3 Reasons the New 'Medicare for All' Bill Really Matters

Plus, economic growth falls short of Trump’s target

3 Reasons Democrats’ New 'Medicare for All' Bill Matters

The broad new Medicare for All bill unveiled Wednesday by a group of House Democrats led by Rep. Pramila Jayapal (D-WA) likely has no chance of being enacted by Congress this term, but that doesn’t render it irrelevant. Here are three big reasons the new bill matters:

1. It’s more ambitious than other Medicare for All plans: It proposes to provide every American with comprehensive medical, vision, dental and even long-term care under a government-run, single-payer system that would replace most — but not all — private insurance. (Private plans would be allowed to cover services not included in the national system.) No premiums, deductibles or co-pays. “I think this Medicare-for-all bill makes it clear what we mean by health care for all,” Jayapal told reporters. “We mean a complete transformation of our health-care system.”

And she proposes to overhaul the U.S. health-care system in two years, compared to the four-year transition envisioned in Sen. Bernie Sanders’ (I-VT) plan. “Some health policy experts fear that dramatically disrupting the health markets over four years could lead prices to explode in the private market, increasing the urgency of a quicker transition,” The Washington Post’s Jeff Stein explained.

Long-term care isn’t part of the Sanders bill or the current Medicare system, Kaiser Health News notes, and it can be very expensive. “The long-term care piece is unbelievably significant,” Robert Blendon, a health care pollster at the Harvard T.H. Chan School of Public Health, told Kaiser. “It surely will help [progressives] with older voters.”

2. It highlights the huge questions around Medicare for All: Details like what the new plan would cover and what doctors would be paid still need to be clarified, but the biggest questions, of course, are about how much the new system would cost and how it would be paid for.

Supporters of the new bill say it could bring down national costs by reducing administrative and bureaucratic expenses involved with the current insurance and health care systems. The bill calls for the secretary of health and human services to establish an annual “national health budget” detailing how much would be spent, with separate budgets for operating expenses and capital costs. And it calls for the secretary to negotiate drug prices directly with manufacturers.

“We will negotiate prices. We will have cost controls. And we will ensure that we are putting patients over profits,” Jayapal said. She reportedly has said she will issue a list of potential taxes that could finance the proposal, including the possibility of a wealth tax.

“Until you come up with a revenue mechanism, you have unserious legislation that CBO would score as adding $30 trillion in deficits over the decade, and as much as $200 trillion over 30 years,” Brian Riedl of the conservative Manhattan Institute said on Twitter.

3. It highlights a tense split within the Democratic Party: Not all Democrats support such a dramatic overhaul of the health-care system. “Even though Democrats hold 40 more seats in the House and majority control, the new ‘Medicare for all’ bill has 18 fewer sponsors than its legislative predecessor, H.R. 676, did in the previous Congress,” HuffPost noted. “Over two dozen incumbent Democrats who signed on to H.R. 676 have declined to do so this time around. Their backtracking raises the prospect that the closer single-payer comes to reality, the more squeamish it makes some Democrats.”

To wit: Just hours after Jayapal and her more than 100 cosponsors introduced their bill, a caucus of 101 more centrist Democrats known as the New Democrat Coalition called for Congress to stabilize Affordable Care Act markets and bring down premiums and prescription drug prices under the existing law. And some lawmakers prefer more modest policy shifts, such as allowing Americans to buy into Medicare or Medicaid. But the new bill only adds to the certainty that Democrats and Republicans will keep talking about Medicare for All through the 2020 election.

Chart of the Day

The Committee for a Responsible Federal Budget rounded up various estimates for the potential cost of Medicare for All:

Your Total Health Care Costs May Be Higher Than You Think

People aren’t necessarily aware of how much money they and their employers spend on health care overall, but when you add it up the total can be a bit of a shock. At Axios, Drew Altman of the Kaiser Family Foundation looked at a typical family of four with a household income of $50,000 and came up with an eye-popping total health care expenditure: $23,050 a year. Here’s how he came up with the number:

  • $3,950 in out-of-pocket spending on health care
  • $3,900 in health insurance premiums for their employer-sponsored plan
  • $1,400 in taxes for government-run health programs
  • $13,050 spent by their employer on premiums
  • $750 spent by their employer on Medicare taxes.

