Republicans’ Modest Medicaid Changes

National Review Online

Thursday, June 05, 2025

 

Democrats say that Republicans are proposing steep cuts and fundamental changes to Medicaid. We wish. The reality is that the House Republicans passed a modest series of tweaks to the program that won’t do much to alter its spending trajectory.

 

Washington is currently engaged in a semantic debate over whether those tweaks amount to a Medicaid “cut,” which President Trump has said he opposes. More important is what the legislation would actually do.

 

Its main thrust on Medicaid is to adopt good-government measures that save money, rather than try again to repeal the Obamacare Medicaid expansion.

 

For instance, federal dollars are not supposed to finance Medicaid benefits to illegal immigrants, yet 14 states and the District of Columbia cover them anyway. The bill would have the federal government send less Medicaid money to those states in order to discourage the practice, or at least ensure that taxpayers in the other 36 states do not foot the bill. Republicans would also impose a new requirement that states obtain addresses from Medicaid enrollees, a bare minimum for stopping fraud. In 2012, the Supreme Court ruled that states were free to decide whether to take part in Obamacare’s expansion of Medicaid. The 2021 Biden stimulus bill provided additional financial incentives to the holdout states. Republicans would eliminate those. They would also make able-bodied adults work for at least 20 hours a week to receive benefits.

 

An additional measure would affect the ability of states to tax providers (such as hospitals and nursing homes). This is a scam by the states: They “tax” the providers, raise their health spending (which largely goes to the providers), and draw additional federal dollars for making this on-paper contribution to health care. The Republican bill wouldn’t eliminate the taxes, but would limit their abuse.

 

Taken together, these and other changes would reduce Medicaid spending by about $723 billion over the next decade, according to the Congressional Budget Office, and mean that 7.6 million fewer individuals will be insured in 2034 than otherwise. But these numbers deserve some context.

 

To start with, over roughly the past decade, thanks largely to Obamacare, Medicaid rolls have swelled by a staggering 22 million people, to over 78 million (that’s more than double the 37 million Americans living in poverty). This increase has largely been driven by able-bodied adults receiving benefits. Under current law, the federal government will spend about $8.6 trillion on Medicaid over the next decade. Under the Republican bill, Medicaid spending will still grow, and Washington would still allocate $7.9 trillion to the program.

 

Additionally, CBO has long said its estimates on the effects of changes to Medicaid involve a high degree of uncertainty, because their analysts cannot predict how states will respond to various changes. For instance, states have the ability to respond to limits on provider taxes by cutting spending elsewhere.

 

Elon Musk, after exiting DOGE, came out against the reconciliation bill, calling it “a disgusting abomination” because it does not grapple with the federal debt. On Wednesday, CBO projected that the bill would create $2.4 trillion in deficits, with $1.3 trillion in spending cuts too modest to offset the $3.7 trillion in anticipated revenue reductions.

 

With the public debt set to eclipse the next year’s entire economic output and on track to continue swelling, Musk is right to raise the alarm, but his experience with DOGE — as with Republicans’ modest tweaks to Medicaid — shows that there is no way for policymakers to get the debt under control with just a few tweaks to waste here and there.

 

Not until Republicans are ready and willing to make serious changes to entitlements, starting with structural reform of Medicaid and adding Medicare and Social Security to the mix, can a fiscal crisis be averted.

Democrats Go Wild

By Noah Rothman

Monday, May 6, 2019

It wasn’t so long ago that “epistemic closure” was supposedly the exclusive province of Republicans. For years, self-satisfied liberal analysts maintained that the Fox News Channel and talk radio had incepted a kind of mood disorder in the conservative body politic that refused all evidence or information challenging to its most deeply held beliefs. “Every intellectual movement needs to constantly question itself; otherwise it becomes stale,” wrote former-Republican-official-turned-GOP-critic Bruce Bartlett in a typical 2010 remark. “Conservatives have sort of reached a position of intellectual closure.”

Observers with no clear interest in the Republican Party’s well-being or the health of the conservative movement offered sorrowful aperçues about this disorder. In the wake of Mitt Romney’s 2012 loss, MSNBC host Rachel Maddow counseled conservatives and Republicans to “pop the factual bubble they have been so happy living inside if they do not want to get shellacked again.”

The Atlantic’s Marc Armbinder mourned as follows: “I want to find Republicans to take seriously, but it is hard.” That was not, he confessed, because the right’s more serious voices didn’t exist, but because “they are marginalized, even self-marginalizing.” The GOP, these ubiquitous liberal voices advised, would have to break its addiction to this self-reinforcing feedback loop if it was ever again going to be a nationally representative institution.

In 2019, the Democratic Party is giving signs of suffering from a form of epistemic closure of its own. After the 2010 midterm election brought Barack Obama’s aggressive legislative agenda to a halt, the party’s progressive wing has been in the political wilderness. The progressives spent most of the decade incubating a set of ambitious and far-reaching ideas—policies that never seem to have been examined along the way by a single skeptical eye. They have now emerged from their cocoon as the revivified Democratic Party has taken charge of the House of Representatives and readies itself for a 2020 challenge to Donald Trump. And the progressives who are besotted with them seem genuinely surprised that their policy preferences are being greeted with skepticism at best and astonishment at worst.

