A new study says that Medicare for All will lower employer premiums by 8% and individual premiums about the same.
Source: View this report at https://www.peri.umass.edu/publication/item/download/805_42f6acc20a83c79049e68b270e30ee43
Before you read the following, you must know that the top 20% income group starts at about $76,000, hardly in the wealthy group which means at a minimum, based on this study, their net costs will rise by $2,812, but that doesn’t matter because this plan is intended to redistribute wealth.
“For families, our results show that Medicare for All can promote both lower average costs and greater equity in financing health care. For example, we find that for middle-income families, the net costs of health care will fall sharply under Medicare for All, by between 2.6 and 14.0 percent of income. By contrast, with high-income families, health care costs will rise, but still only to an average of 3.7 percent of income for those in the top 20 percent income grouping and to 4.7 percent of income for the top 5 percent income group.”
Cost Saving Potential under Medicare for All
Medicare for All has the potential to achieve major cost savings in its operations relative to the existing U.S. health care system. We estimate that, through implementation of Medicare for All, overall U.S. health care costs could fall by about 19 percent relative to the existing system.
The most significant sources of cost saving will be in the areas of:
1) administration (9.0 percent savings in total system costs);
2) pharmaceutical pricing (5.9 percent savings in system costs);
and 3) establishing uniform Medicare rates for hospitals, physicians, and clinics (2.8 percent savings in system costs).
An additional, more modest source of cost savings, at least in the initial years under Medicare for All, would be to reduce the high levels of waste and fraud that currently prevail in service provision. As a low-end figure, we assume that achievable cost savings in these areas would be about 1.5 percent of total system costs in the first year of full operations.
We also assume that further gains in waste reduction and fraud control are achievable in later years, at a rate of about 1 percent per year for roughly a decade.
The Political Economic Research Institute is a left leaning organization affiliated with the Center for American Progress, but that shouldn’t matter if facts are the guideline. The problem is that all of this is based on a set of assumptions that can reasonably be challenged.
I am not an economist, I don’t have computer models to assist me and I’m not trying to sell any ideas, but I do want people to consider the reality of the situation and the consequences.
For example, how would M4A reduce waste and fraud when today’s Medicare can’t do that? And, that’s what Obamacare was supposed do too.
This study projects significant administrative savings for physicians via one claim system, but Medicare can’t use its current inadequate system and still reduce waste and fraud and manage utilization.
At the same time under this plan health care provider income is reduced by 20% or more by using Medicare allowable fees. Will this lead to more or less health care utilization?
But here is the main thing Americans need to think about, “overall U.S. health care costs could fall by about 19 percent relative to the existing system.” Maybe it will, maybe it won’t, but in any case that is the aggregate spending for the entire Country and that has little to do with what each American family will spend in taxes, premiums and out-of-pocket costs.