How Democratic Health Proposals Will Take Your Coverage Away

Following her performance in last week’s Democratic presidential debates, California Senator Kamala Harris once again tripped up over the issue of health care. For a second time, Harris attempted to claim that she would not eliminate private health coverage. In reality, however, virtually all Democrats running for president would enact policies jeopardizing Americans’ health insurance. The candidates differ largely in their level of honesty about their proposals’ effects.

During the debates on Wednesday and Thursday, only Harris, New York Mayor Bill DeBlasio, Massachusetts Sen. Elizabeth Warren, and Vermont Sen. Bernie Sanders said they supported eliminating private insurance. But in an interview Friday morning, Harris claimed she heard the question as asking whether she would give up her insurance, not whether she would take others’ coverage away.

The facts defy Harris’ lawyerly parsing. Section 107(a) of the bill that Sanders introduced, and which Harris, Warren, and New Jersey’s Cory Booker have co-sponsored, would make it “unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided” under the legislation.

In May, Harris claimed that Sanders’ legislation would permit private health insurance to supplement the government-run program. But as CNN’s Jake Tapper pointed out at the time, Sanders’ bill would provide such comprehensive benefits that supplemental coverage could only cover treatments like cosmetic surgery. It raises an obvious question: Who would want to buy “insurance” covering breast implants and Botox injections? Harris’ Hollywood constituents, perhaps, but few middle-class Americans.

Other candidates have similarly tried to disguise their intentions when it comes to taking away Americans’ health coverage. During last week’s debates, New York Senator Kirsten Gillibrand—another co-sponsor of Sanders’ legislation to make private coverage “unlawful”—did not raise her hand when asked about eliminating health insurance. She said she supported a government-run “public option” instead: “I believe we need to get to…single payer. The quickest way you get there is you create competition with the insurers.”

But individuals with private coverage cannot, and should not, rest easy. The fact that Gillibrand says she supports a government-run health system as an eventual outcome means that she would work to sabotage the private health insurance system, to drive all Americans into a government-run program.

Even Democratic candidates who claim they oppose Sanders’ single-payer legislation have proposed policies that would eventually lead to such a government-run health system. In Thursday’s debate, Sen. Michael Bennet claimed that his proposal for a “public option” “could easily” see 35 million people enroll. Bennet proved off in his estimate by only about 100 million individuals. In 2009, the Lewin Group estimated that a plan similar to Bennet’s could enroll as many as 131.2 million Americans.

A review of Bennet’s legislation demonstrates how it would sabotage private coverage, by giving the government plan major structural advantages. Bennett’s bill grants the government plan $1 billion in start-up funding from taxpayers—with additional bailout funds likely should the plan ever run into financial distress. It would require all doctors participating in Medicare to join the government plan. And it would pay doctors and hospitals the much lower rates that Medicare pays, even though nearly three-quarters of hospitals lost money on their Medicare patients in 2017.

Among the Democrats running for president, Sanders has remained outspoken in his desire to take away Americans’ health coverage, and ban private insurance. While most of the other candidates say that they want to preserve private coverage, their policies would do the exact opposite. Just as Barack Obama eventually had to apologize for his infamous “If you like your plan, you can keep it” broken promise, so too will most of this year’s candidates have to explain why American families couldn’t keep their insurance if and when their policy plans go into effect.

In accepting his party’s nomination for president at the 1984 Democratic National Convention, Minnesota Senator Walter Mondale infamously claimed that “[Ronald] Reagan will raise taxes, and so will I. He won’t tell you; I just did.” Thirty-five years later, virtually all Democrats have embraced a position almost as unpopular as raising taxes: Taking away Americans’ health insurance. Unlike Mondale, most of this year’s candidates won’t tell you the full truth about their policies. I just did.

This post was originally published at Fox News.

Democrats Agree: Free Health Coverage for Undocumented Immigrants

If a picture is worth a thousand words, then three series of pictures, featuring Democrats discussing health benefits for those in this country illegally, speak volumes. First, Hillary Clinton in September 1993:

Finally, Democratic candidates for president last night:

Whereas Indiana Mayor Pete Buttigieg called coverage for illegal immigrants an “insurance program” and “not a hand out,” Clinton said in 1993—well before the most recent waves of migration—that “we do not want to do anything to encourage more illegal immigration into this country. We know now that too many people come in for medical care, as it is. We certainly don’t want them having the same benefits that American citizens are entitled to have.”

