Transcripts For CSPAN3 Medicare For All Proposals Discussion 20240713

Thank you everybody for coming. Please continue to enjoy your lunch. Im tim carney, im a visiting fellow here at the American Enterprise institute as well as being a the commentary ted tor at the Washington Examiner. Were here to talk about health care. But i want to ask a specific question about health care. And its a question that some people on the Free Enterprise side, the free market conservative or libertiarian side dont always ask. Kui, bono in latin, or who benefits. I think sometimes people on the right or right of center are uncomfortable with that question in policy debates because they say why should it matter who benefits . Because we see Elizabeth Warren will say a tax cut is bad because rich people benefit. But i think its actually a very important thing to talk about. One, it definitely influences our debates. If you remember in the 2008 campaign and the passage of obamacare, barack obama certainly thought it was very important to point out that he was battling, you know, the Health Care Sector, battling the drug makers or battling the insurers. And very importantly and interestingly, he was nol telling the truth when he said that. And it shaped the way obamacare turned out that the hospitals and drug makers were largely behind it, or that they got to craft certain principles and helped us understand why the bill became what it did. Its less surprising to see hospital consolidation when you realized the hospitals were supporting lots of provisions in the bill. Following who benefits from something, tells us very important things. Today we largely talk about medicare for all. And the main way that that gets pitched is this is something benefitting all patients. Common counterargument is that it costs taxpayers. I think there is a lot more going on than that. And thats what we will talk about. But not just med air care for all. Other free market conservative Health Care Reforms and we have people up here experts in that as well as talking about obamacare. And who benefits from all of these. And maybe the answer is simply the patients. And but maybe the answer is a special interest. So and then the corollary of course is who suffers from the policies. We have an excellent panel up here to discuss it. First Paige Winfield cunningham is a Health Care Reporter who writes a news letter from for the washington post, a former colleague of mine from the Washington Examiner. Michael cannon and you guys received i think the full bios ill give the brief summary. Michael cannon is the health care guy at kait cato and jim capretta one of the leading health care guys here at aei. Im starting with medicare for all and just ask paige from what you have seen from reporting, how you see different people playing around this, in various medicare for all proposals, haboob do you think benefits, who thinks they will will benefit, et cetera what do you see. How much time do we have . Because its it could be a complex proposal. And i think it could play out in a lot of different ways for different parties. But i think in general you know, when you look at the consumer its going to be lower and middle income consumers benefit because what we talk about is increasing taxes on businesses on employers, on the wealthy to pay for more comprehensive set of benefits for the lower income. I think particularly people that could benefit from a more comprehensive medicare for all people are the people that have been left behind by obamacare which is the people that are say around 300, 400 federal Poverty Level maybe higher who may be eligible for limited sundy in. Thats like a 60,000 income for a couple. 60 to 75,000dollar household and income for a family of four i think. Those are folks i think that recognized to really still be struggling to afford their Health Insurance. And gnat Affordable Care didnt really help because of course the costs of private Health Coverage keeps going up. The subsidies arent enough to blunt the costs for these consumers. And then of course i guess you could say the losers are the top 10 of income earning americans having to pay for this. Industry, you know, industry has really come out against meld care for all. This is the partnership thats formed where pharma came together with the hospitals and the doctors actually were involved in this and they actually left over the summer. But they have been fighting the medicare for all proposals. I think it could be a mixed bag for doctors and hospitals depending on how in would be hashed out. Because on one hand you had obviously they would get more patients because you reach universal coverage. Theyd have more people seeking services. But at the same time they would be paid less probably closer to medicare rates which are significantly lower than what they get under private plans. Drug makers, this probably would be bad for them because the government would have a much stronger role in determining how much they could be paid. And Health Insurers are also oppose ds to this because under bernies plan basically envisions no role for them going forward. So i think thats why you have seen a lot of industry pushback. But ill leave it arthro. So thanks for having me tim, i agree with you have uch much of what pairj says. But i think that the the losers there is the population of looser is broader. I think it includes a lot of low income people who might think they benefit from a medicare for all program. Certainly if most of the tax increases are being borne by higher income people and there are subsidies to people who arent getting subsidies