Public “Medicare for all” saves U.S. taxpayers 1.5 trillion dollars


Contrary to Michael Bloomberg and former Starbucks CEO Howard Schultz, potential 2020 Presidential candidates, a completely public health care program could save taxpayers 1.5 trillion dollars, says Prof. Robert Pollin of PERI at UMass, Amherst and Adam Gaffney, President of Physicians for a National Health Program

SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

As the 2020 presidential race gets underway, one of the main issues being discussed is Medicare for All. Now, Senator Kamala Harris and Senator Cory Booker and Elizabeth Warren have all announced their candidacies. And Senator Sanders is expected to do so very soon. They have all, of course, presented versions of Medicare for All. Weighing in recently on all of their proposals were two billionaires who also are considering a run in 2020, and that is the former New York City Mayor Michael Bloomberg and the CEO of Starbucks Howard Schultz. Now let’s listen to Bloomberg making an argument against Medicare for All, where he says it won’t work.

MICHAEL BLOOMBERG: I think you can have Medicare for All for people that are covered, because that’s a smaller group, and a lot of them are taking care of Medicaid already, Medicare. But to replace the entire private system where companies provide health care for their employees would bankrupt us for a very long time. It’s just not a practical thing.

SHARMINI PERIES: Then there was Howard Schultz, the CEO of Starbucks, making a slightly different argument on the View.

SPEAKER: Well, I just want to ask quickly, what are the Dems too left on, you think? What issues will [inaudible].

HOWARD SCHULTZ: I don’t know Senator Harris, but listening to her last night say we should abolish the insurance industry as a way to go forward on health care, that alone would wipe out millions of jobs of Americans. And that is the kind of extreme policy that is not a policy that I agree with.

SHARMINI PERIES: Joining me now to discuss these criticisms of Medicare for All are Bob Pollin and Adam Gaffney. Bob Pollin is a Distinguished Professor of Economics and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst. Thanks for joining us, Bob.

BOB POLLIN: Great to be on. Thank you, Sharmini.

SHARMINI PERIES: And Dr. Adam Gaffney is president of Physicians for a National Program and is a pulmonary and critical care physician at Harvard Medical School and the Cambridge Health Alliance. Adam, thank you for joining us.

ADAM GAFFNEY: Thanks for having me.

SHARMINI PERIES: Now, before we get into the issue at hand, we should note that Senator Sanders’ health care proposal is actually somewhat different from those that Senator Kamala Harris and Senator Cory Booker have presented, and that is that Sanders’ proposal would put health care completely in the public sector, while Kamala Harris and Cory Booker’s proposal would maintain some sort of a mixed private-public program. But let’s deal with Bloomberg’s argument against all of this first. Let me go to you, Bob. Bloomberg says it would cost just too much, and thus be unpractical. What is your response to him?

BOB POLLIN: Well, Michael Bloomberg’s assertion that Medicare for All would bankrupt the country is a complete non sequitur, as a matter of fact. Medicare for All will save money. We’ll save a lot of money. All we have to do is look at how other countries run their health care systems. If you look at the average for the advanced economies other than the United States, they’re spending between 9 and 11 percent of national income, of GDP. We’re spending about 18 percent of GDP with our private system mixed in with the public Medicare and Medicaid systems.

Now what is the difference if we spent 11 percent of GDP as opposed to 18 percent that we are spending? That’s a difference of about a trillion and a half dollars. So we are basically wasting a trillion and a half dollars. That’s money that’s going primarily to the private health insurance companies, and the pharmaceutical industry that other countries are not spending because we have this incredibly complex, inefficient, unfair healthcare system. Medicare for All would save money. That’s the thrust of our study that was put out at the end of November analyzing Medicare for All for the United States. By moving to a public health insurance system, we think we would be able to provide good coverage for everybody, every resident of the country, including all people who are uninsured, all people who are under-insured, who aren’t able to meet their bills, even though they have health insurance. We think we can cover everybody. And on top of that we can save about 10 percent relative to the $3.3 trillion dollars we are now spending in the United States on health care.

SHARMINI PERIES: All right. Adam, let me also ask you that question. Bloomberg says it would cost too much, and therefore be unpractical. What’s your response to that?

ADAM GAFFNEY: Well, there’s a couple ways to look at this. I mean, first I would echo what Professor Pollin said about the comparison between the United States and other high income nations that spend a lot less in health care than we do. But the way to look at this is what it actually costs, and why would he even say that it would cost more? Now, the thing is we agree we want to cover everyone in this country, and we agree, or most of us agree, that people are getting a better deal as things are currently. High copayments, high deductibles, high premiums. So we agree that we want to cover everyone and improve coverage for everybody else. If that’s the goal, Medicare for All is unquestionably the most efficient way to get there. If we can’t afford universal health care by way of Medicare for All, then we can’t afford it at all.

Now, we can afford it. OK? We can afford it because Medicare for All produces a number of key efficiencies. First and foremost, and this is in Professor Pollin’s report, is the great administrative waste that the private health insurance imposes on the whole health care system. Hospitals have to basically have armies of billers and coders to go through every chart. This is an enormous amount of money. My colleagues estimated that going to a complete Canadian-style health care system would save $500 billion a year on administrative savings. Professor Pollin also has very significant savings in his report. And then look at pharmaceutical companies and pharmaceutical firms. How much could be saved on that end? Well, we spend about twice as much on drugs. Our drug prices are about twice what they are in other high income nations.

So let’s say we were to have a National Health Insurance Program and bring those down by 50 percent. You’re talking about, you know, another more than $100 billion a year in savings. So yes, there will be new costs to cover everybody. There will be cost to eliminate copayments and deductibles, and to make sure that not one person in this country is uninsured. But there’s huge savings on the other side of the ledger. And the problem with people like Schultz and Bloomberg is they’re not actually aware of the issues, and they don’t actually know what’s on the other side of the ledger.

SHARMINI PERIES: All right. Bob, let me ask you this question. Now that Kamala Harris and Cory Booker and others are declaring their candidacy, and they are trying to come somewhere down the middle, a little bit of this, a little bit of that. Is it worth, perhaps, considering that in order to get more buy-in from, say, corporate Democrats?

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