Nowhere can we see this more clearly than on the idea of universal health coverage, usually shorthanded as “Medicare-for-all,” which is quickly becoming consensus among Democrats. If you’re an advocate of that idea, you can be sure that whenever it comes up in an interview, you’ll be pressed on how you are going to pay for it.
That happened this weekend to future congresswoman Alexandria Ocasio-Cortez when she appeared on CNN’s “State of the Union.” Jake Tapper asked her how she was going to come up with $40 trillion over 10 years to pay for it (a number from one estimate of one particular plan). And she answered by saying that other countries manage to sustain universal systems, and it is an investment that will continue bringing dividends.
Tapper replied by saying, “You say it’s not pie in the sky, but $40 trillion is quite a bit of money…” to which she replied by talking about all the costs that come from having so many people with inadequate coverage or no coverage, to which he replied, “I’m assuming I’m not going to get an answer for the other $38 trillion.” You get the idea.
In some quarters, that kind of exchange is met with tut-tutting (“The $40 trillion question Alexandria Ocasio-Cortez couldn’t answer” read one headline) or outright glee that the liberals’ Achilles’ heel has been exposed. But the truth is that the people who think they are being hard-headed and asking for specifics are missing the point of a proposal like universal health coverage.
So let me suggest a different question that might be asked not to those advocating Medicare-for-all, but to those opposing it and those journalists assuming it is unrealistic: How do you propose to come up with the $50 trillion you want to spend on health care over the next 10 years?
Because that’s what the status quo is going to cost. The questions about the cost of Medicare-for-all seem to come from a bizarre alternate universe where we aren’t spending anything now on health care, and we’re going to have to come up with a shocking amount of new money to fund this crazy idea of giving everyone coverage.
This $50 trillion number comes from the most recent projections by the Centers for Medicare and Medicaid Services, which say that America will spend $3.7 trillion on health care this year, a figure that will increase by 5 to 6 percent per year in the coming years. Their projections go only to 2026, so I extended them out two years, assuming a 6 percent increase per year, to reach a full decade from 2019 to 2028. When you add the numbers up, you get $50.3 trillion over the next 10 years. That’s what we’re going to spend if we change nothing.
Where will that money come from? Well, from all of us. It will come in the form of taxes that pay for Medicare, Medicaid, the Children’s Health Insurance Program and Veterans Affairs. It will come in the form of premiums taken out of paychecks, and co-pays, and deductibles. It will be paid by the American people, one way or another.
So if Medicare-for-all actually costs $40 trillion, we would save $10 trillion. Hooray!
Now, of course, there is the matter of exactly how we’re going to shift all that money around, which taxes would be raised and how to counter the influence of those who could lose out (such as insurance and drug companies), all of which are important questions. But saying that the people who want to save $10 trillion are the ones who are offering something unrealistically extravagant is bonkers. It is as though I said that because you’re heating your house by burning $100 bills, maybe you should buy a gas furnace instead, and you replied, “Spend $5,000 on a furnace? That’s crazy! What am I, a Rockefeller?”
And yes, it’s not just relevant but vital to point out whenever this question comes up that we’re already spending more on health care than every other country on earth. We spend twice as much as other developed countries, and they cover all their citizens.
I’m not going to go into all the varied reasons why universal coverage is a good thing or into the many models of universal coverage, each of which has its own strengths and weaknesses. I happen to think that a hybrid system like that in France — a basic, universal government program that covers everyone, along with supplemental private insurance for people who want more benefits — is both an effective system and something that we could reach from where we are now. But that’s a discussion for another day.
What matters for the moment is this: If you’re going to demand that advocates of Medicare-for-all explain how they’re going to come up with $40 trillion, you have to immediately ask advocates of the status quo how they’re going to come up with $50 trillion. Because that’s what they’re proposing to spend.