I am not a socialist. I am not a supporter of Bernie Sanders for President. But “Medicare for All” has one very attractive feature. It will substantially lower the cost of healthcare in the U.S.
As I repeat many times on this website, our country’s biggest long term problem by far is the rapidly growing, out-of-control, and unsustainable national debt. The driving force of our debt problem is the rapidly increasing cost of entitlements. And the cost of entitlement spending is primarily driven by the cost of healthcare: Medicare, Medicaid and private healthcare in that order (since Social Security insolvency is a conceptually easy fix).
We have excellent healthcare in the U.S. but we pay too much for it, in fact 18% of GDP for all of healthcare, public and private. This is almost double what any other developed country pays. The federal government subsidizes the cost of U.S. healthcare (i.e. for Medicare, Medicaid and private) at over $1 trillion per year. This exceeds even our increasing annual budget deficits.
“On average, the government (i.e. Medicare and Medicaid) pays the government 87 cents for every dollar of their costs compared with private insurers that pay $1.45.” In other words, a government run “Medicare for All” program would force hospitals to operate much more efficiently and thereby lower overall hospital costs by an estimated 40%. This is the plus side of “Medicare for All.”
The negative side of a single payer system like “Medicare for All” is its likely negative effect on innovation. According to the economist Tyler Cowan, “The American healthcare system, high expenditures and all, is driving innovation for the entire world.”
Summary. The sixty four thousand dollar question is: “How do we dramatically lower healthcare costs in the U.S., which are burgeoning out of control, without losing the cutting edge medical advancements produced by the U.S. healthcare system?”