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Medicare for All Could Trim Costs, Impede Care, Report Says

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05/01/2019 | 05:26pm EST

By Stephanie Armour

Shifting the U.S. health-care system from private and employer insurance toward a government-run program would likely lower administrative costs but could increase wait times and reduce access to care, the nonpartisan Congressional Budget Office said in a report that raised cautions for Democratic lawmakers who back an idea known as Medicare for All.

The report, released Wednesday, said more federal spending would be needed under legislation creating a government-run, Medicare for All system to largely replace private and employer insurance coverage with a single government program for everyone. The analysis doesn't estimate how much funding would be required, however.

The report serves as a yardstick laying out possible pitfalls and advantages of instituting such a Medicare for All system, as well as the policy questions lawmakers would have to address.

By consolidating administrative tasks, the report says, their costs would likely fall under the new health system. But the design of the system would determine whether it lowers overall health-care spending.

A Medicare for All system would create incentives, such as access to expanded preventive care and other benefits that may improve people's health, the report said. But it also said that extending coverage to more Americans could produce longer wait times and reduced access to care if there weren't enough health workers.

"Shifting such a large amount of expenditures from private to public sources would significantly increase government spending and require substantial additional government resources," the CBO report said.

While a variety of funding proposals have been suggested -- including employer and employee taxes, bank fees or various tax reforms targeting high-earners -- no specific funding mechanisms are attached to the Medicare for All proposals currently under consideration in Congress.

Democrats who back Medicare for All are expected to use the report to rally support for their ambitious proposals. The analysis was requested in January by John Yarmuth (D., Ky.), chairman of the House Budget Committee. He didn't ask for a spending estimate.

"We must do more, which is why I believe it is no longer a matter of if we will have a single-payer health care system in our country, but when, " Mr. Yarmuth said Wednesday, referring to a government-run system. "I hope this report and upcoming hearings help advance that timeline."

Republicans this week have already stepped up attacks on Medicare for All ahead of the report from the CBO, which produces independent analyses of budgetary and economic issues. A previous CBO analysis helped to doom a GOP effort in 2017 to repeal the Affordable Care Act, because it projected that millions of people would lose coverage.

Senate Majority Leader Mitch McConnell on Wednesday described Medicare for All as a "far-left proposal" that would have been unlikely to get a hearing in the past.

"Needless to say, times have changed. Now, across the aisle, this level of radical intrusion is the proud rallying cry -- both here in Congress and on the presidential campaign trail," Mr. McConnell (R., Ky.) said in floor comments.

The 20 or so Democratic presidential candidates have taken different stances on the idea of shifting health coverage to a single, government-run program. Sens. Kamala Harris (D., Calif.) and Elizabeth Warren (D., Mass.) are among the co-sponsors of a Medicare for All bill from Sen. Bernie Sanders of Vermont, an Independent who is running as a Democrat in the race. Former Vice President Joe Biden is backing a more incremental option that would let people buy into Medicare.

A House committee on Tuesday held the first ever Medicare-for-All hearing in an effort to build momentum for the plan ahead of the 2020 presidential campaign.

Because the public plan would provide a specified set of health-care services to everyone eligible, participants wouldn't have a choice of insurer or health benefits, and the plan might not address everyone's needs, according to the report. Lower reimbursement rates to doctors and hospitals that could occur under a single plan might also reduce the amount and quality of care provided, it said.

In addition, lawmakers would have to decide a politically thorny issue: Whether to cover undocumented immigrants. Some 11 million people were in that category in 2018, according to CBO estimates, and they might not have health insurance if they aren't made eligible for a public plan. About half of that population had health insurance in 2018, CBO said.

Medicare for All legislation proposed by Rep. Pramila Jayapal (D., Wash.), which is similar to Mr. Sanders's bill, would create a government plan and provide a robust set of benefits, including coverage for prescription drugs, hospitalization, long-term care and dental treatment. Under the proposal, employers couldn't offer health plans that compete with government-run coverage. People now on Medicare and Medicaid would be shifted into the new system, but Veterans Affairs and Indian Health Services would be preserved.

Republicans have zeroed in on the projected cost of a new system. The conservative Mercatus Center at George Mason University estimated that Mr. Sanders's proposal would add up to almost $32 trillion over 10 years.

Mr. Sanders pushed back, noting that the Mercatus analysis also found that overall U.S. health-care spending would drop compared with current projections by $2 trillion over the same period.

Write to Stephanie Armour at stephanie.armour@wsj.com

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