May 2, 2019

The risks (and opportunities) of 'Medicare for All,' according to CBO

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    Transitioning the United States to a single-payer, government-run health care system would be "complicated, challenging, and potentially disruptive," but could lead to universal coverage and a more efficient health system, according to a Congressional Budget Office (CBO) report released Wednesday.

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    Report details

    House Budget Committee Chair John Yarmuth (D-Ky.) requested that CBO evaluate proposals to shift the United States to a single-payer health system and address a number of questions about such proposals. Yarmuth did not ask CBO for an estimate of the costs of a specific single-payer proposal. As a result, the report does not include a "traditional score of how many people would gain or lose coverage under the bills advanced by Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.), let alone how much those bills would cost," Politico's "Pulse" reports.

    Transitioning to a single-payer model raises key questions, CBO finds

    CBO said transitioning the United States to a single-payer, government-run health system would require policymakers to make a number of decisions, such as how the federal government would pay for nation's annual health care expenditures, which totaled $3.5 trillion in 2017. Policymakers also would have to determine:

    • How hospitals and physicians would be paid;
    • How quickly U.S. residents with private health plans would need to transition to the government-run plan;
    • What costs would be paid by consumers;
    • What would happen to employees in the private health insurance market if the industry is eliminated or scaled back;
    • What health services would be covered under the government-run plan;  and
    • Whether the private health insurance market would continue to exist in some form.

    Single-payer presents both 'opportunities and risks,' CBO finds

    CBO said it is difficult to predict the effects of a single-payer model "because the existing evidence is based on previous changes that were much smaller in scale."

    For instance, CBO in the report acknowledged the shift could cause disruptions, but those disturbances could be minimized if policymakers decide to gradually transition the United States to a single-payer model. In addition, CBO said the U.S. uninsured rate and health care spending could either increase or decrease, depending on how policymakers decide to design the single-payer health care system.

    CBO highlighted a number of the "opportunities and risks" of a implementing a single-payer health system.

    The 'opportunities'

    But CBO noted that a single-payer model likely would result in a more efficient U.S. health care system and universal coverage. CBO also predicted that a single-payer model would generate savings from lower administrative costs in the health system. Further, CBO predicted there would be a greater incentive to invest in preventive medicine and improve the overall health of U.S. residents under a single-payer model.

    The 'risks'

    However, CBO said a single-payer health system also likely would lead to higher government spending and taxes, and could increase the amount of time U.S. residents wait to access new treatments and technologies as more people gain comprehensive insurance. CBO said, "If the number of providers was not sufficient to meet demand, patients might face increased wait times" under the single-payer model.

    While CBO said the federal government "[i]n the longer run … could implement policies to increase the supply of providers," the report also warned that, if policymakers relied on current Medicare fee-for-service rates under a single-payer model, hospitals would "probably reduce the amount of care supplied and could also reduce the quality of care."                                                                                                       

    CBO said other potential limitations of a single-payer model would include:

    • Patients being required to see a primary care doctor before a specialist;
    • Patients being required to try less-costly treatments before using costlier alternatives; and
    • Treatment denials.

    Reaction

    Industry stakeholders and policymakers had mixed reactions to the report, with some saying the report helped support proposals to transition the United States to a single-payer health system, and others saying the report highlighted the pitfalls of such a system.

    Rep. Steve Womack (R-Ark.) said the report "illuminates several consequences of Democrats' one-size-fits-all health care approach, such as higher premiums, out-of-pocket expenses, and taxes."

    Chip Kahn, president of the Federation of American Hospitals, said a single-payer system is "a high-stakes gamble." He said the CBO report "raises sobering questions. But what needs to be asked, is it worth the risk of upending health care for every American when the law on the books already contains a roadmap to universal coverage?" He added, "Instead of such a high stakes gamble, lawmakers should build upon the current foundation so we can continue to improve quality and affordability for families across the country."

    Humana CEO Bruce Broussard said the insurer will not support legislation that would eliminate the private health insurance market. Broussard said the "holistic view" that private insurance offers "is critical to the long-term success of the program and the ability to offer greater benefits and more security for individuals."

    But Yarmuth, the Kentucky Democrat who commissioned the report, in a statement said the report could help policymakers advance proposals to implement a single-payer health system. "It is no longer a matter of if we will have a single-payer health care system in our country, but when," he said (Goldstein, Washington Post, 5/1; Winfield Cunningham, "PowerPost," Washington Post, 5/1; Diamond, "Pulse," Politico, 5/2; Luthi, Modern Healthcare, 5/1; Sanger-Katz, "The Upshot," New York Times, 5/1; Edney, Bloomberg, 5/1; Yarmuth statement, 5/1).

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