Mr. Sanders points to government-run systems abroad to claim that his Medicare-for-all plan is realistic. But his differs from those in substantial ways. Meanwhile, Ms. Warren last week released a detailed explanation purporting to show how her system would function and, crucially, how the federal treasury could finance such a vast entitlement expansion. The result is inescapable: As written, it couldn’t.
Ms. Warren claims that the cost, while large, is not as massive as one might expect: $20.5 trillion over 10 years, trillions short of what other experts — including those at the nonpartisan Urban Institute, which has conducted a rigorous analysis of Medicare-for-all — reckon would be needed. Only the wealthy would pay more, she promises.
Ms. Warren gets there by making some extremely dubious assumptions. First, she claims she can drop the price of prescription drugs deeply below what Medicare currently pays — and even below brand-name prices in Canada. Even if this were politically possible, it would raise huge questions about defunding the research, testing and diffusion of new therapies. Second, she declares that she could restrain the growth in health-care costs to a pace policymakers neither here nor abroad would be able to achieve. The United States is no longer an outlier among industrialized nations on health-care cost inflation. But it would be exceptional if it managed to restrain prices the way Ms. Warren suggests she could.
Lastly, Ms. Warren would slash health-care administration costs. No doubt the nation’s current system is complex and top-heavy, and a streamlined single-payer system would save money on paperwork. But the Urban Institute’s Linda Blumberg argues that Ms. Warren’s plan might go too far in the opposite direction. Under-administering a system in which the government would set prices, when it is unclear which price levels for which services would strike the right balance between cost, quality and patient access, could easily lead to shortages of doctors, facilities or services, particularly when Ms. Warren would impose a hard upper limit on costs. Scant oversight of a system in which patients are promised unlimited care at no cost is an invitation for waste, fraud and abuse.
Then there are the potential economic consequences of the taxes Ms. Warren proposes to raise to meet her fantasy $20.5 trillion price tag. Former treasury secretary Lawrence H. Summers warns that Ms. Warren would so clobber upper-income Americans that she would risk a stock market crash and a recession.
All Americans should have decent health-care coverage. They should also have good schools, good roads and world-class universities. Nations with single-payer plans have had to make real-world compromises among these various needs. If the Warren and Sanders plans sound too good to be true, it’s for a reason.