obesity [4] that gives even bigger
numbers: "chronic diseases driven by the risk factor of obesity and overweight
accounted for $480.7 billion in direct health care costs in the U.S., with an
additional $1.24 trillion in indirect costs due to lost economic
productivity."

[1] [http://www.diabetes.org/advocacy/news-events/cost-of-
diabete...](http://www.diabetes.org/advocacy/news-events/cost-of-
diabetes.html)

[2]
[https://www.cdc.gov/diabetes/diabetesatwork/plan/costs.html](https://www.cdc.gov/diabetes/diabetesatwork/plan/costs.html)

[3]
[https://en.wikipedia.org/wiki/Milken_Institute](https://en.wikipedia.org/wiki/Milken_Institute)

[4]
[https://www.milkeninstitute.org/publications/view/944](https://www.milkeninstitute.org/publications/view/944)

------
bko
> So we say by shifting everything to a single-payer system, with the
> government being the Medicare equivalent for everybody, we’re going to get
> about 9 percent savings for the whole system. Then we say, well, in Europe,
> on average they pay 50 percent less for drugs than we do. And we say, OK,
> well, we’ll take a more conservative number. We’ll say 40 percent less as
> opposed to 50 percent less.

Cutting reimbursements for drugs by 40% is going to have impacts on everything
from R&D to what drugs are available. Drug companies median profit margin
varies widely but its about on average 12-14% [0]. I don't think you can just
wave a magic wand and say now you get 40% less and you'll just deal with it.
It's also naive to believe you can just export some reimbursement model from
another country to the US and just plug and play.

> That gives us 6 percent total savings in the system. Then we say Medicare
> rates for all providers, all doctors, hospitals, dentists. Everybody gets
> the Medicare rate. And that saves about 7 percent savings for the system
> cost.

Same problem here. Paying doctors and hospitals 7% less will have an impact.
Prices aren't just some arbitrary number you can change on a whim and have no
effect.

> And then finally we have high levels of inefficiency with so-called doctor-
> induced demand, where there’s too many procedures using high tech when you
> don’t need it, because they can charge more.

This is just a change from bottom up (doctor) to top down (some medicare
committee). I agree that there is a problem with over-treatment but I'm
skeptical that a rule based system would be the ideal way to address this
problem.

> And there’s fraud. And so there’s a lot of estimates at very high levels of
> fraud and excessive costs. We took that service delivery savings as modest,
> maybe 1 to 2 percent. Add them all up, you get 19 percent savings.

Traditionally government services are more susceptible to fraud as there is
less of an incentive to address fraud. I'm not sure why a single federal
agency would be more effective at rooting out fraud than smaller private
insurers.

Overall I'm skeptical of a top down approach primarily because they mainly
address the problem by lowering prices by fiat rather than addressing the
systematic issues of high costs.

[0] [https://yourbusiness.azcentral.com/average-profit-margin-
pha...](https://yourbusiness.azcentral.com/average-profit-margin-
pharmaceuticals-20671.html)

~~~
hnmonkey
If you're the only customer for their businesses, yes you can waive a magic
wand and say now you'll get 40% less and deal with it. Especially if you're
the government and it's a law. It's like Walmart with their suppliers. If
you're the biggest baddest around you can kinda do what you want.

Certainly it will have impacts on R&D but are you suggesting that new drugs
won't get created anymore? Don't drugs get created all throughout the EU?

~~~
krupan
Yes, we'll have the Walmart of healthcare. Very inspiring.

~~~
toufiqbarhamov
We already have that, we’re just paying Whole Foods prices to get it.

~~~
hnmonkey
Exactly. We're controlled by a handful of pharma/healthcare companies
currently. I'd put more faith in the government being on the other side than
those companies.

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reasonablemann
I don't understand why there's so much resistance to having everybody save a
huge amount of money while at the same time allowing everybody to be
healthier. Boggles the mind.

~~~
berbec
Part of it is distrust of government. Part of it is status quo. Part of it is
belief they will be worse off in the new system. Part of it is not wanting to
have to supliment other's heath care. Those are the real underlying reasons,
as far as I can tell.

~~~
ams6110
For me, it's that I can't think of anything the government really does a good
job at while also controlling costs.

~~~
charlesism
The good news is that government only needs to keep costs lower than the
private system. That doesn't require a good job of controlling costs.

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awinder
I don’t understand the reasoning / appeal of a new national sales tax for half
of the new funding, as opposed to making this financed through payroll taxes
exclusively. Maybe it’s to emphasize the 8% cost savings right off the bat to
get private companies on board, but man, solving the escalating cost problem
is a gift on its own. And we have already done the dance of trickle down, how
about we directly deliver cost relief to the worker one time...

~~~
howard941
I don't really wanna defend it but I'll try. If it's payroll taxes then it's
only workers paying, but financed partially by sales tax broadens the base to
include trust fund babies as well as retirees and public aid recipients.

------
jganetsk
There is no problem paying for Medicare for All. The US federal government
does not face an affordability constraint in dollars. It can pay for anything
it wants, the only real constraint is inflation.

