Budget Office: Caveats To Government-Run Health System

The report from the nonpartisan Congressional Budget Office was a high-level look at the pros and cons of changing the current mix of public and private health care financing to a system paid for entirely by the government. It did not include cost estimates of Sen. Bernie Sanders’ Medicare for All legislation or its House counterpart, but listed dozens of trade-offs lawmakers would confront.

“The transition toward a single-payer system could be complicated, challenging and potentially disruptive,” the report said. “Policymakers would need to consider how quickly people with private insurance would switch their coverage to a new public plan, what would happen to workers in the health insurance industry if private insurance was banned or its role was limited, and how quickly provider payment rates under the single-payer system would be phased in from current levels.”

One unintended consequence could be increased wait times and reduced access to care if there are not enough medical providers to meet an expected increased demand for services as some 29 million currently uninsured people get coverage and as deductibles and copayments are reduced or eliminated for everyone else.

“An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care,” the report said.

Employers now cover more than 160 million people, roughly half the U.S. population. Medicare covers seniors and disabled people. Medicaid covers low-income people and many nursing home residents. Other government programs serve children or military veterans.

Proponents of Medicare for All say the complexity of the U.S. system wastes billions in administrative costs and enables hospitals and drugmakers to charge much higher prices than providers get in other economically advanced countries. Critics acknowledge the U.S. has a serious cost problem, but they point out that patients don’t usually have to wait for treatment and that new drugs are generally available much more rapidly than in other countries.

While a government-run system could improve the overall health profile of the U.S., pressure on providers to curb costs could reduce the quality of care by “by causing providers to supply less care to patients covered by the public plan.”

Private payments from employers and individuals currently cover close to half of the nation’s annual $3.5 trillion health care bill. A government-run system would entail new taxes, including income taxes, payroll taxes, or consumption taxes. Or lawmakers could borrow, adding to the overhang of national debt.

Single-payer health care doesn’t have a path to advance in Congress for now.

It has zero chances in the Republican-led Senate. In the Democratic-controlled House, key committees that would put such legislation together have not scheduled hearings. They’re instead crafting bills to lower prescription drug costs and stabilize and expand coverage under the Affordable Care Act.

The CBO report was prepared for the House Budget Committee, which is expected to hold hearings but does not write health care legislation.

Within the health care industry, groups including hospitals, insurers, drugmakers and doctors have formed a coalition to battle a government-run system. Major employers are likely allies.

Polls show that Americans are open to single-payer, but it’s far from a clamor. Support is concentrated mostly among Democrats, with many of them indicating similarly high levels of approval for less ambitious changes such as allowing people to buy into a public insurance plan modeled on Medicare.

A recent Associated Press-NORC Center for Public Affairs Research poll found that 42% of Americans support a single-payer plan, while 31% were opposed and one-quarter said they were neither in favor nor opposed.

By a comparison, a buy-in option got support from 53%, including more than 4 in 10 Republicans. Overall, 17% opposed a Medicare buy-in while 29% were neutral.