Likewise, whereas Joe Biden said “you cannot let people who are sick, no matter where they come from, no matter what their status, go uncovered,” the president whom he worked for promised the American people that “the reforms I’m proposing would not apply to those who are here illegally.” Granted, the promise had a major catch to it—Obamacare verifies citizenship but not identity, allowing people here illegally to obtain benefits using fraudulent documents—but at least he felt the need to make the pledge in the first place. No longer.

Ironically enough, even as all Democrats supported giving coverage to illegally present foreigners, the candidates seemed less united on whether, how, and from whom to take health insurance away from U.S. citizens. Only Sens. Kamala Harris and Bernie Sanders said they supported abolishing private health insurance, as Sanders’ single-payer bill would do (and as Sen. Elizabeth Warren and New York Mayor Bill de Blasio pledged on Wednesday evening). For Harris, it represents a return to her position of January, after fudging the issue in a follow-up interview with CNN last month.

As usual, Sanders made typically hyperbolic—and false—claims about his plan. He said that his bill would make health care a human right, even though it does no such thing. In truth, the legislation guarantees that individuals would have their bills paid for—but only if they can find a doctor or hospital willing to treat them.

While Sanders pledged that under his bill, individuals could go to whatever doctor or hospital they wished, such a promise has two main flaws. First, his bill does not—and arguably, the federal government cannot—force a given doctor to treat a given patient. Second, given the reimbursement reductions likely under single payer, many doctors could decide to leave the profession altogether.

Sanders’ home state provided a reality check during the debate. Candidates critical of single payer noted that Vermont had to abandon its dream of socialized medicine in 2014, when the tax increases needed to fund such a program proved too overwhelming.

Shumlin gave his fellow Democrats a valuable lesson. Based on the radical, and radically unaffordable, proposals discussed in this week’s debates—from single-payer health care, to coverage for undocumented immigrants, to “free” college and student loan forgiveness, and on and on—they seem hellbent on ignoring it.

This post was originally published at The Federalist.

Democrats Debate How Many Americans to Take Coverage Away From

The first segment of Wednesday evening’s Democratic presidential debate featured the ten candidates largely competing amongst themselves to see who could offer the most far-reaching proposals. In response to a question from the moderators, the candidates debated whether to allow individuals to keep the private insurance plans that most Americans have (and like) currently.

Of the candidates on stage, only New York Mayor Bill de Blasio and Massachusetts Sen. Elizabeth Warren said they wanted to do away with private insurance entirely. But as I explained on Wednesday, the other candidates’ plans for a so-called “public option” could result in two-thirds of those with employer-sponsored coverage losing their insurance. In reality, then, the debate centered not around whether to take away Americans’ current health coverage, but how many would lose their insurance—and how honest Democrats would be with the American people in doing so.

For better or for worse, by saying “I’m with [Sen.] Bernie [Sanders]” on eliminating private coverage, Warren admitted that she’s “got a plan” for taking away Americans’ current insurance. Having seen her fellow senator and presidential candidate Kamala Harris flip-flop on her earlier comments about banning private coverage, Warren went all-in on embracing single-payer insurance, perhaps to siphon away Sanders’ socialist base.

Warren used flimsy reasoning to justify her support for single payer, talking repeatedly about insurers’ profits. As she noted, those profits totaled just over $20 billion last year. But during the last fiscal year, Medicare and Medicaid incurred a combined $84.7 billion in improper payments—payments made in the wrong amount, or outright fraud. With improper payments in government programs totaling nearly four times the amount of insurers’ earnings, a move to single payer would likely end up substituting private-sector profits for increased waste, fraud, and abuse in the government plan.

In rebuttal, Maryland Rep. John Delaney pointed out that Sanders’ bill would pay doctors and hospitals at Medicare reimbursement rates. Because government programs pay medical providers less than the cost of care in many cases—72 percent of hospitals lost money on their Medicare patients in 2017—Delaney persuasively argued that extending those payment rates to all patients could cause many hospitals to close.

Indeed, a study in the Journal of the American Medical Association earlier this year concluded that single payer would reduce hospital payments by more than $150 billion annually. To cope with losses that massive, hospitals could lay off up to 1.5 million workers alone. If extended to doctors’ offices and other medical providers, single payer could put millions of Americans out of work—job losses that would obviously affect access to care.

Ironically, the health care debate soon pivoted to talk about “reproductive health.” Commentators noted that the candidates seemed much more eager to talk about abortion issues—on which they almost all agree—than on single payer. But of course, the two remain linked, as Democrats not only want to have taxpayers fund abortions, but to force doctors and hospitals to perform them.