The emblematic policy is a smorgasbord of desiderata called the Green New Deal, only some of which is dedicated to environmental remediation. The Democratic Party’s climate catastrophists appear to have convinced themselves that the only surefire way to prevent runaway climate change is the radical transformation of the economy. To call this 10-year plan ambitious is an understatement. The initial proposal for a Green New Deal congressional subcommittee called for the shuttering of all fossil-fuel-generating power plants, replacing the country’s energy grid, enhancing its water-related infrastructure, upgrading “every residential and industrial building” in the United States, scaling back America’s industrial agriculture sector to “local-scale,” eliminating all greenhouse-gas emissions produced by transportation, and exporting this technological and paradigmatic revolution around the world.

This was no rough draft. Within weeks, more than 60 House Democrats co-sponsored a legislative resolution backing these measures. Democratic 2020 hopefuls including Elizabeth Warren, Kamala Harris, Kirsten Gillibrand, Cory Booker, Julian Castro, Pete Buttigieg, Tulsi Gabbard, and Amy Klobuchar have endorsed the Green New Deal, in whole or “in concept” as “aspirational.”

Given all this support, you might think that the kinks of this wild-eyed proposal were worked out long ago. You’d be wrong.

The Green New Deal’s chief proponent—Representative Alexandria Ocasio-Cortez—promoted the plan in a Frequently Asked Questions (FAQ) document published on her website. The FAQ explained that America would be reducing its fossil-fuel emissions to zero while eliminating nuclear-power generation, which would be beyond the capacity of existing technology to achieve in a 10-year time frame. The FAQ also said the Green New Deal would eventually retire the internal combustion engine. The document confessed that emissions from livestock and airplanes might not be eliminated entirely at the end of a decade, but we’d be well on our way. It would use “highspeed rail at a scale where air travel stops becoming necessary,” an implausible notion considering that even California’s progressive Governor Gavin Newsom couldn’t make a bullet train linking the Bay Area and Silicon Valley work at a reasonable cost. Indeed, the FAQ was disdainful of the notion that cost should be part of the equation. “The question isn’t how will we pay for it,” the FAQ insisted, “but what will we do with our new shared prosperity.”

The FAQ was a disaster. It was mocked, dismissed, and eventually scrubbed from the Internet. The Federalist’s David Harsanyi called it a manual for how to “tear down modernity.” The FAQ was “a recipe for economic Armageddon,” wrote the Washington Examiner’s Tom Rogan. In what may be the sincerest admission that Ocasio-Cortez had done her party no favors, the New York Times’ headline read, “Ocasio-Cortez Team Flubs a Green New Deal Summary, and Republicans Pounce.” But rather than fall on their swords and acknowledge the crudity of their rollout of the policy, Ocasio-Cortez’s advisers tried to convince observers that their eyes had deceived them. Robert Hockett, a Cornell law professor and adviser to Ocasio-Cortez, told Fox News Channel’s Tucker Carlson that the FAQ was a “doctored document that someone else has been circulating.” Her chief of staff, Saikat Chakrabarti, later claimed it was only one of many “early drafts” that “got leaked” to the press.

Once it was exposed to the sunlight, the Green New Deal instantly began to wilt. What would it do to help the millions of people who would be displaced amid the abolition of any occupation that is made possible by the burning of fossil fuels? Well, it commits the government to “guaranteeing a job” to “all people of the United States.” Ocasio-Cortez’s boosters were especially humiliated by a phrase in the FAQ that promised occupations to those who are “unwilling to work,” but the unwilling are surely part of a category as broad as literally everyone in America. To be sure, a federal jobs guarantee has been the great hope of the progressive left for generations, but it’s tough to generate traction for that kind of plan while at the same time outlawing most of the productive economy.

A Brookings Institution analysis of some of the leading proposals for a federal jobs program found that there are about 50 million Americans who could take advantage of such a program—some who are currently unemployed, but many more who are employed full- or part-time making less than $15 per hour. Such a program would have positive effects. The number of underemployed workers would collapse, poverty rates would decline, and wages would rise as competition for low-skill occupations increased.

But what kinds of work would this program guarantee? Some proposals would expand the ranks of teachers, teachers’ assistants, office-support professionals, personal-care providers, construction and maintenance workers, and police and security officers. But that would be little consolation for those employed in the millions of occupations that would be phased out by the Green New Deal, many of which require professional expertise accumulated over the course of a lifetime and provide competition commensurate with those skillsets. A petroleum engineer would not be fulfilled by his new position as a public safety officer making minimum wage.  

