WASHINGTON—"Medicare for All" might sound too good to be true, which means it probably is, says Seema Verma, the administrator for the Centers for Medicare & Medicaid Services (CMS).
Health care as a "right" and "Medicare for All" became memes during the 2016 presidential campaign of Bernie Sanders's (I-Vt.), and have become increasingly mainstream among left-leaning politicians. Medicare for All, also known as single-payer health care, effectively takes away employer-sponsored health care plans and the private health insurance industry, and replaces it with a single, government-run health insurer.
Four days before the midterms, Verma's post challenges arguments made by Sanders and other Democrats that a single-payer health care system will lower costs, increase access to care, and make health care more affordable for those it was meant to serve—America's elderly and those with disabilities.
"Those advocating ‘Medicare for All,’ due to lower administrative costs, need to understand those costs are lower principally (or in part) because of an under-funded, inadequate system of review to detect fraud and abuse," she wrote.
According to Congressional Budget Office, total outlays for Medicare in 2018 are projected to be $707 billion.
"Imagine funding the rest of government, from defense to education, at a level 30 percent less than today, or imagine a $2.5 trillion tax hike," Verma wrote, citing the Mercatus study, "because the cost of health care to the government would more than double."
What both Sanders and Verma do agree on, however, is that drug prices are too high, especially compared to other countries.
Sanders has argued that if the government were the sole payer for health care, it would have almost infinite leverage when negotiating drug prices with manufacturers, and thus be able to drive down prices.
Under the current system, Verma says that wouldn't be the case because the program is a "price taker" for drugs when it comes to Medicare Part B, which mainly covers drugs that are administered in a doctors office.
"What’s worse, Medicare actually fuels higher drug prices, by paying doctors and hospitals an add-on fee for drugs that is set at a percentage of the cost of the drug," she wrote. "With this setup, it’s no wonder that prescription drugs represent Medicare’s fastest-growing area of spending."
Taking aim at the claim that Medicare will still provide quality care for the 60 million people in the program, Verma argues that the reason the program is able to provide the level of care it does is that the 170 million people with private insurance subsidize the program.
Again citing the Mercatus study, which estimates doctors would receive 40 percent less under Medicare for All, she predicts that it would create a shortage in doctors and longer wait times for basic services.
"Ask yourself why proponents of ‘Medicare for All’ are advocating such a radical reform of health care just five years after the full implementation of the Affordable Care Act (ACA), often referred to as Obamacare. It is certainly not because the ACA has worked," she wrote. "‘Medicare for All’ is Obamacare on steroids."