Altman says that these sorts of numbers could play an important role when it comes to evaluating the true cost of Medicare for All proposals, which would likely rely on taxes rather than premiums and out-of-pocket spending. “We can only get a clear picture of how family finances would be affected by Medicare for All, or any other significant overhaul of the health care system,” Altman said, “by looking at the totality of what they pay now.”

-->

That contract's outta here! Bryce Harper reportedly agreed to a 13-year, $330 million deal with the Philadelphia Phillies — the largest contract in the history of major North American sports. Ya gotta believe, Philly?



Send your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And tell your friends they can sign up here to get their own copy of this newsletter.

-->

Economic Growth Falls Short of Trump’s Target — or Maybe Just Beats It

Economic growth in 2018 was stronger than it has been since 2015, but whether it was it was strong enough for supporters of the $1.5 trillion Republican tax cut remains an open question.

According to an initial estimate released by the Bureau of Economic Analysis on Thursday, the economy grew at a 2.6 percent annualized rate in the fourth quarter, bringing the growth rate for all of 2018 to 2.9 percent — just shy of the Trump administration’s goal of 3 percent or better.

Where the economy stands today: Overall, growth in the fourth quarter was a bit stronger than many economists expected. While the data indicate that the economy slowed in the final quarter of the year from the 3.4 percent growth rate recorded in the third quarter, the initial estimate of 2.6 percent annualized growth is higher than the 2.2 percent predicted by analysts. “Last year was likely the best year of this business cycle. We stimulated the heck out of the economy last year and that stimulus will fade this year,” said Morgan Stanley’s Ellen Zentner.

Where the economy is headed: Like Zentner, most economists expect growth to slow significantly in the coming quarters, due in large part to the fading effects of the tax cuts and the two-year spending deal that goosed federal outlays in 2018 and 2019. “As the stimulus fades and the lagged impact of past monetary tightening continues to feed through, we expect GDP growth to slow to 2.2% this year and only 1.2% in 2020,” said Capital Economics’ Paul Ashworth.

Jason Furman, who served as President Obama's chairman of the Council of Economic Advisers and is now a professor at the Harvard, tweeted: “Given the large amount of fiscal stimulus in 2018 is unlikely to be repeated and the labor market has less room than it did a year ago, is very likely this is a high water mark for the recent period. Growth in 2019 is tracking around 1% and potential growth is around 1.75%.”

The White House sticks to its guns: The 3 percent annual growth figure is an important part of the Trump economic plan and has been cited many times by various members of the administration. "The foundation for the plan is 3 percent growth. In fact, that IS Trumponomics," then-budget director Mick Mulvaney told Congress in 2017.

On Thursday, Kevin Hassett, head of President Trump’s Council of Economic Advisors, cited an alternate measure of growth, based on a four-quarter average rather than the more complex calculation used by the BEA, that shows the economy growing at a 3.1 percent rate in 2018 — meeting the administration’s 3 percent goal, though still well short of the 4 percent (and higher) sometimes promised by Trump. “Our policies are working,” Hassett said. “We said there would be a capital spending boom and we would get 3.1 percent growth. That is what happened." More importantly, Hassett predicts the trend will continue, with growth rising to 3.2 percent in 2019 — a very different forecast than other mainstream economists.

A return to the post-recession trend? Bloomberg’s Justin Fox argued that if you use Hassett’s four-quarter average method to calculate GDP growth, then the economy’s performance in 2018 is less impressive than it first appears and is roughly in line with the trend that began in the wake of the recession nearly a decade ago (see the chart below).

Here’s how Fox summed up his view on the current state of economic growth:

“As far as growth goes, then, the Trump Economy is looking quite a lot like the Obama Economy. Growth this deep into an expansion is in a way more significant, since lower unemployment rates mean that more people get to share in it and have started to boost wages in a big way. So it’s not crazy that consumer confidence has been higher over the past couple of years than it had been since 2000. The economic conditions really have been quite good. But the frequently made claim that the Trump administration has delivered some kind of economic sea change isn’t backed up by the GDP numbers.”

News

Views and Analysis