[https://www.forbes.com/sites/francescoppola/2018/04/17/every...](https://www.forbes.com/sites/francescoppola/2018/04/17/everything-
youve-been-told-about-government-debt-is-wrong/)
[https://www.nytimes.com/2017/10/05/opinion/deficit-tax-
cuts-...](https://www.nytimes.com/2017/10/05/opinion/deficit-tax-cuts-
trump.html)

~~~
ikeboy
MMT is largely nonsense, sorry. Inflation would be the immediate result of
such a policy and would largely destroy the spending ability of such money
printing.

No such thing as a free lunch.

~~~
jganetsk
"MMT is largely nonsense, sorry."

You have not rebutted any content in either of the articles I posted.

"Inflation would be the immediate result"

I said that inflation is a risk, as does every MMTer. The conversation we
should be having is "how much inflation is really at risk here?" And inflation
has been, in fact, quite elusive for a long time. A bit of inflation would be
a good thing.

"such a policy"

What policy? MMT is not a policy, it's a description of the way the economic
system already functions. It's an explanation of why the Federal Reserve can
engage in $4 trillion of QE and not cause inflation to budge. It's an
explanation of why the US federal government can run $1 trillion annual
deficits and not cause interest rates to skyrocket. It's most definitely not
nonsense.

"No such thing as a free lunch"

It's not free. The government is paying for it, and will later collect that
money back in tax revenues. That's the way the government buys anything.

~~~
ikeboy
The first is just saying you can borrow as long as nominal growth exceeds the
interest you need to pay. Sure, but that doesn't mean you can borrow an
infinite amount, since as you borrow more interest will rise.

"What policy" you're advocating for printing money to spend regardless of the
cost, which means costs will certainly rise.

If you want to have the "is the current inflation target optimal, or should we
have a higher one" debate, don't pollute it by implying that spending doesn't
matter. I agree the with the second article that the risk is inflation, not
bankruptcy, but that doesn't mean it's not a real risk or that we should have
larger deficits.

~~~
jganetsk
Of course spending matters. MMT is in agreement. Here's the main public
advocate of MMT tweeting that:

[https://twitter.com/stephaniekelton/status/10443137336008744...](https://twitter.com/stephaniekelton/status/1044313733600874496)

Before we continue this discussion, you need to define "printing money".
Because I will provide the definition: in the MMT worldview, printing money is
synonymous with government deficit spending. Can we agree on that definition?

Ok, then inflation is a controllable problem. Because what I'm suggesting is
increasing government spending to pay for Medicare. That's like... pushing on
a gas pedal. It can create inflation. Now, there are 2 ways to deal with
inflation:

1) Stop pushing on the gas pedal. Cut spending. 2) Raise taxes. That's like
pushing on the brakes. Because my definition of "printing money" is "deficit
spending", and raising taxes lowers the deficit.

So we shouldn't be afraid of inflation, because it is something we can
control. And if we start by spending first on Medicare, and then taxing later
to control inflation... then we've stabilized the size of the deficit while
growing the overall size of the federal government budget. And there's
Medicare for All.

~~~
ikeboy
No, you can print money without spending. Central bank is independent.

~~~
jganetsk
I'm not sure what we are really arguing about at this point.

I'm claiming that the government would increase deficit spending to pay for
Medicare For All.

If you want to discuss the impact of having a larger government deficit, I
would agree with you that inflation is the potential risk. We can have that
discussion. I'm probably more optimistic about the risk of inflation and the
effectiveness of mechanisms for controlling inflation.

If you want to discuss government debt default risk for a country that prints
its own currency, MMT and many mainstream economists says it is zero.

If you want to discuss technical constraints on the size of the deficit for a
country that prints its own currency (through mechanisms like bond vigilantes,
etc) MMT would say there is no constraint. There is plenty of evidence to
support this. Just look at what's happening with the US federal government
deficit right now.

If you want to discuss what fraction of GDP is appropriate for government
spending, that's an interesting conversation and would be curious to hear your
thoughts.

Central banks are a necessary mechanism, as you point out, and need to do
their job well. But the main questions in this debate are around fiscal
policy, not monetary policy.

------
ikeboy
Are we supposed to believe a report issued at the Sanders Institute Gathering
represents an unbiased evaluation of Bernie Sanders' health plan?

------
gammateam
Would it be that hard of a stretch to convince people that a healthy
population is more important and productive than how much you trust your
neighbor’s work ethic and role in a darwinism nightmare?

------
sjg007
It's pretty simple, through taxes. Most of the tax we would pay would be akin
to the premiums we pay for private insurance... remember that we already pay
medicaid and medicare taxes now.

~~~
martinald
The US pays more as a percentage of GDP for Medicaid/Medicare/Veterans
healthcare than the UK spends on the entire NHS (which covers 100% of people).

~~~
qasdf
This is often overlooked in the health care debate. If the US paid European
prices for health care, the government could give everyone free healthcare
without raising taxes at all.

~~~
berbec
I think they could lower taxes. [1]

1: Citation needed

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Glench
Defund the military.

