📣 THREAD: Since Bernie's "Who the hell knows how much #M4All would cost" clip on #60Minutes is causing such a stir, here's why his answer, while terrible, is actually accurate. Let's look at the much-discussed "Mercatus Analysis" which received so much attention in July 2018: 1/
Back in July 2018, Charles Blahous of the @Mercatus Center, a *right-wing* think tank which isn't a fan of #M4All, came out with a 10-year projection about how much Bernie's #M4All bill would cost *assuming it was implemented exactly as worded* 2/
mercatus.org/system/files/b…
mercatus.org/system/files/b…
There were a TON of headlines screaming about how Bernie's #M4All proposal "would cost $32 Trillion!", which isn't surprising..but there were *other* headlines, including from Bernie himself, noting that the same analysis projected M4All "would *save* $2 Trillion!". Huh?? 3/
I wrote up an explainer which helps visualize how *both* of these headlines could be accurate: 3/ acasignups.net/20/02/24/dear-…
Here's a graph charting TOTAL healthcare spending NATIONALLY--including EVERYtHING--via the National Health Expenditure (NHE) report by the Centers for Medicare & Medicaid thru 2026, overlaid with the Mercatus analysis which runs through 2031: 4/
cms.gov/Research-Stati…
cms.gov/Research-Stati…
The blue section shows total CURRENT spending. TOTAL spending includes both public AND private spending...which means Medicare, Medicaid, CHIP, the VA, the IHS & ACA subsidies...AS WELL AS *all* premiums, co-pays, deductibles, coinsurance, etc by employers & individuals. 5/
The greyed out section below the dotted line represents current PUBLIC spending by both state/local governments (below the blue line) and the federal government (above the blue line). Everything *above* the dotted line is current *private* spending/projections. 6/
the Mercatus analysis assumes that Bernie is swept into office in January 2021 w/218 M4A supporters in the House & 60 M4A supporters in the Senate; the bill is somehow quickly passed through both and signed into law by President Sanders, and goes into effect on Jan. 1, 2022. 7/
(as an aside, I should note that this timeline wouldn't happen even WITH a huge progressive majority in both the House/Senate for reasons @bjdickmayhew laid out here, but let's ignore that for the moment): 8/
(Also: I believe Mercatus' analysis couldn't figure out how to estimate the 4-year transition period during which chunks of the population would be shifted over; it seems to assume everyone would be move into place by 2022. That would shift some of the costs out 3-4 years) 9/
With those caveats in mind: *ASSUMING* all reimbursement rates to doctors, hospitals, drug companies, medical device makers etc. were locked in at *100% Medicare rates*, they figure total *federal* spending would indeed nearly triple. HOWEVER... 10/
...a big chunk of that would presumably still actually come from the states in the form of them being required to keep contributing the same levels that they do now, while the rest would be cancelling out all existing premiums, deductibles, co-pays, coinsurance, etc etc. 11/
Here's where the "$32T more!" and the "$2T less!" show up: The blue sliver at the top. According to the Mercatus projection, the *combination* of a) administrative savings/reduced paperwork *and* lower reimbursement rates to providers would save ~3.4% or $2.0T over a decade. 12/
That's the GOOD news. Here's the BAD news: Again, this assumes that *doctors, hospitals, drug co's & device makers are paid 100% Medicare rates*...which would be devastating to many rural hospitals, would likely cause the existing shortage of doctors to get worse, etc etc. 13/
OK, so what if you kept reimbursing medical providers at their CURRENT levels? Wouldn't there still be *some* savings from the reduced administrative overhead/etc? Well, Mercatus looked at that as well...and here's what they concluced: 14/
Under *that* scenario, they projected that total national health spending would actually INCREASE by about $3.25 trillion over a decade, or around 5.5% more than it's currently expected to. Why? 15/
Because in *either* scenario, there'd be a dramatic increase in *utilization* of healthcare which would (in their projection) more than cancel out administrative savings. This is why every country w/guaranteed universal healthcare coverage ALSO includes STRICT rate setting. 16/
OK, but this is from a right-wing, anti-M4All outlet...they're biased, right? Of course. And other analyses by different outlets have come to different conclusions. Here's a great rundown by Josh Katz, Kevin Quealy & Margo @sangerkatz of the NY Times: 17/ nytimes.com/interactive/20…
Depending on which estimate/projection they looked at, a Bernie-style "pure" #M4All system would cost up to 25% *less* than what we currently spend *or* as much as 15% *more* than what we currently spend...and the highest-end estimate comes the @urbaninstitute. 18/
The point is that it when you're talking about ANY program which is THIS massive, which would impact all ~327 million of us, it's extremely difficult to predict how much it will cost...and w/numbers this big, being off by even a percentage point can mean trillions of dollars. 19/
It's also important to note: It's not just about how much TOTAL spending would increase or decrease, it's also about how much YOU would see YOUR spending increase or decrease. A 25% total savings nationally doesn't necessarily mean you'd pay (net) 25% less...or vice versa. 20/
THAT'S where the debate re *how to pay for it* comes into play. If YOUR taxes are increased by LESS than the amount that YOU'D be saving on premiums, co-pays, deductibles, etc etc, then YOU'D come out ahead. If they increase MORE than how much you'd save, YOU come out behind. 21/
The farther away you are from your eventual goal, the harder it is to extrapolate costs to reach that goal. Think about those hurricane projection charts (even the one Trump doctored with a Sharpie). Note how the potential path range grows wider each day out from the moment? 22/
Right now, we're at "X 11am". Florida represents the low to high total M4All spending range. Ten years out is "8am Tuesday". If M4All cost projections are off on the high side, the hurricane hits Key West. If they're off on the low side, it hits the Panhandle. 23/
This is why *even as someone who *personally* prefers achieving M4All*, *for now* I'd prefer to get us from "X 11am" to, say, "8pm Friday" and then re-evaluate the path forward a few years down the road. That means #ACA2.0, preferably including a robust Public Option. 24/END
