‘Medicare for All’ needs dose of economic reality

“Medicare for All” has become a political/campaign slogan for many Democrats.

Medicare is a proven system, they argue, with lower costs to consumers, so why limit it to the 44 million or so older and disabled people currently served by it?

And health care is a basic right, they add, so this would be what Sen. Martin Heinrich, D-N.M., says is a way to “deliver quality health care results at a reasonable cost.”

To Americans struggling to pay rising health care premiums for private insurance and facing ever-higher deductibles and co-pays, this certainly has appeal. In fact, it’s an idea worth discussing.

Heinrich and Sen. Tom Udall, D-N.M., are among 14 Democrats who have co-sponsored legislation that would allow individuals and companies to buy into the federally run program.

But even the most ardent supporters of the plan were confronted with a new reality last week: namely that Medicare as it currently is structured will become insolvent in 2026. That’s three years earlier than the previous estimate.

So how, you ask, would it work fiscally to let millions of people buy into the program at below-market premiums?

Excellent question. Medicare isn’t free, and it isn’t cheap. Many current Medicare recipients also pay for supplemental private insurance plans to cover the many medical and drug costs Medicare does not cover.

Yet Medicare sure is cheaper than quality private insurance plans. That’s partially because there is no “middle-man insurance company” and more importantly because it has the ability to dictate what it pays doctors and hospitals for services. It’s a complicated system that has different payments for the same procedure based on where it is delivered. In other words, a massive bureaucratic exercise that also extends to billing the government by providers.

Medicare has always struggled fiscally, even with most working Americans paying into the system via payroll tax years before they use it. Congress in the 1990s built in a formula that tied increases in doctor payments to the nation’s ability to pay for them. Roughly speaking, the increases had some relation to economic growth.

That failed miserably as providers continually persuaded Congress to do temporary “fixes” that allowed increases in excess of the formula. That Medicare “patch” made political — if not economic — sense in that senators and representatives respond to constituents, who respond to doctors and hospitals telling them their care is at risk.

Congress finally realized the futility of this and threw in the towel on the sustained growth formula in 2015.

None of this is to say “Medicare for All” is an idea that should be discarded. Rather Heinrich, Udall and others deserve credit for putting it on the table.

But there are huge questions. Do you want the government to control and ration health care? Do you want a system where you call your congressman to lobby for a colonoscopy?

Just as important are the dollars and cents. How do you take a system where insolvency is right around the corner and expand it with a bunch of new customers paying low rates? And can you do this without actually threatening the existing system?

All this needs a thorough airing, but our political leaders should keep a key tenet of the Hippocratic Oath in mind: “First, do no harm.”