The most aggressive jobs programs would require $5 trillion over ten years, according to Brookings. But that wouldn’t cover the costs associated with providing displaced Americans job training, educational resources, and access to a college degree. That, too, is in the Green New Deal, but it’s not new. “Free” college has become a staple part of the progressive platform.

Making a four-year college degree a “debt-free” proposition has become a feature of the Democratic pitch to voters, and few have put as much meat on its bones as Senator Bernie Sanders. His plan would cost the federal treasury $470 billion over 10 years, but the financial strain is the least of his proposal’s objectionable effects. Ironically, “free college” would exacerbate the very inequality he and other progressives claim to oppose.

Prior to 1998, the United Kingdom experimented with taxpayer-funded university education, but the scheme became untenable when more and more people began to seek degrees as demand for skilled labor increased. The effect of “free college” was social stratification. Qualified students sought out schools with the most resources, while lower-tier colleges stagnated as their incentives to innovate dried up. These perverse incentives disappeared when the U.K. introduced market reforms into the higher-education system. And contrary to progressives’ expectations, enrollment continues to rise.

We can already see the pernicious effects of “free college” on social mobility in states that have tried to make college “debt-free.” State-level programs that cover the cost of college after students take advantage of federal aid divert resources to middle-class students and away from poorer degree-seekers. Two studies, one from the Institute of Higher Education Policy and another conducted by Ed Trust, found that state-level “free-college” programs without restrictions provided less benefit to lower-income students and undergraduate students who are over 25 years old than to the 40 percent of undergraduate students older than 25 or those who attend college outside the state where they reside.

“These students still cannot afford college because they struggle with non-tuition costs, such as books, housing, and transportation,” wrote Ed Trust senior higher-education policy analyst Katie Berger. This organization also found that the 200 “free college” programs in 41 states often limit eligibility based on GPA, credit accumulation, and residency. This helps manage costs but also has “a disproportionate impact on the students least served by higher education and fail[s] to address our nation’s college affordability problem.”

What’s more, states and municipalities struggling to comply with a federal higher-education mandate would face a widely expanded pool of applicants, forcing them to enlarge their unwieldy armies of non-faculty administrators. Between 1985 and 2005, the cost of a four-year degree exploded. In that same period, the number of faculty in higher education increased by only 50 percent while administrators increased by 85 percent and their staffs ballooned by a staggering 240 percent. Those administrative professionals are not performing make-work jobs. They’re navigating a complex labyrinth of federal regulations and performing managerial oversight that full-time faculty cannot. “Free college” would only exacerbate the conditions that have led college costs to increase by 500 percent in roughly those same two decades, which suggests that the estimated costs of Sanders’s proposal are on the low end.

For some Democrats, the promise of “economic security” would not be satisfied by the promise of employment and education. For them, “economic security” means a guaranteed income provided by the government that would, in one go, raise every American over the annual poverty threshold. While prominent Democratic lawmakers, including Hillary Clinton and Joe Biden, were sour on the idea only a few years ago, the Green New Deal subcommittee proposal endorses “basic income programs.” Goaded by tech-sector giants including Mark Zuckerberg, Elon Musk, and Richard Branson, the California Democratic Party has now embraced the idea of a “universal basic income.” Senators Kamala Harris and Cory Booker have also endorsed the concept of a “UBI.”

Ray Dalio, manager of the hedge fund Bridgewater Associates, estimated that providing every American with $12,000 per year—the current poverty threshold—would cost approximately $3.8 trillion every year. That is approximately 21 percent of GDP and about 78 percent of all tax revenues. If a price tag amounting to $38 trillion over 10 years doesn’t make you sweat, how about the fact that this old idea has been an objective failure everywhere it’s been tried?

Finland recently experimented with a program that provided 2,000 unemployed people with a basic income and no reporting requirements for two years. While the recipients experienced more happiness and less stress than the control group, the administrators found to their distress that the program members were not encouraged by their guaranteed income to go out and find a job. They simply lived off the pilot program’s per diem. What’s more, the Finnish government concluded that the program, applied to all its 5.5 million people, would require across-the-board income-tax hikes of nearly 30 percent. The nation discontinued the experiment. In July 2017, Ontario also experimented with a UBI and encountered many of the same problems as Finland.

This was all predictable, due to prior experience with the idea in…the United States. The “negative income tax,” as it was called, was essentially a minimum income that phased out as earnings increased. In 1968, the White House Office of Economic Opportunity selected a series of communities in New Jersey to test the NIT. The number of hours worked by the program’s beneficiaries declined, and those who lost a job while on this form of assistance took longer to find new work than did those without it.

What’s more, as the Stanford Research Institute (SRI) found, the experiment did not increase nuclear family cohesion, as theorists expected. Instead, it exacerbated the conditions that were leading families to come apart. “The SRI researchers,” the study read, “hypothesized that the availability of the income guarantee to some families reduced the pressure on the breadwinner to remain with the family, while the benefit-reduction rate also reduced the value to the family of keeping a wage earner in the unit.”