It says something about the current state of the Democratic Party that forcing doctors to perform abortions, and taking away the coverage of “only” 100 million or so Americans, now represent moderate positions within the party. If Democrats want to win over persuadable swing voters next November, they sure have a funny way of showing it.

This post was originally published at The Federalist.

This Chart Explains How Democrats Will Take Away Your Current Coverage

This week, Democratic presidential candidates will gather in Miami for their first debates of the 2020 campaign cycle. Health care, including Sen. Bernie Sanders’ single-payer scheme, will surely serve as a prime point of contention.

More candidates who want to appear more moderate, such as former vice president Joe Biden, might try to contrast themselves with Vermont’s socialist senator. Because Biden and others instead want to allow people to buy into the Medicare program—the so-called “public option”—they will claim that individuals who like their current health coverage need not fear losing it.

In an April 2009 study, Lewin concluded that within one short year, a government-run health plan would eliminate the private coverage of 119.1 million individuals—two-thirds of those with employer-provided insurance:

Democrats’ proposals for a government-run health plan have slightly different details, but they share several characteristics that explain this massive erosion of private health coverage. First, most of the plans receive dollars from the Treasury—seed funding, funding for reserves, or both. These billions of taxpayer dollars, to say nothing of the possibility of additional bailout funds should it into financial distress, would give a government-run plan an inherent advantage over private insurers.

Third, and most importantly, the government-run plan would pay doctors and hospitals at or near Medicare payment levels. These payment levels fall far short of what private health plans pay medical providers, and in most cases fall short of the actual cost of care.

The Lewin Group concluded in 2009 that, by paying doctors and hospitals at Medicare rates, a government-run plan would lead to massive disruption in the employer-provided insurance market. It also concluded that the migration to the government plan would cost hospitals an estimated $36 billion in revenue, and doctors an estimated $33.1 billion. As Lewin noted, under this scenario “health care providers are providing more care for more people with less revenue”—a recipe for a rapid exodus of doctors out of the profession.

Democrats have spent the past two years criticizing President Trump for his supposed “sabotage” of Obamacare. But proposals to create a government-run health plan would sabotage private health insurance, to drive everyone into a single-payer system over time. And some of the plan’s biggest proponents have said as much publicly.

Many moderate and establishment Democrats view the government-run plan as a more appealing method to reach their single-payer goal, because it would take away individuals’ private coverage more gradually. Few believe in the efficiency of competition, or the private sector, as a policy matter; instead, they view the millions of people with private health coverage as a political obstacle, one they can overcome over time.

Senator and presidential candidate Kirsten Gillibrand (D-N.Y.) epitomizes this belief. In March, she called for “a not-for-profit public option [to] compete for the business—I think over a couple years you’re going to transition into single payer.” Of course, by making these comments, Gillibrand indicated a clear bias toward her preferred outcome. So when she said “I don’t think that [private insurers] will compete,” Gillibrand really meant that she—and her Democratic colleagues—will sabotage them so badly that they cannot.

Democrats may claim that they don’t want to take away individuals’ insurance, but the numbers from the Lewin Group survey don’t lie. Regardless of whether they support Sanders’ bill or not, the health coverage of more than 100 million Americans remains at risk in the presidential election.

This post was originally published at The Federalist.

The CBO Report on Single Payer Isn’t the One We Deserve to See

On Wednesday, the Congressional Budget Office (CBO) released a 30-page report analyzing a single-payer health insurance plan. While the publication explained some policy considerations behind such a massive change to America’s health care market, it included precious few specifics about such a change—like what it would cost.

Sen. Bernie Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking member of the Senate Budget Committee. If he asked the budget scorekeepers to analyze his legislation in full to determine what it would cost, and how to go about paying for the spending, CBO would give it high-priority treatment.

But to the best of this observer’s knowledge, that hasn’t happened. Might that be because the senator does not want to know—or, more specifically, does not want the public to know—the dirty secrets behind his proposed health-care takeover?

Hypothetical Scenarios

The CBO report examined single payer as an academic policy exercise, running through various options for establishing and operating such a mechanism. In the span of roughly thirty pages, the report used the word “would” 245 times and “could” 209 times, outlining various hypothetical scenarios.

That said, CBO did highlight several potential implications of a single-payer system for both the demand and supply of care. For instance, “free” health care could lead to major increases in demand that the government system could not meet:

An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care. People who are currently uninsured would receive coverage, and some people who are currently insured could receive additional benefits under the single-payer system, depending on its design. Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates. If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.