now then those folks might see little coming out of their pocket and more health care coming their way they might think they benefit. But lets think about the ways in which they come some of the costs they bear or lose. They lose any ability to choose their Health Insurance plan because of according to Bernie Sanders under his plan the government will provide health care to everybody and you have no choice of Health Insurance plans outlie lawing private Health Insurance. You lose your right to choose your health plan. You are also going people in with lower incomes are going to lose because the impact of the taxes is not only felt by people paying the taxes. And i do believe that in order to pay for medicare for all system you would have to tax everybody. You have to raise everyones taxes. No one will be immune to the tax increases. But even if the your taxes go up relatively little, the fact that we would have that Bernie Sanders would have to raise 16 trillion in new taxes over ten years, means that the economy is going to take a terrible hit. Collecting 1 in taxes doesnt cost a dollar. It costs 1. 30. Even at the margin some indicate it costs 2. Thats lost economic productivity. The economic advisers president s council made a report where there are estimates. Estimating that taxes would go up by 18,000 per household. Under medicare for all plan by 2022. 18,000 in additional taxes per household but the economy would experience so much Slower Growth as a result of that additional tax burden that every households income would be 17,000 lower than it was than it would otherwise be without the additional taxes. So so and even the low income households would suffer because of that because of less economic activity, less job creation, less growth. I dont think you can say that its just the lower income people do well under this under a medicare for all proposal. Because taxes dont just hurt the people paying the taxes. Beyond that, the the i think that patients would also suffer because when you enroll everyone in a Medicare Program you dont get the benefits of competition you get right now between and there is not much competition but there is some competition. Between different ways of organizing and financing the delivery of health care. You do get some competition between totally fee for Service Payment and other Payment Systems or ways of paying doctors and hospitals. We do see that you know fee for service as a number of problems encouraging unnecessary unnecessary services, unnecessary admissions and so forth. We see spill over effects when there are other Payment Systems or or insurers play a more aggressive role in magging purchasing 50 of the healthcare in the United States and the government is closer to 100 . There are going to be much more opportunities for lobbyists to make money and influencing how that money is spent and there will be winners under medicare for all. Thanks for having me on the panel. This doesnt make him change his mind, but i basically agree with everything michael just said and i wont repeat those points. Those are all very good points. I think a couple of things to note about medicare for all, whats the point of the program . The point of the program is to bring the allocation of the resources into government control, basically, and so the tax finance system, and so as michael indicated, the big loser here really on the first order analysis is anybody who is a wage earner basically because the incidents of financing will move more heavily toward incomebased taxation of some kind, either a payroll tax or an income tax or some way of taxing the broad middle class and senator sanders admits that and that means theyre going to end up taxing wages to some degree more than theyre taxed now. By definition this will be a heavier burden on earned income which is not necessarily a good thing for the economy, for all of the reasons michael just articulated. I think the other point, though, is who is the winner is maybe the people who will get health care more, you know, maybe they have very low wages, no wages, you know. Theyll end up in a more, free, direct provisiontype system so on the first order analysis, there might be some level of winning for that population as was indicated previously, but i think the big dynamic here really is something that occurs over five, ten and 20 years which is what happens when the government becomes the controller of all the resources and almost uniformly throughout the world when the system is run this way, it leads to price setting by the government which, by definition, leads to supply restrictions and less competition. So, you know, sort of basic economics are if the government sets a price below the marketclearing level people will stop supplying it at least in the same degree they are previously. Thats just a reality and what happens when that occurs . That means that people have to wait longer to get the care that they want. So who loses under that situation . Its basically and this takes a long time to develop. So you can enact medicare for all and it wont be noticed for 15 or 20 years, but eventually it will happen and what happens is people wait longer for care and theres less innovation because you have less incentive to bring forward things that the government is controlling the price for. So who loses under that . Its basically sick people, and so i think here you have to understand why is there pushback against medicare for all . Its mainly because people worry about what it would do to the quality of health care over time, particularly for people that need a lot of intensive care and