It goes without saying that there can be no “economic security” without the peace of mind provided by health-care coverage. Perhaps that’s why health-care mandates are also part of the Green New Deal, which—let us recall—is supposedly about fighting climate change. This is just one element of the Democratic Party’s embrace of ever more radical approaches to health insurance. After the end of the Obama presidency, the Obamacare plan was not only challenged programmatically by the Republicans who successfully sought to remove its mandate, but philosophically by Democrats pushing for a single-payer system. In 2017, one-third of the Democratic caucus in the Senate backed Bernie Sanders’s Medicare-for-all single-payer plan, and it has only become more popular in the years since. Today, more than half of the Democratic Party’s representatives in the House want to open Medicare up to all Americans. They regularly point to polling that suggests most voters are on their side. But that enthusiasm dissolves the minute Americans take a cursory glance under Medicare-for-all’s hood.

Presidential candidate Kamala Harris’s experience is illustrative. Shortly after launching her presidential bid, Harris sat down with CNN host Jake Tapper, who asked her about the provisions in the single-payer bill she co-sponsored that would all but do away with private insurance. “Let’s eliminate all that,” she said dismissively. “Let’s move on.”

The firestorm that followed these comments suggests that Harris hadn’t thoroughly gamed this out. “It would take a mighty transition to move from where we are to that,” said the number two Democrat in the Senate, Dick Durbin. Senator Tim Kaine added that he, too, would be uncomfortable forcing the 80 percent of Americans with employer-sponsored private insurance into a government program. “I’m not going to say you have to give it up,” he said. “You can’t just pull the rug out from underneath everybody’s feet,” Senator Gary Peters cautioned. Senator Chris Murphy advocated some form of health-care reform that would be “more politically palatable and ultimately more popular” than Harris’s “statutory prohibition private plans.” California Senator Dianne Feinstein said simply, “I’m not there yet.”

What we learned from this is that most Americans might not have known that expanding Medicare to all Americans essentially nationalizes the health-insurance industry. Sanders’s proposal makes employer-sponsored health insurance illegal and would likely crowd most other plans out of the marketplace by leaving them with an unsustainably small risk pool. That would force approximately 150 million Americans and their dependents into a government-sponsored insurance monopoly.

Every one of the 16 Senate Democrats who co-sponsored Sanders’s single-payer bill knew this, but Harris’s unwise acknowledgement prompted a Democratic stampede away from Medicare-for-all’s central plank. Many Senate Democrats balked at the idea that you could simply legislate a $900-billion-per-year industry out of existence overnight. Fellow presidential candidate Cory Booker, who also co-sponsored Sanders’s bill, went wobbly. “Even countries that have vast access to publicly offered health care still have private health care,” he said when asked if he, too, wanted to eliminate private insurance. “So, no.” With the pressure on, Harris relented. Her advisers confessed that the senator was suddenly amenable to health-care reform plans short of single-payer.

Once again, this progressive idea that gained such purchase among Democrats blew up on the tarmac the first time it met an even mildly skeptical audience. And the nationalization of the health-insurance industry was only the most obvious of Sanders-style single-payer’s drawbacks. Two independent analyses of his plan pegged its costs at around $32 trillion over 10 years. Those costs would presumably be offset by a series of assumptions, among them the accrued savings from lower prescription costs and a reduced administrative burden on hospitals. But most of the savings comes from the assumption that doctors and hospitals would make do with a radical reduction in payments—up to of 40 percent less than what they get from private insurers—without negatively affecting the quality or availability of care.

Environmental and economic policy aren’t the only public affairs in which the Democratic Party has allowed their youngish left flank to lead them into uncharted territory. The party is also staking out new ground when it comes to law enforcement.

Amid congressional negotiations aimed at avoiding another government shutdown, Democrats came up with a new demand: They wanted to decrease the number of beds in Immigration and Customs Enforcement (ICE) detention centers. Democrats proposed and Republicans eventually agreed to a 17 percent reduction in the carrying capacity of ICE facilities, ostensibly with the goal of forcing the Trump administration to prioritize the arrest and deportation of violent illegal aliens. But the artificial cap on immigration officials’ ability to detain and remove any illegal immigrant from the country—not just at the border—marked a dramatic departure for Democrats.

It was only a decade ago that Democrats as prominent as now–Senate Minority Leader Chuck Schumer made a conspicuous point of using the phrase “illegal immigrants,” an expression that has fallen out of favor on the left, to communicate their commitment to enforcing immigration law and to protect low-skilled American laborers from unfair competition. Democrats at the time often voted in favor of provisions that strengthened border security. Today, not only do Democrats oppose Trump’s border wall, they’re talking themselves out of support for any physical partitions along the border with Mexico. “I’d take the wall down,” said former Texas Congressman and potential 2020 presidential aspirant Beto O’Rourke when asked if he would order the removal of existing border barriers. Senator Gillibrand seemed to agree. “I could support it,” she said, presuming that tearing down the partitions that currently separate the United States and Mexico made sense. Of course, it most certainly does not.