The report noted that in the United Kingdom, a system of global budgets—a concept included in the House’s single-payer legislation—has led to massive strains on the health-care system. Because payments to hospitals have not kept up with inflation, hospitals have had to reduce the available supply of care, leading to annual “winter crises” within the National Health Service:

In England, the global budget is allocated to approximately 200 local organizations that are responsible for paying for health care. Since 2010, the global budget in England has grown by about 1 percent annually in real (inflation-adjusted) terms, compared with an average real growth of about 4 percent previously. The relatively slow growth in the global budget since 2010 has created severe financial strains on the health care system. Provider payment rates have been reduced, many providers have incurred financial deficits, and wait times for receiving care have increased.

While cutting payments to hospitals could cause pain in the short term, CBO noted that reducing reimbursement levels could also have consequences in the long term, dissuading people from taking up medicine to permanently reduce the capacity of America’s health-care market:

Changes in provider payment rates under the single-payer system could have longer-term effects on the supply of providers. If the average provider payment rate under a single-payer system was significantly lower than it currently is, fewer people might decide to enter the medical profession in the future. The number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities. That decline could lead to a shortage of providers, longer wait times, and changes in the quality of care, especially if patient demand increased substantially because many previously uninsured people received coverage and if previously insured people received more generous benefits.

That said, because the report did not analyze a specific legislative proposal, its proverbial “On the one hand, on the other hand” approach generates a distinctly muted tone.

Tax Increases Ahead

To give some perspective, the report spent a whopping two pages discussing “How Would a Single Payer System Be Financed?” (Seriously.) This raises the obvious question: If single-payer advocates think their bill would improve the lives of ordinary Americans, because the middle class would save so much money by not having to pay insurance premiums, wouldn’t they want the Congressional Budget Office to fully analyze how much money people would save?

During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar residents of Bethlehem, Pennsylvania for single payer. The ostensible support might have something to do with Sanders’ claim during the town hall that “the overwhelming majority of people are going to end up paying less for health care because they’re not paying premiums, co-payments, and deductibles.”

Where have we heard that kind of rhetoric before? Oh yeah—I remember:

At least one analysis has already discounted the accuracy of Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016 presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s $10 trillion—hole in its financing mechanism.

Filling that hole with tax increases meant that 71 percent of households would pay more under single payer than under the status quo, because taxes would have to go up by an average of 20 percentage points. Worse yet, 85 percent of Medicaid households—that is, people with the lowest incomes—would pay more, because a single-payer system would have to rely on regressive payroll taxes, which hit the poor hardest, to fund socialized medicine.

Put Up or Shut Up, Bernie

If Sanders really wants to prove the accuracy of his statement at the Fox News town hall, he should 1) ask CBO to score his bill, 2) release specific tax increases to pay for the spending in the bill, and 3) ask CBO to analyze the number of households that would pay more, and pay less, under the bill and all its funding mechanisms.

That said, I’m not holding my breath. A full, public, and honest accounting of single payer, and how to pay for it, would expose the game of three-card monty that underpins Sanders’ rhetoric. But conservatives should keep pushing for Sanders to request that score from CBO—better yet, they should request it themselves.

This post was originally published at The Federalist.

Hospital Monopolies Are What’s Wrong with American Health Care

Call it a sign of the times. If Rich Uncle Pennybags (a.k.a. “Mr. Monopoly”) appeared today, he would have little interest in holding properties like the Short Line Railroad. In the 21st century, acquiring railroads, or even utilities, is so Baltic Avenue. The real money—and the real monopolies—lie in health care, specifically in hospitals.

Despite the constant focus on prescription drug prices, pharmaceuticals represent a comparatively small slice of the American health care pie. In 2016, national spending on prescription drugs totaled $328.6 billion. That’s a large sum on its own, but only 9.8 percent of total health care spending. By contrast, spending on hospital care totaled nearly $1.1 trillion, or more than three times spending on prescriptions.

Hospitals’ Monopolistic Tactics

The Journal profiled several under-the-radar tactics that some large hospitals use to deter competition and pad their bottom lines. For instance, some contracts “prevent patients from seeing a hospital’s prices by allowing a hospital operator to block the information from online shopping tools that insurers offer.”

Hospitals use these tactics to oppose transparency, because they fear, correctly, that if patients know what they will pay for a service before they receive it, they may take their business elsewhere. It’s an arrogant and high-handed attitude straight out of Marxism.

