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May 24, 2019

How would 'Medicare for All' impact health care costs and quality? It's not clear, CBO says.

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    Congressional Budget Office (CBO) officials on Wednesday told House Budget Committee members that there currently are too many unknowns surrounding a single-payer health care system to determine how such a system would affect insurance rates and government spending.

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    During the House committee hearing, committee members questioned three CBO officials on the various ways a single-payer health system could affect spending, patients, and industry stakeholders. Wednesday's hearing marked the second House hearing on single-payer, and came weeks after CBO released a report on the risks and opportunities of a single-payer health system.

    House Democrats are expected to hold additional hearings on the subject in coming months, but so far no dates have been set.

    Republicans question CBO officials on single-payer

    According to Kaiser Health News, Republicans' questions focused on the ways in which a single-payer health system would affect provider payments and access to care.

    For example, Rep. Jason Smith (R-Mo.) argued that "Americans would have no choice but to wait longer and pay more for lower-quality care" under a single-payer health system.

    However, CBO Deputy Director Mark Hadley noted that access to care, cost, and quality all would be dependent on how Congress chose to implement a single-payer system. 

    For example, Hadley said it is not yet known what kinds of benefits a single-payer system would cover, how much it would pay doctors for those services, whether nurse practitioners or physician assistants would play a greater role in the health system, or what kind of cost sharing would be in place. In addition, Hadley said it is not clear if or how Congress would change the tax system to help pay for single-payer coverage.

    Without answers to those questions, Hadley said CBO cannot determine how health spending would change under a single-payer system, compared with the current health system.

    Democrats divided over single-payer vs public option

    The hearing also highlighted a rift among Democrats, with some touting the potential benefits of a single-payer system and others preferring to leave the system as is and instead offer a government-backed "public-option" health plan.

    For example, Rep. Ro Khanna (D-Calif.), who supports single-payer proposals, said a single-payer health system would enable employers to increase wages for the lower 50% of workers because they would no longer have to subsidize health care.

    In response, Hadley said, "It's possible to design that system, yes." But, again, he added that any projections are dependent on several unknown variables, such as how employers would pass those savings on to employees and how taxes to support the single-payer system would be structured.

    Jessica Banthin, CBO's deputy assistant director for health, warned Khanna that employers might not pass on all of those savings if the new system were financed through a payroll tax. However, Khanna said, "Most economic studies show that the stagnation of our wages over the last 40 years are directly tied to increasing health premium costs."

    Other Democrats, such as Democratic presidential candidate Rep. Seth Moulton (D-Mass.), argued that CBO's report and the testimony indicated the government should offer a public-option health plan instead of transitioning the entire system to single-payer.

    Moulton said his experience receiving health care through the Veterans Health Administration has shown him "the good, the bad, and the ugly" of a single-payer health system, and that led him to favor a public option. "Competition is good," Moulton said. He added, "Just like we have options for delivering packages, I think we should have options for delivering health care."

    A 'complicated, challenging' transition

    Overall, Hadley said, "The effects of [a single-payer health] system could vary greatly depending on the details."

    But even without those answers, Hadley said shifting the United States to a single-payer health system "would be a major undertaking" that "would involve significant changes for all participants." He added, "The transition to a single-payer system would be complicated, challenging, and potentially disruptive" (Luthra, Kaiser Health News, 5/22; Sullivan, The Hill, 5/22; Ellen McIntire, CQ News, 5/22 [subscription required]).

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