When on rare occasion these Democratic utopians deign to consider how the country will pay for their multitrillion-dollar schemes, the stop-gap measures they support are laughable. Representative Ocasio-Cortez suggested higher marginal “tax rates as high as 60 or 70 percent” on your “10 millionth dollar.” But only about 16,000 Americans showed that much taxable income in 2016, the last year in which relevant government data are available. Her tax hike would raise only about $720 billion over a decade, a little more than what the United States spends on discretionary non-defense items in a single year.

Anyone who took a passing glance at Ocasio-Cortez’s proposal knew that Democrats would soon be looking for a bigger pool of Americans to squeeze. That’s why Senator Elizabeth Warren proposed a “wealth tax.” As with so many progressive proposals, the value of this plan rests entirely on the notion that this idea is common to Europe, so why shouldn’t it be adopted here? But this, too, doesn’t get the job done. Two University of California, Berkeley, economists estimated that Warren’s plan for a 2 percent tax on the assets of households worth over $50 million and a 3 percent tax on those worth over $1 billion would raise about $2.7 trillion over a decade. That would just about match what America shells out for its entitlement programs in one year. Or, it would, if Warren’s proposal was consistent with the Constitution, which it almost certainly is not.

The 16th Amendment, which gave birth to the federal income tax, permits the government to “levy tax on incomes,” not to expropriate private property when the government wants it. The courts have upheld this amendment’s original parameters by finding that inheritance taxes are constitutional only if they target the transfer of wealth, not the wealth itself. Moreover, Warren proposes a 40 percent one-time “exit tax” on Americans who try to evade her tax by renouncing their citizenship. This over-broad and discriminatory provision infringes on basic rights. Even if it didn’t, it’s probably unenforceable.

If progressives are looking for a bigger pool of money to tax, they can find it most readily through economic growth. More jobs mean more people paying income and payroll taxes, to say nothing of consumption taxes they pay when they patronize local businesses, which use that revenue in turn to hire more people, and so on. But for some on the left, this reliable cycle of growth isn’t just confusing, it’s unwelcome. Take, for example, the campaign waged by New York’s progressives against Amazon’s plan to provide New York City with 25,000 new jobs, each averaging an annual salary of $150,000.

The centerpiece of their grievance—one that eventually led Amazon to conclude that investing in New York City simply wasn’t worth the aggravation—was $2.8 billion in tax incentives available not just to Amazon but any company that qualified. These activists insisted that this money would be better spent at home on much-needed infrastructure projects. “If we were willing to give away $3 billion for this deal, we could invest those $3 billion in our district ourselves if we wanted to,” a triumphant Ocasio-Cortez insisted. This exposes a fundamental misconception about what tax abatements are. That money can’t be invested in other programs because it hasn’t been earned yet. Earnings have not yet been generated from which the money would come. And now they never will. Only if one sees all income and revenue as public property to be doled out as a product of governmental beneficence could one adopt such a deluded view of tax incentives. 

These progressives do not advocate a flatter and fairer tax code. They don’t resent tax incentives per se. They only resent this one firm, in part because it is so successful. Ocasio-Cortez was celebrating the preservation of the status quo at the expense of economic development and individual prosperity. This is what it means today to be a “progressive.”

The policies Democrats warmed to in their wilderness years are unlikely to be realized if one of them wins the White House in 2020, but that is cold comfort. An influential mass of Democratic voters support these radical ideas, and the party’s presidential candidates are campaigning on them. Democrats may be convincing themselves that the popularity of some of these proposals in polls insulates them from criticism, but that popularity has already proven illusory. If even gentlest incredulity can bring the whole progressive edifice crashing down, Democrats may want to consider going back to the drawing board while they still can.

The Questions Medicare for All Supporters Must Answer

By Michael Tanner
Wednesday, April 17, 2019

Vermont senator and Democratic presidential candidate Bernie Sanders has officially unveiled the latest version of his plan for a government-run health-care system. This year, his Medicare for All legislation is co-sponsored by at least five of his fellow presidential contenders: Senators Corey Booker, Kamala Harris, Kirsten Gillibrand, and Elizabeth Warren, and Representative Eric Swalwell. Several other prominent Democrats have voiced their support for the concept, if not Sanders’s specific version of it. And the polls show that voters might be receptive.

What’s more, there is a genuine need for health-care reform. Obamacare remains deeply troubled, with costs rising, choices restricted, and its promise of universal coverage unrealized. Meanwhile, Republicans are divided, dispirited, and largely clueless — opposed to Obamacare, but unable to formulate a plan of their own.