Also in hospitals’ toolkits: So-called “must-carry” clauses, which require insurers to keep their hospitals in-network, regardless of the high prices they charge, or poor quality outcomes they achieve. The Journal reported that one of the nation’s largest retailers wanted to kick out the lowest-quality providers, but had no ability to do so.

Officials at Walmart a few years ago asked the insurers that administered its coverage…if the nation’s largest private employer could remove from its health-care networks the 5% of providers with the worst quality performance. The insurers told the giant retailer their contracts with certain health-care providers didn’t allow them to filter out specific doctors or hospitals, even based solely on quality measures.

Surprise! Obamacare Made It Worse

Many of these trends preceded President Obama’s health care law, of course. But it doesn’t take a PhD in mathematics to see how hospital mergers accelerated after 2010, the year of Obamacare’s passage:

Hospitals responded to the law by buying up other hospitals, increasing market share in an attempt to gain more negotiating “clout” against health insurers. That leverage allows them to demand clauses such as those preventing price transparency, or preventing insurers from developing smaller networks that only include efficient or better-quality providers.

Here again, industry consolidation begets higher prices. In many cases, hospitals can charge more for services provided by an “outpatient facility” as opposed to one provided by a “doctor’s office.” In some circumstances, the patient will receive the same service, provided by the same doctor, in the same office, but will end up getting charged a higher price—merely because, by buying the physician practice, the hospital can reclassify the office and procedure as taking place in an “outpatient facility.”

Remember: Hospitals Endorsed Obamacare

In 2010, the American Hospital Association, along with other hospital associations, endorsed Obamacare. At the time the hospital lobbies claimed that the measure would increase the number of Americans with health insurance coverage. For some reason, they neglected to mention how the law would also encourage the consolidation that presents ever-upward pressure on insurance premiums.

But remember too that Obama repeatedly promised his health-care law would lower premiums by $2,500 for the average family. Unfortunately for Americans, however, Obamacare’s crony capitalism—allowing hospitals to grow their operations, and thus their bottom line, in exchange for political endorsements—continues to contribute to higher premiums, putting Obama’s promise further and further away from reality.

This post was originally published at The Federalist.

Florida Democrats’ Campaign to Abolish Seniors’ Medicare

Full disclosure: I have done paid consulting work for Florida’s current governor, Rick Scott, in his campaign against Democratic Sen. Bill Nelson. And I have provided informal advice to Rep. Ron DeSantis, the Republican nominee for governor. However, neither the Scott nor DeSantis campaigns had any involvement with this article, and my views are—as always—my own.

On Tuesday, Democrats in Florida nominated an unusual candidate for governor, and it has nothing to do with his skin color or background. Tallahassee Mayor Andrew Gillum, who would serve as Florida’s first African-American governor if elected, says on his campaign’s website that the health plan U.S. Sen. Bernie Sanders (I-VT) has offered at the national level “will help lower costs and expand coverage to more Floridians.”

SEC. 901. RELATIONSHIP TO EXISTING FEDERAL HEALTH PROGRAMS.

(a) MEDICARE, MEDICAID, AND STATE CHILDREN’S HEALTH INSURANCE PROGRAM (SCHIP).—

(1) IN GENERAL.—Notwithstanding any other provision of law, subject to paragraphs (2) and (3)—

(A) no benefits shall be available under title XVIII of the Social Security Act for any item or service furnished beginning on or after the effective date of benefits under section 106(a)… [emphasis added].

In case you didn’t know, Title XVIII of the Social Security Act refers to Medicare. Section 901(a)(1)(A) of Sanders’ bill, which he brands as “Medicare-for-all,” would prohibit the Medicare program from paying out any benefits once the single-payer system takes effect. Section 701(d) of his bill would liquidate the Medicare trust funds, transferring “any funds remaining in” them to the single-payer plan.

In other words, Democrats just nominated as a statewide candidate in Florida—a state with the highest population of seniors, and where seniors and near-seniors (i.e., all those over age 50) comprise nearly half of the voting electorate—someone who, notwithstanding Sanders’ claims about his single-payer bill, supports legislation that would abolish Medicare for seniors entirely. Good luck with that.

That’s What ‘Radical Experiment’ Means, Folks

The recent hullabaloo over an estimated budget score of the Sanders plan, which would require tens of trillions—yes, I said trillions—of dollars in tax increases, highlighted only one element of its radical nature. However, as I pointed out in a Wall Street Journal op-ed earlier this year, the Sanders experiment would go far beyond raising taxes, by abolishing traditional Medicare, along with just about every other form of insurance.