would benefit from innovation, having the best people go into innovation, all of the things that are best controlled by the government and happen to a lesser degree when it is controlled by the government. So, you know, this is the hard reality of medicare for all which is one other point about this which is very important is a lot of the cost of a nationalized governmentcontrolled system are off the books. So the way to measure whether or not something is costing something is usually done in the financial terms, but how do you measure when people have to wait longer or theres no innovation that would have occurred otherwise. Something didnt get made that wouldnt help the patient if someone had the incentive to invest in it 15 or 20 years ago. Those were off the books costs that occurred in the uk and can can and the National Systems that are not measured and theyre artificially lowering the cost, supposed cost of those systems and they cost more because people will pay more if they can get the services faster, but they cant. So theres a whole dynamic here of lost opportunity for medicare for all that i think is very important to understand. Can i push back, though, just to make a point . This is a point that senator sanders argues when medicare for all and its easy to criticize with the proposal and you also have to look at the system, and people are already paying lots of pocket. The average premium now for an employer is 20 grand a year for a family. Costs have been growing faster than inflation for a very long time, and if you look at the mercata center did an analysis of the medicare for all plan and even they concluded that there would be a reduction in National Health spending and personal Health Spending by 2 to 4 if you went to a medicare for all and part of the point that he often tries to make is youre talking about all these costs, but at the end of the day these services are being paid for by somebody and so what youre really talking about is not just necessary he cost, but costs borne by the government and not necessarily by the consumers. I want to clarify this. For some reason bernie and warren who both make this argument never make it very clearly and you did make it clearly there, but just to reemphasize, if you take taxes paid that go to health care and you compare it to the premiums that i pay and the premiums that the Washington Examiner pays, hes saying why do i care whether its coming out of my wage e coming out of my paycheck or coming out of my taxes . Its a redistribution and so the higherwage people will be paying more and the lowerwage people will be getting more health care than they used to. Whats wrong with that argument . You might notice a difference if your taxes go up, but the exact amount your premiums are down, but your brother might not have a job because the economy is not growing the way it would have if you were paying for premiums instead of taxes. Which brother . Multiple. We all have that brother. More broadly than that, i think its a mistake to say that the mercata study says that under the the mercata center concluded that the centers proposal would save money. If you take all of the Bernie Sanders plan at face value and say theyre plausible, then yes, if its politically infeasible for the sanders plan or that congress would enact a medicare for all plan that would reduce prices by the amount that senator sanders envisions then it is not plausible to say that medicare for all plan would reduce the prices that that Health Care Providers get paid, and therefore would be a wash for most people in going no more than the girls would go down. This this might be something that mitch mentioned. If the government is so low. Everyone always a soups that carry is too low. Its not that theyre government prices, they could be too low, the government has no idea any they dont often selfdirect. Thats where all of this money 500 million per year into health care in washington, d. C. , is being invested in lobbying for usually higher payments to Health Care Providers. This is my question when we say drugmakers will probably lose and hospitals are worried theyll lose, and we just think again how obamacare happened or how we generally see the sausage get made here in washington. I want to tell us applausible story of how medicare for all can pass is that when we get a senator warren and she tries to do this and she fails and she does what george w. Bush does and has a good midterm and she has a bigger democratic majority and just how industry reacted in 2008 right after obama won, the ahip, the insurance lobby came out and said hey. We will cover everybody, all preexisting conditions as long as you cover everybody. They cut a deal. So you can see the hospitals, the drugmaker, the doctors and you can see the providers cutting a deal and say make sure you pay us enough and well go along with that. So then you get a med carry for a all that is is that a fantasy . Boomcare, the same thing that happened to medicare for all, but its hard to describe how much heavier a lift medicare for all would be because theres no way the insurers get onboard for medicare for all. Unless they do a senator Kamala Harris type of approach in which case we would have to buy off the Insurance Companies, right . And you could buy off all of the hospitals and all of that, but youre still talking about removing 175 200, 175 million americans from employersponsored health plans and you would have to put something in there for employers that are worried about all of the workforce disruption that would come if people didnt have to stay with their jobs anymore. I