Medicare for All, to a large extent, has filled the vacuum created by that inability. But before we take it too seriously, there are a few questions that supporters must answer:

How will you pay for it? We don’t yet know exactly how much Sanders’s plan will cost, but the price is bound to be high: Previous versions of the plan were estimated to cost $32–38 trillion over the next ten years, and the senator’s latest version would provide even more generous benefits. In fact, both the legislation and the Sanders campaign’s summary of it are extremely detailed about all the benefits the plan would provide. It would cover virtually all hospital and physician care, preventive services, mental-health services, dental and vision care, prescription drugs, and medical devices. And, except for brand-name drugs, there would be absolutely no deductible, co-payment, or other out-of-pocket expenses. The plan would not only provide far more extensive benefits than private insurance plans or today’s Medicare; it would provide benefits in excess of those offered by other national-health-care plans around the world.

But when it comes to paying for all these goodies, Sanders is exceedingly vague. Neither the legislation nor his summary includes a funding mechanism. Instead, Sanders calls for “a vigorous debate as to the best way to finance our Medicare for All legislation.” As far as I know, vigorous debates don’t pay the government’s bills.

Sanders does provide a helpful list of possible tax hikes that could be considered: a 7.5 percentage point increase in the payroll tax; an income-based premium paid by all Americans (roughly a 4 percent income tax); significant increases in tax rates for those earning more than $250,000 per year; increased corporate taxes; big increases in the capital-gains tax; and a new wealth tax. Of course, some of the new taxes would be offset by the legislation’s elimination of insurance premiums and out-of-pocket costs. But most middle-income families would likely end up as net losers — and that’s without taking into account the drag on economic growth and job creation that would result from taxing risk-taking and entrepreneurship.

If you like your insurance, will you be allowed to keep your insurance? Roughly 91 percent of Americans have health insurance today, and polls suggest that most Americans are generally satisfied with their coverage. For example, Gallup reports that 69 percent of Americans are satisfied with their current insurance plan. Satisfaction runs even higher for Americans who receive employer coverage. But Sanders’s plan would summarily kick every American off their current plan and dump them into the new government-run system. In an interview for CBS News, Sanders gleefuly suggested that private insurance would be reduced to paying for “nose jobs.” Of course, the proposal’s backers can try to argue that in exchange for giving up their current plans, Americans will get something better. But voters may not believe them. Similar arguments didn’t fly with those who lost their insurance through Obamacare.

At its heart, Sanders’s plan is fundamentally anti-choice. It is a one-size-fits-all, government-knows-best concept. Americans may have a problem with that.

What about your doctor? Most of the cost estimates above assume that the new system will adopt Medicare’s price controls. But Medicare already provides extremely low reimbursements for many services, in some cases below cost. In fact, Sanders’s plan depends on a cut of up to 40 percent from the reimbursement that doctors currently receive through private insurance.

Providers have traditionally shifted some of their costs to private insurance. Others have simply refused to accept Medicare patients, or limited the number they do take. But those options would no longer be available under Sanders’s plan, which could lead many physicians, especially older and more experienced ones, to leave the profession.

It’s not just physicians that are likely to be hit by Medicare for All’s price controls. Research and development could be slowed or, in some cases, abandoned, too. That would mean fewer medical breakthroughs. Just think what would have happened if we had imposed medical-price controls across the board in, say, 1920. How much medical progress would have been lost?

What will happens after you wipe out the insurance industry? It is obvious that Sanders despises the insurance industry. Still, there would be real collateral damage from his plans to carpet-bomb the industry. Estimates suggest that as many as 1.8 million jobs in the insurance, benefits, and human-resources industries could be at risk. The median wage for these jobs runs in excess of $55,000 per year. These are the “good jobs at good wages” that the Democratic presidential candidates talk so much about. And while some might be absorbed into the new government bureaucracy, hundreds of thousands of others would likely have to find new work.

It is not generally the government’s job to protect people from changes in the economy, but, even so, the government should generally try to avoid deliberately wiping out entire industries all by itself. Sanders and his backers have seemed strangely unconcerned with that prospect so far.

Most coverage of the health-care debate has focused on the vulnerability and ineptitude of Republicans. That coverage is largely deserved. But sooner or later, Medicare for All supporters will be pressed to answer questions about their own plans. And at that point, they might find that voters become much less receptive to what they’re selling.

Medicare-for-All’s Bitter Pill

By Wesley J. Smith

Monday, March 11, 2019

Obamacare failed. There is no denying it anymore. The supposed “signature achievement” of the 44th president isn’t just opposed by Republicans. The Affordable Care Act has now been jilted also by many Democrats, who, like so modern-day Lotharios, have abandoned their once-burning ardor for state insurance exchanges to pursue “single-payer” health care.

Some readers are yelling, “That was the plan all along!” Yes, but the stew is not fully cooked. I doubt President Obama and the Pelosi Congress of 2009 and 2010 planned for their party to move so radically this soon. Oh well. With burning hatred for everything Trump as the accelerant — and with polling popularity of Bernie Sanders’s “Medicare-for-all” legislation of last year serving as a justification — much of the Democratic party now unapologetically embraces outright socialized medicine.

