Column: Bernie Sanders is wrong about getting private insurers out of the healthcare system

Medicare for all received a shot of adrenaline the other day as Vermont Sen. Bernie Sanders, who wants to be president, reintroduced legislation intended to provide health coverage to all Americans and put private insurers out of business.

As usual, conservatives responded by mischaracterizing and outright lying about the proposal, and by framing the debate by asking the wrong question: How will you pay for it?

That’s an important consideration, to be sure. But it’s not where the conversation needs to begin.

A more appropriate question to start things off is: How many people will it cover?

The failure of U.S. policymakers to use this as the basic premise of healthcare reform is why tens of millions of Americans remain uninsured, and why this country pays more for healthcare than any of its economic peers.

“A productive debate would focus on the pros and cons of any proposal versus the alternatives,� said Martin Gaynor, a healthcare economist at Carnegie Mellon University.

“Scare tactics and slogans, such as calling single-payer proposals ‘a government takeover’ or saying the current system is a ‘moral outrage,’ move us farther away from figuring out how to best reform our healthcare system,� he told me. “There are tradeoffs and hard choices, and it does no good to pretend there are simple answers.�

Sanders’ latest bill would establish universal coverage by opening the Medicare insurance system to all. It would expand current benefits, including long-term care at home. It also would prohibit private plans from competing with the government program.

There are a number of provisions in the legislation that, for me, make it a non-starter. The biggest is its total rejection of a role for private insurers.

While that might be satisfying on a karmic level — payback for all the denied claims and acts of greed — it discards the potential benefits of competition. We know from the example of some other developed countries that private insurers can bolster and supplement a state-run insurance program.

“The most successful international models take a hybrid approach,� said Dana Goldman, director of the USC Schaeffer Center for Health Policy and Economics.

“Singapore, for example, has excellent outcomes at reasonable cost,� he said. “While the Ministry of Health has overall responsibility for total spending, care is delivered by the private sector.�

I’m partial to what’s known in healthcare circles as the single-payer Bismarck model (after Prussian Chancellor Otto von Bismarck, who originated the idea in 1883). This is the system used by Germany, France and Japan.

Under this approach, funds are pooled by the government, and heavily regulated private insurers compete by offering more affordable coverage to younger people, or additional benefits for those willing to pay more. This wouldn’t be that far from the Medicare Advantage plans that are now part of the U.S. system.

Agree or disagree with that proposal, the significant thing is that it starts with a goal of universal coverage and fills in the blanks from there. Anyone with an alternative approach would have to walk the same road.

The White House and congressional Republicans immediately attacked Sanders’ plan as being unrealistic, unreasonable and downright un-American — yet once again offered no proposals of their own to expand coverage or address market dysfunction that results in sky-high costs.

“Self-proclaimed socialist Sen. Bernie Sanders is proposing a total government takeover of healthcare that would actually hurt seniors, eliminate private health insurance for 180 million Americans, and cripple our economy and future generations with unprecedented debt,� the White House said in a statement.

Seema Verma, head of the Centers for Medicare and Medicaid Services, amped up the scare tactics by telling Fox News that “with the government takeover, we can see — from other countries — that we’re going to have long wait times and rationing of health care.�

First, Medicare for all wouldn’t be a “government takeover� of healthcare. It would be a state-run insurance program intended to lower coverage costs by spreading risk through the entire population.

Second, the rationing and wait times for elective procedures seen in Canada and elsewhere don’t necessarily have to be imported to the United States. We can learn from the examples of others and design our system accordingly.

As I’ve proposed in the past, we could establish a sort of Federal Reserve of healthcare, an independent body of experts that would oversee the macroeconomics of treatment and ensure a more efficient and effective marketplace.

Republicans routinely zero in on the biggest weakness of all Medicare-for-all plans, the scarcity of detail about how they’d be funded. They cite estimates that Sanders’ plan could cost the federal government $32 trillion over the first 10 years.

That sounds frightening, even for conservative voters who would happily increase the national debt by trillions of dollars to cut taxes for corporations and rich people. It is, however, a red herring.

Single-payer cost estimates typically don’t reflect the fact that current healthcare spending — topping $3 trillion a year — would be incorporated into the new system, so we’re not talking about $32 trillion in new spending.

Many economists predict that overall healthcare spending gradually would decline under a single-payer system as efficiencies take hold and bureaucratic overhead is reduced.

People’s taxes would go up under Medicare for all, conservatives counter. That’s true. Taxpayers fund government programs.

What critics always forget to mention is that higher taxes would replace the nearly $11,000 that every American currently pays in average premiums, co-pays and deductibles.

The reality is that, according to most estimates, people ultimately would pay less in taxes than they now pay for annual coverage and treatment costs.

“People often talk about how many additional billions the government will spend but don’t compare it to how much less individuals and employers would spend on premiums,� said Matthew Lewis, an associate professor of economics at Clemson University.

“They often discuss how much your taxes would have to go up to fund this, but not how this compares to the decrease in spending on premiums, or increase in salary people would get to compensate for no longer receiving employer-sponsored care,� he said.

Reforming the U.S. healthcare system requires mature discussion and a willingness to act in the best interests of the American people.

What it doesn’t need is fear-mongering and blatant falsehoods.

Sanders’ Medicare-for-all plan isn’t perfect. Nor are most other proposals being floated by Democratic candidates. But at least they’re trying.

Which is a damn sight better than claiming to be “the party of healthcare� and then doing everything possible to screw things up.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to [email protected].