mean, the number of people you would have to buy off and thats what youre talking about here. It could happen if the government drives the people. I think you make a point because thats what the providers are worried about. The per cada center, i think, has seen a 40 reduction, which, youre right. You would have politically the industry screaming . None of us would want 40 reduction for our services. If youll pay hospitals and doctors more then its going to cost more overall. I think i agree that were pretty far away from congress being able to pass anything like this, but you can tell that the industry is really worried because, you know, last summer is when they formed this partnership because they saw it being talked about more among the democrats running for president and theyre really worried that this is kind of where the partys going, and i agree that if congress were going to do Something Like this it would have to involve higher rates to providers. There would have to be some kind of role for Health Insurers and i dont know how you get pharma onboard. A couple of things to say about this. We were talking about winners and losers if medicare for all got enacted and thats the premise of your initial question. One thing to think about is who are the winners and losers from the debate about medicare for all before it gets enacted. Besides the people on the stage. Besides you having the event. I think, far be it from me to offer advice to the Democratic Party, but i think this is basically a loser for the Democratic Party because they just ten years ago spent a lot of Political Capital enacting the Affordable Care act. I maybe have a little amnesia here, but i do remember that President Trump sold it to the country as being a gigantic step toward universal coverage, and if not, the answer to universal coverage and now we turn on these democratic debate saying we never achieved universal coverage and we have to do some kind of nationalized plan and there are probably a few america americans scratching their heads saying didnt we already do this . The answer is we did already do it and why are they spending this enormous Political Capital saying the government has to take over the system when you look at the data and say there are 22 Million People in the United States and thats the first thing they say they want to solve with medicare for all, but twothirds of those folks are will ready covered by provisions in the Affordable Care act. They can get on medicaid or they can get in an employer plan and be heavily subsidized. Theres more. There are a couple of more points here. I wont filibuster. Then there is another group out there in the nonexpansion states, 2 to 3 Million People who are low income and poor states and 2 million to 3 Million People who are low income and poor and cant get on medicaid. Theyre a highly sympathetic group that dont have an entry into the insurance system and they buy insurance on their own at least according to the Affordable Care act structure and then the last group are the people are folks who wrote the aca including the Obama Administration specifically excluded which for people who are in the country without proper documentation and couldnt get in subsidized insurance for that reason. I, you know, it seems to me its going to be very difficult to square this circle and sort of say, yeah, now were going to cover them in a way that the Democratic Party didnt do ten years ago. And secondly, you know, extend even more subsidies to people that are already being offered subsidies to get on the coverage today. Well, so now we have to turn to the rest of the country thats currently insured. The sales pitch to them is a few parts. One, wouldnt you like to be able to switch jobs or, you know, one of the parents stay at home or something without worrying about losing your health care. This is the sort of proenterprise argument to some extent for medicare for all is you can go off, start your own Small Business and youre going to be covered. So theres a lot of people who might have insurance currently through Goldman Sachs but they want to start their own little bank, if everybody was covered they could go off and do it. Two, people have a lot of really difficult dealings with Health Insurance companies that dont pay and maybe they believe that the government will be more fair. You might laugh at that second one, but at least address the general idea that people who currently have insurance might think i would be better off, id be more secure, at least. Like, we all of us have kids, and we worry, if i lose my job, how am i going to pay my Health Care Bills . To take away that fear, it might be very valuable to patients. Well, i yeah. I mean, i think politically, it makes sense that thats what democrats are speaking to because a lot of people are discontent with their Health Insurance and prices are going up and i think democrats have successfully also taken over this issue of preexisting conditions and trying to harness that against republicans because as we all know the Trump Administration is refusing to defend the Affordable Care act in this constitutionality challenge and were expecting a ruling on that any day now. But, yeah, i mean, i think theres still a lot of discontent with Health Insurance and the aca didnt fix a lot of that. And i think obama care has been so politicized that people think about it as a lot bigger than it really is. I mean, it for the most part only touched on part of the individual market. About 20 Million People got coverage under it. But to jims point, we already have the mechanisms to ensure a lot of