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Rich Lowry: The battle over socialism is joined

August 4, 2018

It’s begun. We are having a debate over socialism.

Not over whether it’s fair to call Democrats socialists. Not over whether socialism has been good for Venezuela or some other faraway, unfortunate country. But no-kidding socialist policies right here in the United States.

The press attention to a new study of the costs of “Medicare-for-all,” or universal health coverage paid for by the government that goes much further than Obamacare, is a sign that it is a live issue.

Popularized by the socialist Bernie Sanders, Medicare-for-all is not just a fringy left-wing talking point anymore. It’s a fringy plank of a growing element of the Democratic Party. A raft of prospective Democratic presidential candidates have endorsed the policy, while about a third of the Democratic members of the House have joined a caucus devoted to it.

The good news for Sanders and Co. is that, in the wake of the failure of an attempted GOP repeal of Obamacare, the health care debate is clearly moving left. The bad news is that Medicare-for-all is still a completely batty, politically unserious idea.

The new study of its costs, from the conservative Mercatus Center, concludes that Medicare-for-all would increase federal spending by almost $33 trillion during the first 10 years. To put it in nontechnical terms: that’s a lot. The study notes that “it would be less expensive to the federal government to triple all projected appropriations,” and that “doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

Supporters of the idea impeached the credibility of the findings based on their source, yet a study by the centrist Urban Institute in 2016 found exactly the same thing.

The costs aren’t merely a theoretical matter. Vermont, the home of Bernie Sanders, abandoned a single-payer proposal after the Democratic governor concluded that it wasn’t fiscally sustainable. Despite its Democratic supermajorities, California gave up on a single-payer proposal last year for the same reason — the projected cost was twice as much as the state budget.

The upside is that Medicare-for-all purports to save on overall health care spending by ratcheting down payments to health care providers. Medicare does indeed pay less to hospitals than private insurers, but it’s not clear that this would be sustainable if hospitals could only count on Medicare-level payments. Regardless, hospitals are politically powerful and well-positioned to resist threats to their bottom line in Congress.

Since Medicare-for-all would eliminate insurance premiums and provide health care free of charge, it would create an incentive for more usage, and more health care expenditures.

All of this is why the natural gravity in a single-payer system is toward brute-force price controls and rationing to control costs.

This wouldn’t be popular, nor would the radical change that Medicare-for-all would entail. President Barack Obama had to promise that if you like your health care you can keep it because any change to private insurance is so toxic. Medicare-for-all would replace the employer-based system entirely for more than 150 million people. It wouldn’t matter how much they liked their insurance — it would be gone as a matter of definition.

It’s hard to see Medicare-for-all as a plausible health care agenda even if Democrats swept all elected branches of government in Washington in 2020. But the first step toward achieving any policy goal is creating a national debate over it and swinging one of the major political parties behind it. Bernie Sanders has had considerable success in that effort, and the allure of “free” health care — like free anything — can’t be discounted.

Republicans need to continue to develop and push their own ideas to reduce health care costs, and adjust to the new reality where socialism doesn’t simply represent a laugh line, but a battle that needs to be won.

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