Yesterday, the Bernie Sanders campaign put out a fiscal score for Sanders’ plan to replace the entire U.S. health-care system with a government-run single-payer regime. The score was generated by Gerald Friedman, an economist at the University of Massachusetts at Amherst, and it illustrates why Berniecare is an utter fantasy.
It’s far from clear that Sanders’ plan would achieve $6.3 trillion in spending reductions. The plan would make nearly all health-care services free to all U.S. residents, regardless of price or value. As anyone who has been to an open bar knows, when you make the apparent cost of a service “free,” the nearly certain outcome is more consumption, not less. The only way to keep costs down under single-payer is to control access and price, as Canada has attempted to do. It’s far from clear that American doctors, hospitals, nurses, et al. will accept the 15 percent pay cut needed to realize Friedman’s savings.
State and local governments would be relieved of their responsibility to fund health-care programs, but they would not be required to give that money back to their residents in the form of lower taxes. It’s far more likely that they’d spend the money on other priorities. Individuals and employers would, of course, pay far more in taxes to finance Sanders’ plan.
If you’re a glutton for punishment, I have more details on the plan at Forbes, including what would happen if Sanders’ purported savings did not materialize.