Everyone else, which is roughly 300 million people, would lose their current coverage. Traditional Medicare, Medicaid, and the State Children’s Health Insurance Program would all evaporate. Even the Federal Employee Health Benefit Program would disappear.

With those changes in coverage, people could well lose access to their current doctors. As a study earlier this summer noted, medical providers like doctors and hospitals would get paid at much lower reimbursement rates, of 40 percent lower than private insurance. (A liberal blogger claimed earlier this week that, because other payers reimburse at lower levels than private insurers, the average pay cut to a doctor or hospital may total “only” 11-13 percent.)

Doctors and hospitals would also have to provide more health care services to more people, since “free” health care without co-payments will induce more demand for care. If you think doctors will voluntarily work longer hours for even less pay, I’ve got some land I want to sell you.

Déjà vu All Over Again?

In 1983, the British Labour Party wrote an election manifesto that one of its own members of Parliament famously dubbed “the longest suicide note in history.” That plan pledged unilateral nuclear disarmament, higher taxes on the rich, to abolish the House of Lords, and renationalization of multiple industries.

Although Sanders’ bill weighs in at 96 pages in total, opponents of the legislation can sum up its contents much more quickly: “It abolishes Medicare for seniors.” That epithet could prove quite a short suicide note for Gillum—and the Left’s socialist dreams around the country.

This post was originally published at The Federalist.

Study Contradicts Claims of California’s Obamacare “Success”

Liberals have cited California as the prototypical Obamacare success story for years now, but a new study puts that assertion very much in doubt. Five years ago, even before Obamacare’s exchanges went live, The New York Times’ Paul Krugman claimed California would prove that “a program designed to help a lot of people can, strange to say, end up helping a lot of people — especially when government officials actually try to make it work.”

Reporters have chimed in with similar stories about Obamacare’s supposed success in California. During the presidential campaign in 2016, the Los Angeles Times reported that “California is emerging as a clear illustration of what the law can achieve.” The article quoted several insurers saying the state “did it right,” and had created stable insurance markets.

Emergency Rooms Are Getting More, Not Less, Use

The study, conducted by the California Health Care Foundation, examined emergency department usage over the ten years from 2006 to 2016. While the report, perhaps quite deliberately, didn’t highlight this conclusion — it mentioned Obamacare once, and only in passing — the data indicate that emergency department usage since Obamacare has not only not decreased, it has accelerated, rising at a faster rate than in prior years.

One chart tells the tale:

The study indicates that ER usage accelerated in the years immediately following Obamacare’s implementation, just as it shows Medicaid patients comprised a larger share of ER visits. From 2006 through 2016, Medicaid patients nearly doubled as a share of ER visitors, while ER visitors with private insurance and no insurance both declined:

Unfortunately, this chart does not reveal data for the years immediately before and after Obamacare implementation in 2014, making it tougher to draw direct conclusions. However, the 20 percentage point increase in ER visits by Medicaid patients (California calls its Medicaid program “Medi-Cal”) more than outweighs the 9 percentage point decline in self-pay and uninsured patients and the 4 percentage point decline in patients with other forms of coverage.

While private patients’ ER usage held relatively flat over the decade, the nearly 4 million increase in ER visits by Medicaid patients swamped the combined 863,000 fewer visits by self-pay and uninsured patients and patients with other coverage.

To put it bluntly, the raw data from the California study suggest the state has less of a problem with an overall increase in ER visits and much more of a problem with an explosion in Medicaid patient ER visits. That inconvenient truth might explain why the California Health Care Foundation didn’t highlight the impact of Medicaid, or Obamacare’s expansion of it, in the report itself.

California Study Echoes Oregon ‘Experiment’

In 2016, a group of economists released an updated analysis from Oregon, which concluded that ER usage increased, not decreased, by 40 percent for participants in the Medicaid expansion. The increased ER usage persisted for at least two years, making it unlikely that it existed solely due to “pent-up demand” — i.e., individuals using their new insurance coverage to have lingering but previously untreated problems examined.

Contrary to the conventional wisdom that giving patients a more normal source of coverage would decrease ER utilization, the Oregon study found that usage of health care services increased across-the-board, including emergency department visits.

The California study did not reveal whether access problems resulted in the 170 percent increase in ER visits by Medicaid patients. The state has notoriously stingy payment rates for Medicaid providers, which could impede patients from accessing primary care, forcing them to use the emergency room instead.

