Medicare for All: Tens of Trillions and Cuts to Providers

The U.S. House held its first ever “Medicare for All” hearing on April 30 before the House Rules Committee, chaired by Massachusetts Representative Jim McGovern (D). The House Ways & Means Committee, chaired by Chairman Richard Neal (D-Mass.), also announced it would hold a Medicare for All hearing at some point.
In his opening remarks, McGovern said the hearing was the beginning of a process to expand healthcare coverage to all Americans and that the bill being debated – H.R. 1384, The Medicare for All Act of 2019 from Rep. Pramila Jayapal (D-Wash.) – would guarantee that people with disabilities receive the care they need and would improve the life of countless individuals.
But Ranking Member Tom Cole (R-Oklahoma) said Medicare for All would result in higher taxes for everyone and result in millions of Americans being moved off their employer-sponsored plans. He also said H.R. 1384 would enroll millions of younger individuals into the Medicare program even though they have not fully contributed to the Medicare Trust Fund.
The witnesses were also split on the benefits of the sweeping healthcare legislation. Dr. Charles Blahous, a senior research strategist for the Mercatus Center at George Mason University, said Medicare for All would cost between $32 and $40 trillion over a 10-year period. He also noted that H.R. 1384 would increase total healthcare spending to $50 or $60 trillion over 10 years, with those cost increases driven by the coverage of new services and an expected uptick in utilization. He also projected that hospital payments would be reduced by 40% while physician payments would decline 42%.
Dr. Dean Baker, senior economist, Center for Economic and Policy Research, said H.R. 1384 could lower administrative costs because providers would only have one payer to manage. He said that after incorporating the elimination of administrative costs, the bill would cost approximately $25 trillion over 10 years. He also said there could be significant potential savings from reforming the way healthcare is delivered and purchased by high-cost patients. Dr. Baker added that Congress could lower healthcare costs by eliminating the patent protections for prescription drugs and lowering Medicare payment rates to providers.
Many healthcare interests, including MHA, have argued that defending and shoring up the Affordable Care Act is the more important current healthcare option.