theweekmagazine:

Fact checkers have a Medicare-for-all problem

Medicare-for-all: Would it save American society money? That question has been tying fact checkers in knots over the past several weeks.

They need to get a grip.

by Ryan Cooper, 8/21/18

Medicare-for-all: Would it save American society money? That question has been tying fact checkers in knots over the past several weeks.

One recent working paper put out by the libertarian Mercatus Center unwittingly answered in the affirmative, to the tune of over $2 trillion over a 10-year period.

…figuring out what Sanders’ Medicare-for-all bill might cost overall depends on two estimates and one fact: 

1. how much utilization will increase [how many more people insured and using medical services]
2. how much can be saved on administration [25% of US hospital budgets go to administration, as opposed to 12.4% in Canada for ex.]
3. and what the provider reimbursement rates are [ medicare pays < private insurance, but > medicaid, the US largest insurer]. 

The first two are necessarily uncertain, but the third is simply whatever is stipulated in the Medicare-for-all legislation.

… [Blahous – the working paper author] estimates status quo NHE [national health expenditures] at $59.7 trillion over 10 years, while he estimates NHE under the Sanders plan at $57.6 trillion over the same time frame — for a savings of $2.1 trillion.

Perhaps not satisfied with this result, Blahous then put forward an alternative plan of his own in which provider payments would not be cut as much, with total NHE spending somewhat higher. Importantly, this plan has nothing at all to do with the Sanders bill. It’s just something he made up.

…That brings me to the epic fact checker faceplant. Sanders trumpeted the Mercatus finding, because it was hilarious and a good demonstration of how America could be getting universal Medicare while spending less overall

…CNN’s Jake Tapper put out a video chiding him and Alexandria Ocasio-Cortez for relying on the $2 trillion figure. “A reminder to all you politicians out there, you’re perfectly entitled to your own opinions, but not your own facts,” tut-tutted Tapper. [for example]

This point is wildly misleading, and indeed has nothing to do with facts as such at all. The fact checker brigade is saying that provider payments will be hard to cut, and therefore Sanders might end up passing something different than his Medicare bill. Therefore he is a liar. But Blahous’s study absolutely, positively does say that the Sanders plan as written will save the American people $2 trillion. Sanders didn’t mention the more expensive Mercatus plan because it is not his plan. Vague speculation about future political negotiations has nothing whatsoever to do with the facts of the Sanders proposal, nor the empirical contents of the Mercatus study.

But that’s not even the worst part.

As part of its PR rollout of the paper, Mercatus bought buying ads for Facebook in D.C. promoting a Wall Street Journal op-ed in which Blahous baldly misrepresents his own paper, writing that the Sanders bill would “immediately and dramatically cut provider payment rates by roughly 40 percent.”

As noted above, this is absolutely false, because only about half of people are on private insurance [35% of NHE in 2015] . Medicare payments would stay the same [22%], while Medicaid [18%] and uninsured payments [13%] would go up.