The newly filed 120-page “Medicare for All Act of 2019,” authored by Pramila Jayapal (D, Wash.), already has 106 co-sponsors — nearly half of the Democratic caucus — and it seeks to yank America hard toward the port side of the political spectrum. The bill — which resembles Medicaid more than it does Medicare — would transform our entire health-care system into an iron-fisted centralized technocracy, with government bureaucrats and bioethicists controlling virtually every aspect of American health care from the delivery of medical treatment, to the payment of doctors, to even, perhaps, the building of hospitals. It would obliterate the health-insurance industry and legalize government seizure of pharmaceutical manufacturers’ patents if they refuse to yield to government drug-price controls.

Here are some of the plan’s most destructive features:

It Would Drown the Country in Red Ink: True to its title, the bill promises comprehensive and encompassing “free” health care for everyone, including primary care, hospital and outpatient services, dental coverage, vision, audiology, women’s reproductive health services, long-term care, prescription drugs, mental-health and substance-abuse treatment, laboratory and diagnostic services, ambulatory services, the list goes on and on. Last year’s version of the plan authored by Bernie Sanders (I., Vt.) — which didn’t include coverage for dental and long-term care — was estimated to add $32 trillion to the budget over ten years. It is also not irrelevant that the current Medicare — which is far more limited — is scheduled to go broke in 2028.

Yes, There Would be Rationing: The bill creates a Physician Practice Review Board “to assure quality, cost effectiveness, and fair reimbursements for physician-delivered items and services.” The term “cost-effectiveness” is code for rationing, which the law acknowledges by prohibiting the use of assessment methods of determining “any value or cost-effectiveness that discriminate against people with disabilities.”

Private Payment for Covered Health Services Would Effectively Be Banned: The bill requires that all covered medical services be provided without any out-of-pocket cost to patients. The only fee to which a doctor, hospital, or other service provider would be entitled would be that paid by the government. Kiss the health-insurance industry goodbye.

Doctors and Hospitals Would Become Government Contractors: The state would not, strictly speaking, employ doctors directly. But doctors would be coerced into becoming government contractors by the requirement that they sign a “participation agreement” to be eligible to receive payments from the government. The participation agreement forces medical professionals and institutions to:

•    Accept the government fee as payment in full.

•    Allow the government to inspect their books for a variety of purposes and bury themselves in administrative duties, such as filing periodic reports.

•    Accept other provisions regulators may impose later — which, as we saw with Obamacare, could be onerous and intrusive and aimed as much at effecting social change as providing access to medical treatment.

Doctors who object to the provisions of a participation agreement would have little choice if they wanted to continue their careers, since they could be compensated for services only if they were deemed “qualified providers,” a status restricted to those who sign the agreement. (This is known in law as a “contract of adhesion,” meaning providers have no bargaining power or ability to negotiate terms.) If an individual provider’s agreement were revoked, he or she would be ineligible to be hired by a hospital or medical group, because their participation agreements require that they not employ any provider whose participation plan was “terminated for cause.”

Private-Pay Health Care Would Be Destroyed: What about doctors who wish to operate concierge practices, that is, accept cash directly from patients? Outside of the few non-covered fields such as cosmetic surgery, good luck! The doctor cannot have signed a participation agreement, since qualified providers “may not bill or enter into any private contract with any individual eligible for benefits under the Act for any item or service that is a benefit under this Act.” That means the doctor’s entire practice would have to be made up of people who opted not to be covered by the government, a very small pool of patients — the few very wealthy who could afford to foot their entire medical expenses out of their own pockets, and I suppose, “medical tourists” who travel to the U.S. for the purpose of obtaining treatment.

The Bill Seeks to Remove Profit in the Health-Care Sector: True to its socialist roots, the would eliminate profit in health care. Indeed, the bill states quite explicitly:

It is the sense of Congress that tens of millions of people in the United States do not receive healthcare services while billions of dollars that could be spent on providing health care are diverted to profit. There is a moral imperative to correct the massive deficiencies in our current health system and to eliminate profit from the provision of health care.

To enforce the “sense of Congress,” the bill forbids bureaucrats who determine the medical fees that will be paid to providers — which includes institutions as well as doctors and group practices — from taking into account the costs of “marketing” the “profit or net revenue of the provider, or increasing the profit or net revenue of the provider” or “incentive payments, bonuses, or other compensation based on patient utilization of items and services, or any financial measure applied with respect to the provider.” You think doctors have trouble receiving adequate compensation from Medicare and Medicaid now? Just you wait!

The Government Could Steal Pharmaceutical Patents: The bill requires the government to negotiate the price of medicines with drug companies. The bargaining power in that negotiation would — as with participation agreements — be all with the government. If a company refused to agree to the government’s price, the bill states, “The Secretary shall authorize the use of any patent,” by another company “for purposes of manufacturing such drug for sale under Medicare for All Program,” with compensation paid to the patent-owning company in an amount determined by the bureaucracy. How willing would pharmaceutical executives be to green-light the billions in investments required to develop new medicines knowing that the government could simply seize their patent and license another company to manufacture the drugs if they refused to sell it at a price the government demands?

