A claim by some Democrats that a ‘Medicare for All' health care plan would save the United States $2 trillion is based on a cherry-picked reading of a study which, in fact, shows such a plan would dramatically increase health care expenditures, a Washington Post fact check determined.
"We know that Medicaid expansion and Medicare-for-all actually save this state and this nation $2 trillion if it were fully implemented," Andrew Gillum, a Florida Democratic gubernatorial candidate, said last week.
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According to the Post fact checker, however, Gillum’s claim rests on a mistaken interpretation of a study recently released by the Mercatus Center at George Mason University. Last month, the Mercatus Center published a study by former George W. Bush economic adviser Charles Blahous on the ten-year impact of Sanders's Medicare for All Act.
Both Gillum and Sanders jumped on a part of the report they claim shows Medicare for All would save $2 trillion over ten years. The Vermont senator tweeted a video thanking the Koch brothers, who have donated to the Mercatus Center, for vindicating his health care plan.
A closer reading of the Mercatus Center study shows Sanders' claim to be misleading at best, according to the Post. The fact checker, explained "it’s clear that Blahous bent over backward to accept Sanders’ assumptions, only to find they did not add up."
In doing his research, Blahous decided to follow the text of the Sanders plan and assume that providers — doctors, hospitals, drug companies and the like — would face an immediate cut of 40 percent in their payments. That in theory would reduce the country’s overall level of health expenditures by $2 trillion from 2022 to 2031. But he makes clear that it’s a pretty unrealistic assumption.
In the fourth sentence of the report’s abstract, Blahous wrote, "It is likely that the actual cost of M4A would be substantially greater than these estimates, which assume significant administrative and drug cost savings under the plan, and also assume that healthcare providers operating under M4A will be reimbursed at rates more than 40 percent lower than those currently paid by private health insurance."
The study’s primary argument is that, even accepting Sanders’ estimates regarding providers, government expenditures would increase by $32.6 trillion over ten years, a figure in line with a 2016 estimate of a $32 trillion increase by the left-leaning Urban Institute.
Blahous also noted that "doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan."
"Democrats cannot seize on one cherry-picked fact without acknowledging the broader implications of Blahous’s research," the fact checker concluded.
The $2 trillion savings claim earned a "Three Pinocchios" rating from the Post, meaning it contained "significant factual error and/or obvious contradictions."
Aside from Sanders, several prominent Democrats and potential 2020 presidential candidates have embraced Medicare for All, including Sens. Kamala Harris (Calif.), Kirsten Gillibrand (N.Y.), Elizabeth Warren (Mass.), and Cory Booker (N.J.).