Tuesday, July 27, 2021

Bernie Sanders’ Plan to Raise Health Care Costs

President Obama sold the Affordable Care Act by claiming it would reduce the average family’s health care costs by $2,500 a year. Instead, premiums have risen unabated, and health care spending has grown as a portion of the economy. But a dozen years later, Democrats aren’t even bothering to make such a practical case as they propose increasing health spending by at least half a trillion dollars over the coming decade.

Consider how far the Democratic Party has moved left. Senate Budget Committee Chairman Bernie Sanders’s $3.5 trillion budget—the largest spending bill in American history—is now considered pragmatic because Mr. Sanders originally proposed $6 trillion in spending. Health care is the centerpiece of the Democratic strategy to expand government. Mr. Sanders pushed Majority Leader Chuck Schumer to embrace expansions of Medicare not even included in Joe Biden’s presidential campaign platform. The only limit on the left’s ambitions is whether purportedly moderate lawmakers can stomach tax increases.

Take the plan to extend ObamaCare subsidies that were expanded temporarily as part of a Covid relief package, increasing their generosity and making wealthy families eligible. These subsidies encourage insurers to increase premiums and insulate more households from the rising cost of coverage, including some families earning more than $400,000, whose taxes Democrats also want to raise.

The bill would also expand Medicaid coverage in states that haven’t accepted ObamaCare’s expansion. That would encourage people to keep their incomes below 138% of the federal poverty level so as not to lose their “free” government benefits. A rough cost estimate: $140 billion.

And the bill would expand Medicare to cover vision, dental and hearing—new benefits in a program already heading toward insolvency. Medicare’s Hospital Insurance Trust Fund faces a cash crunch within five years, yet Democrats haven’t said how they would address this problem.

Democrats also endorsed the White House’s plan for $400 billion in new spending on home- and community-based services for the disabled. The proposal purports to solve a longstanding problem in Medicaid, which requires states to cover nursing-home care but not at-home care. What’s needed are policies that make nursing homes a last resort such as requiring people to try home-based care first. Democrats would simply throw money at the problem, the better to unionize home-health workers.

The sole source of saving would come in the cruelest of ways. Speaker Nancy Pelosi’s system for “negotiating” drug prices would effectively tie reimbursement to prices in countries like Canada and the U.K. But these systems decide what to pay based on measures of what another year of life is “worth.” The Consortium of Citizens with Disabilities in a 2019 letter called these measures “discriminatory” and based “on the idea that disabled lives are less valuable than nondisabled lives.”

The Congressional Budget Office has estimated that increased ObamaCare subsidies and Medicare coverage expansions would cost $212.4 billion and $357.6 billion, respectively, over 10 years. Add in the White House’s $400 billion for home- and community-based services and Democrats have proposed roughly $1.1 trillion in spending on health entitlements over a decade.

Even after subtracting the $492 billion in savings from drug price controls, which may or may not materialize, the plan would still add more than half a trillion dollars to Washington’s health care tab. Perhaps for this reason, the framework cautions that “the duration of each program’s enactment will be determined based on scoring.” In other words, Mr. Sanders wants to use permanent tax hikes to pay for a “temporary” spending binge. As always, the real bill will come due later.

This post was originally published at The Wall Street Journal.