Illegal Aliens Would Receive Free Health Care. Eligibility to receive benefits is not limited to citizens and aliens here legally. Rather, the bill reads: “Every individual who is a resident of the United States is entitled to benefits for health care services under this Act.” Illegal aliens living here are residents. Talk about a migration magnet. The only limitation on coverage for aliens is a provision that forbids eligibility to anyone traveling here “for the sole purpose of obtaining health care items and services provided under the program.” That’s much less than meets the eye. If an illegal alien traveled here to work, to escape violence, or to be with family, the exclusion clause would not apply. Further demonstrating the intent to cover those here illegally, enrollment in the program would be automatic “at the time of birth in the United States (or upon establishment of residence in the United States).” Residency could conceivably be established by a state driver’s license — now widely allowed illegal aliens — or even a utility bill. And get this: Unlike today’s Medicare identifier, the new Medicare Card would specifically not include a Social Security number, which many illegal aliens don’t possess.

Women Would Receive Free Abortion: Currently, the “Hyde Amendment” prohibits federal funding of abortion. That rare bit of culture-wars comity would be destroyed by the bill, which provides: “Any other provision of law in effect on the date of enactment of this Act restricting the use of Federal funds [i.e., Hyde] for any reproductive health service shall not apply to monies in the Trust Fund [the government entity that would be established to pay health-care costs].”

The Medicare for All Act of 2019 won’t become law while there is a Republican Senate and president. But the 107 co-sponsors in the House have put the country on notice. If the Democrats take over the government in 2021 as they — and some Never Trump Republicans — hope, by 2022, the United States health-care system will become a wholly controlled subsidiary of the United States government, bereft of liberty, increasingly sclerotic, managed by unelected bureaucrats churning out thousands of pages of onerous regulations, a centralized authoritarian mess from which the country’s health-care system would never recover.

America’s Entitlement Crisis Just Keeps Growing

By Michael Tanner

Wednesday, June 13, 2018

One problem with living in times as interesting as these is that important news often gets lost amid the swirl of rapidly changing events. If you blinked last week, you may have missed the latest report from the trustees of the Social Security and Medicare systems. But for the sake of our children and grandchildren, not to mention the country’s economic future, America’s looming entitlements crisis is worth paying attention to.

Start with Social Security. This year, the system’s trustees pegged its official “insolvency” date at 2034, the same as in last year’s report. Unfortunately for those under age 51, of course, we are now a year closer to that date than we were a year ago. And unless something changes dramatically between now and then, current law will require benefits to be slashed by 21 percent at that point.

But focusing on that top-line number badly understates Social Security’s real problems. Since 2009, Social Security has taken in less in taxes than it pays out in benefits. It has been using “attributed” interest to maintain a positive balance. But this year, benefits exceeded both taxes and interest, meaning that Social Security had to dip into the principal of the Social Security Trust Fund for the first time.

Of course, all of this is merely a bookkeeping fiction. The Social Security Trust Fund is not — and never has been — an asset that can be used to pay benefits. Instead, it is an accounting measure of how much money Social Security can draw from general revenues. Since the government doesn’t have any extra cash socked away — you may have noticed that we are running a $21 trillion debt — any Social Security shortfall only adds to the growing tide of red ink.

Overall, the trustees report that Social Security’s total unfunded liabilities now exceed $37 trillion, on a discounted-present-value basis over the infinite horizon.

And that’s the good news. Medicare is in even worse shape. This year’s trustees’ report estimates that the health-care program for seniors will hit technical insolvency by 2026, three years sooner than last year’s estimate. The program’s worsening financial condition is traced to “higher-than-anticipated spending in 2017, legislation that increases hospital spending,” and higher payments to private Medicare Advantage plans. Congress also repealed the Independent Payment Advisory Board (IPAB), an Obamacare provision that would have limited provider reimbursements.

Again, as with Social Security, focus on technical insolvency understates Medicare’s negative impact on the federal budget because of its reliance on Trust Fund accounting. In actuality, Medicare has been running a cash-flow deficit for decades.

The trustees’ report does estimate that Medicare’s finances will eventually improve — though not in our lifetimes — but only because it assumes savings built into the rapidly unraveling Affordable Care Act. If those savings fail to materialize (witness the repeal of IPAB), the program’s long-term liabilities could easily exceed $50 trillion or more.

The report also makes clear that there can be no long-term reduction in the national debt without addressing these massive entitlement programs. Social Security now costs nearly $1 trillion per year, and Medicare more than $700 billion. Those two programs alone account for some 40 percent of all federal spending. Congress can and should slash away at discretionary spending all it wants, but without entitlement reform, the debt will continue to grow.

It is long past time to face facts: We have lied to our kids. Social Security and Medicare cannot pay for all the future benefits that we have promised them — and until we admit that, we’ll continue down the road to national fiscal ruin.