LA Times Excellent Article on Mercatus/Sanders dust-up

[Nanjeanne]

A Koch-funded think tank tries hard to pretend that it didn't find savings from Bernie Sanders' Medicare plan

The Mercatus Center at George Mason University, a libertarian think tank partially funded by the Koch brothers, appears to be mighty embarrassed about its finding in a recent paper that the Medicare for All proposal from Sen. Bernie Sanders (I-Vt.) might actually reduce Americans’ overall spending on healthcare.

We know this because Mercatus has sent out several emails pushing back against reports about the finding. And the paper’s author, Mercatus fellow Charles Blahous, took to the opinion page of the Wall Street Journal to complain that “some have seized on a scenario in my estimates showing a slight decline in projected total public and private health expenditures under Medicare for All.”

Snip

The problem with Blahous’ complaint, as it happens, is that he actually did find that the Sanders plan could reduce overall healthcare costs. That conclusion is right there on page 18 of his 24-page paper. Under the assumptions in the Sanders plan, he writes, “aggregate health expenditures remain virtually unchanged: national personal healthcare costs decrease by less than 2%, while total health expenditures decrease by only 4%, even after assuming substantial administrative cost savings.”

Snip

What’s overlooked in all these cavils about Sanders’ crowing about Blahous’ finding is that the champion cherry-picker in the discussion is Charles Blahous. The cherry he picks is the cost of Medicare for All to the federal government, and he fills a bushel basket with his harvest. “Paying for every American’s healthcare expenses would increase federal spending by $32.6 trillion over the first decade,” he writes. “Even if Congress were to double what it collects in individual and corporate income taxes, there still wouldn’t be enough money added to the federal coffers to finance the costs of this plan.”

Notice what he did there? He pretended that the only economic effect of the plan would be to drive up government spending, without netting out the savings reaped by businesses and individuals by eliminating premiums, deductibles and co-pays. Nor does he factor in the value to individuals and society of the expanded services advocated by Sanders. Sure, giving everyone dental and vision coverage will cost money. But in return, everyone gets dental and vision care. Isn’t that a positive?
In other words, Blahous counted all the increases in costs and attributed them all to the government, without placing his government spending figures in the context of the reduced spending by individuals and businesses or the gains in health services. That’s some world-class cherry-picking right there.

Snip

So, sure, let’s acknowledge that Sanders built his Medicare for All plan on a foundation of assumptions about costs and savings. But Blahous built his attack on a foundation of assumptions about costs and savings, just a different foundation. To declare his assumptions credible and Sanders’ not is to give up the fight for universal healthcare before the bugle is even blown. That’s what Blahous was hoping for, and no one should let him get away with it.

It’s long. Highly recommend reading the whole article. Full of interesting points. http://www.latimes.com/business/hiltzik/la-fi-hiltzik-blahous-sanders-20180822-story.html

[DBoon]

1. Well, they are libertarians

meaning "government bad", "profits good"

Money going to a government single payer is bad, money going to insurance company administrative and marketing expenses is good.

[CaliforniaPeggy]

2. A big, fat K&R!

[aidbo]

3. Thanks.

[mr_lebowski]

4. Great assessment! One thing I've wondered about Sanders plan ...

Does it involve requiring employer-paid taxes to roughly equal what they're now paying in premiums for their employees? Similar to what we do with Social Security, IOW, where the contributions come from both employer and employee?

I realize this shouldn't affect overall net costs, but just curious if that's how his proposal was going to work? The plan would be A LOT harder sell to the public if employees alone would suddenly be saddled with the entire burden of paying for MFA and employers could just walk away from their end of things.

Another question about how things are now under ACA ... you know how Ins. Co's are only allowed to profit by 15%? Well, are there any disincentives in this scheme that prevent ins. co's from paying the execs exorbitant amounts, giving them private jets, etc ... in order to make sure that only 15% is EVER left over in 'profits'?