A new study revealed that the so-called “Medicare for All” plan promoted by Sen. Bernie Sanders (I-Vt.) and endorsed by a host of Democratic Party candidates seeking election would increase government health care spending by $32.6 trillion over 10 years.
The study was commissioned by the Mercatus Center at George Mason University, a public research university in Virginia, and was released July 30.
Sanders (I-Vt.) popularized the health-care plan while using it as a talking point during the 2016 election. Sanders’s plan is an extension of Medicare, an insurance program used by seniors. All Americans residents would get insurance coverage with no copays or deductibles for medical services.
But, according to the study, historic tax increases would be required to allow the government to replace what employers and consumers currently pay for health care. Medicare For All would deliver major savings on administration and drug costs. However, it would see an increased demand for healthcare, driving up spending on the program, the report found.
“[Medicare For All] would add approximately $32.6 trillion to federal budget commitments during the first 10 years of its implementation (2022–2031),” wrote Charles Blahous, the study’s author. Blahous was a senior economic advisor to former President George W. Bush and was nominated to the Board of Trustees of the Social Security Trust Funds under President Obama.
What’s more, the program’s “projected increase in federal healthcare commitments would equal approximately 10.7 percent of GDP in 2022. This amount would rise to nearly 12.7 percent of GDP in 2031 and continue to rise thereafter,” he wrote.
Blahous said that his estimates “are conservative” as they “assume the legislation achieves its sponsors’ goals of dramatically reducing payments to health providers, in addition to substantially reducing drug prices and administrative costs.”
Presidential hopefuls like Sen. Kamala Harris (D-Calif.), and Sen. Elizabeth Warren (D-Mass.) have endorsed a “Medicare For All” program. Alexandria Ocasio-Cortez, who beat House Democratic Caucus Chairman Joe Crowley (D-N.Y.) in a Democratic primary and is now the face of the democratic socialist movement, also promoted a “Medicare For All” program.
But such a plan “would markedly increase the demand for healthcare services while simultaneously cutting payments to providers by more than 40 percent, reducing payments to levels that are lower on average than providers’ current costs of providing care,” Blahous wrote.
In a statement, responding to the study, Sanders attacked the Mercatus Center for receiving funding from the conservative Koch brothers.
“If every major country on earth can guarantee health care to all, and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States cannot do the same,” Sanders wrote in a statement to ABC News. “This grossly misleading and biased report is the Koch brothers’ response to the growing support in our country for a ‘Medicare for all’ program.”
Sanders’s office has not done a cost analysis for “Medicare for All,” his spokesperson told ABC.
Blahous said that the study is his own work, refuting claims that he’s being paid by the Koch brothers, ABC reported.
Kenneth Thorpe, a health policy professor at Emory University in Atlanta who was also a health policy official in the Clinton administration, said the Mercatus study reinforces previous studies that show that the plan would cost tens of trillions of dollars to implement.
“It’s showing that if you are going to go in this direction, it’s going to cost the federal government $2.5 trillion to $3 trillion a year in terms of spending,” Thorpe told ABC. “Even though people don’t pay premiums, the tax increases are going to be enormous. There are going to be a lot of people who’ll pay more in taxes than they save on premiums.”