At minimum, however, the study once again demonstrates how Obamacare has failed to deliver on its promise to lower the cost of health care by providing that care in a more timely fashion and at the most efficient location. The increase in ER usage by Medicaid patients also raises questions about whether an insurance card provides access to actual health care.

Five years ago, I wrote about how Krugman’s claims of California’s Obamacare success echoed The Mamas and the Papas: little more than California Dreamin’. Last week’s study reiterates how liberal claims that the state represents an Obamacare “success story” remain nothing more than a pipe dream.

This post was originally published at The Federalist.

How Single-Payer Supporters Defy Common Sense

The move to enact single-payer health care in the United States always suffered from major math problems. This week, it revived another: Common sense.

On Monday, the Mercatus Center published an analysis of single-payer legislation like that promoted by socialist Sen. Bernie Sanders (I-VT). While conservatives highlighted the estimated $32.6 trillion price tag for the legislation, liberals rejoiced.

Riiiiiigggggggghhhhhhhhhttttt. As the old saying goes, if something sounds too good to be true, it usually is. Given that even single-payer supporters have now admitted that the plan will lead to rationing of health care, the public shouldn’t just walk away from Sanders’ plan—they should run.

National Versus Federal Health Spending

Sanders’ claim arises because of two different terms the Mercatus paper uses. While Mercatus emphasized the way the bill would increase federal health spending, Sanders chose to focus on the study’s estimates about national health spending.

Although it sounds large in absolute terms, the Mercatus paper assumes only a slight drop for health spending in relative terms. It estimates a total of $2.05 trillion in lower national health expenditures over a decade from single-payer. But national health expenditures would total $59.7 trillion over the same time span—meaning that, if Mercatus’ assumptions prove correct, single-payer would reduce national health expenditures by roughly 3.4 percent.

Four Favorable Assumptions Skew the Results

However, to arrive at their estimate that single-payer would reduce overall health spending, the Mercatus paper relies on four highly favorable assumptions. Removing any one of these assumptions could mean that instead of lowering health care spending, single-payer legislation would instead raise it.

First, Mercatus adjusted projected health spending upward, to reflect that single-payer health care would cover all Americans. Because the Sanders plan would also abolish deductibles and co-payments for most procedures, study author Chuck Blahous added an additional factor reflecting induced demand by the currently insured, because patients will see the doctor more when they face no co-payments for doing so.

Second, the Mercatus study assumes that a single-payer plan can successfully use Medicare reimbursement rates. However, the non-partisan Medicare actuary has concluded that those rates already will cause half of hospitals to have overall negative total facility margins by 2040, jeopardizing access to care for seniors.

Expanding these lower payment rates to all patients would jeopardize even more hospitals’ financial solvency. But paying doctors and hospitals market-level reimbursement rates for patients would raise the cost of a single-payer system by $5.4 trillion over ten years—more than wiping away any supposed “savings” from the bill.

Finally, the Mercatus paper “assumes substantial administrative cost savings,” relying on “an aggressive estimate” that replacing private insurance with one single-payer system will lower health spending. Mercatus made such an assumption even though spending on administrative costs increased by nearly $26 billion, or more than 12.3 percent, in 2014, Obamacare’s first year of full implementation.

Likewise, government programs, unlike private insurance, have less incentive to fight fraud, as only the latter face financial ruin from it. The $60 billion problem of fraud in Medicare provides more than enough reason to doubt much administrative savings from a single-payer system.

Apply the Common Sense Test

But put all the technical arguments aside for a moment. As I noted above, whether a single-payer health-care system will reduce overall health expenses rests on a relatively simple question: Will doctors and hospitals agree to provide more care to more patients for the same amount of money?

Whether single-payer will lead to less paperwork for doctors remains an open question. Given the amount of time people spend filing their taxes every year, I have my doubts that a fully government-run system would generate major improvements.

But regardless of whether providers get any paperwork relief from single-payer, the additional patients will come to their doors seeking care, and existing patients will demand more services once government provides them for “free.” Yet doctors and hospitals won’t get paid any more for providing those additional services. The Mercatus study estimates that spending reductions due to the application of Medicare’s price controls to the entire population will all but wipe out the increase in spending from new patient demand.

If Sanders wants to take a “victory lap” for a study arguing that millions of health care workers will receive the same amount of money for doing more work, I have four words for him: Good luck with that.

