The study points out that “Medicare for All” would require a ton of new federal spending. So if the author, Charles Blahous, had made assumptions that inflated the program’s costs, he could be accused of twisting reality to make it fit his narrative. To cut off this line of criticism, he made assumptions that slanted in the opposite direction. Specifically, he assumed that a Medicare for All program could pay doctors and hospitals at Medicare rates — even though these are “more than 40 percent lower than those currently paid by private health insurance” and for most hospitals don’t even cover the full costs of providing care — as well as “significant administrative and drug cost savings.”
One byproduct of these assumptions is that the nation’s total health-care spending goes down — that’s kind of what happens when you assume that Medicare is much more cost-efficient than private insurance and then transfer boatloads of people from private insurance to Medicare. The study explicitly notes this problem, and also provides separate estimates in which the program pays the average reimbursement rates rather than Medicare rates — and in which total spending goes up, not down, by trillions of dollars over ten years. Total health-care spending also went up trillions of dollars in an earlier Urban Institute estimate.
And yet the claim that “even the Koch-funded Mercatus Center” thinks Medicare for All will save the country money is everywhere — variations of it are coming not just from the far-left fringe, but even from respected economists. This presents an intentionally generous assumption as a concession on the merits:
Blahous: “Even granting your crazy liberal assumptions, this is going to be really expensive for the federal government.”
Liberals: “Even this conservative grants our crazy liberal assumptions!”
As the Manhattan Institute’s Chris Pope mentioned on Twitter yesterday, this nonsense “is a great argument for modeling what one believes to be most likely, rather than using ‘generous assumptions.’” I think that’s a shame, because I find it helpful when someone can still make his argument after ceding lots of ground to the other side. But in today’s environment, perhaps this assumes too much good faith of one’s opponents.