Health Care Rationing Ahead

I’ll give the last word to, of all things, a “socialist perspective.” One blog post yesterday actually claimed the Mercatus study underestimated the potential savings under single-payer: “[The study] assumes utilization of health services will increase by 11 percent, but aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit below the level [it] projects” (emphasis mine).

In other words, spending will fall because so many will demand “free” health care that government will have to ration it. To socialists who yearningly long to exercise such power over their fellow citizens, such rationing sounds like their utopian dream. But therein lies their logic problem, for any American with common sense would disagree.

This post was originally published at The Federalist.

Dr. Nick Riviera Explains Obamacare

Dr. Nick Riviera From ‘The Simpsons’ Explains Obamacare

He graduated from Hollywood Upstairs Medical College, thinks “choc-o-tastic” qualifies as a food group, and has a strange habit of jumping out of windows when called to the coroner’s office. He’s also an animated character, for what it’s worth. So what does Dr. Nick Riviera, Springfield’s resident quack on “The Simpsons,” have to do with Obamacare?

As it happens, plenty. Dr. Nick provides a humorous example of what may happen in future years, as cascading reductions in reimbursements due to Obamacare wreak havoc on our health care system—and could make “doctors” like Dr. Nick the only access option for some patients.

Productivity Adjustments Ahead

Most economists consider health care a superior good. That is, as income rises, people want more of it. Moreover, in many cases patients equate price with quality. People generally want the most, and best, health care money can buy, even if the most expensive care does not always equate to the best care. In Springfield, that high-cost care gets provided by giggling physician Dr. Julius Hibbert.

Obamacare included several major changes to reimbursement systems that attempted to change this drive for more, and more expensive, care, but also included arbitrary payment reductions that will lead to abysmally low payment levels. Most notably, the law included so-called “productivity adjustments” to the Medicare formula for hospitals and other providers, reducing the growth of their payments every year.

The CEO of a major hospital trade association admitted back in 2010 that this trade-off—a one-time increase in insured patients for hospitals in exchange for lower payments from Medicare forever—probably didn’t amount to a great deal for his industry in the longer term. Nonpartisan budget experts agree.

The Congressional Budget Office in September 2016 released an analysis showing the Obamacare productivity adjustments could more than double the number of unprofitable hospitals nationwide by 2025. In the longer term, the independent Medicare actuary believes that the productivity adjustments will become unsustainable. As Medicare payment levels keep dropping relative to private insurance, they will make 70 percent of skilled nursing facilities and 80 percent of home health agencies unprofitable, “raising the prospect of access and quality-of-care issues for Medicare beneficiaries.”

Although set by another formula—one created in 2015 rather than in Obamacare itself—Medicare physician payment rates face the same dilemma, as simulations also project payments to decline substantially over time when compared to other forms of coverage.

‘You’ve Tried the Best—Now Try the Rest!’

Into this payment breach steps none other than Dr. Nick Riviera. In season three of “The Simpsons,” the title family had to rely on Dr. Nick to perform open-heart surgery on Homer. Because Homer’s insurance wouldn’t cover the operation, the family turned to Dr. Nick upon seeing his television ad, in which he pledged to undertake any surgery for the ridiculously low price of $129.95. (“Call 1-600-DOCTORB—The B is for bargain!”)

The following scenes show an inept Dr. Nick attempting to learn bypass surgery on the fly. Only a well-timed intervention from smarty-pants daughter Lisa allows Dr. Nick to complete the surgery successfully, resulting in a happy ending for the Simpson clan.

Coming to a Hospital Near You?

Liberals might argue that this episode makes the case for Obamacare, by preventing the kind of care denials that led Homer to Dr. Nick in the first place. But in reality, Obamacare insurance plans currently provide increasingly narrow provider networks that could impede access to care. Moreover, the law’s productivity adjustments, by making hospitals and other providers unprofitable, will increasingly limit access to care for seniors in Medicare over time.

Democrats claim Obamacare made no changes to Medicare, and that reducing reimbursement levels amounts to no more than cutting “waste” out of the system. “Your guaranteed benefits won’t change,” House Minority Leader Nancy Pelosi argues.

That argument only holds merit to the extent that providers will accept lower and lower reimbursement levels in perpetuity. Medicare could lower payments for all surgeries to $129.95, but I doubt anyone other than our good friend Dr. Nick will perform them at that price.

So the next time Democrats try to argue that Obamacare didn’t harm Medicare, or will have a positive effect on our health-care system, think of Dr. Nick. In less time than you expect, his real-life equivalent could be coming to a doctor’s office or hospital near you.

This post was originally published at The Federalist.