these people. The numbers ive seen show about half of the people who are uninsured are eligible to enroll in medicaid or get into the marketplaces and they dont for whatever reason. So then youre talking about a pretty small subset of people left and this is also the argument has been making which is why are we talking about this huge overhaul when we really should just be focusing on this, you know, 10 million to 20 Million People that we do need to provide coverage for. I think the main way that the medicare for all proposal would reduce the problem of job lock is just by tossing people out of their jobs so theyre not locked in there anymore and eliminating jobs that would otherwise be created. You dont have to have the government take over the entire Health Care Sector in order to solve the problem of job lock. All you need to do is stop all of the other things the government was doing to create the problem of job lock. The reason job lock is a problem is because somewhere along the line congress and the irs made a series of decisions that says if you get insurance through your employer, its not taxed but if you take that cash, that 20,000 paige is talking about as cash wages, then it is taxed so that creates effectively a huge penalty on anyone who wants to control it with that enormous chunk of their own income themselves and buy their own Health Insurance, portable Health Insurance that stays with them from job to job. So 90 of the people with private insurance in the United States have an awful form of Health Insurance that disappears when your job disappears. And and so, it is strange this dynamic where the government gets involved in the Health Care Sector, makes this huge problem and the solution to that problem is always what . More government. Obama care is another example. You mentioned theres a lot of dissatisfaction within Health Insurance companies. I share that dissatisfaction. Part of the reason is because most Health Insurance companies in the United States work for someone other than the consumer because the money is not coming from the consumer. Its coming from an employer. They have to make sure the employer is happy more than the consumer is happy and they dont have a longterm relationship with the enrollee because they know that that enrollee is only going to be with them as long as theyre working for the one firm. But also, look at the aca. The aca was supposed to have filled a lot of our gaps in our Health Insurance market that were created from the same tax exclusion from the employersponsored insurance and its shown dissatisfaction with Insurance Companies. Theres been research that shows that obamacares preexisting conditions and the supposedly most popular part of obamacare themselves are directly making Health Insurance worse for people with very expensive medical conditions. Like multiple sclerosis. Documented in the economic literature. Those provisions are make bing things worse. By the way, if you asked people whether they support the acas preexisting conditions provisions, theyll ending discrimination against people with preexisting conditions, they say, yes, 60 , 70 , 80 . You ask them, what if the coverage gets worse for you or your family . These are not actually popular provisions. What theyre doing is making people more dissatisfied with private Insurance Companies which youre right, does prepare the ground for a government takeover of the entire thing. Heres but you have to ask the question, if all these wellintentioned government interventions are actually making us less and less satisfied with health care, is that going to happen with single payer as well . Heres the thing. Youre not going to have republicans didnt have the guts to try to actually do what many would say is real reform of the Health Insurance system which is to decouple Health Insurance from your job. And this has been the system now that weve had for decades and decades and theres not going to be the political will to do it. Look back in 2017 when republicans came out with the repeal, replace, big sweeping reform bills. They didnt suggest doing away with that. So i think thats one of the reasons theyve actually fallen down over and over again in trying to come up with a viable replacement because they Vice President been willing to sort of take that if you want a free market wait a spend waecond. Wait a second. Theres history that needs to be explained here. My point is if you want a true free market you will not achieve that when the consumer isnt truly shopping for plans because its all provided by their employer. Senator mccain in 2008 ran against president obama and ran on a platform of providing every household in the country with a 5,000 tax credit forward Health Insurance that they would lose if they didnt buy Health Insurance. And its basically a universal Coverage Plan with households. Everybody in the country would have had insurance. It got rid of the exclusion. Had all kinds of provisions. President obama, thensenator obama, ran hard against that and famously purchased 120 million worth of ads in october 2008 just before the election, attacking senator mccain for taxing Health Benefits for the first time in history and then a year later he proposed taxing benefits for the first time in history. The level of cynicism you can have about these debates can be quite high. Mine is pretty high. My point is the notion that republicans have never or some, you know, theres never been offered a proposal to move in a more marketdriven direction and its completely wrong and they lost the nerve after that moment. He lost the election for a lot of reasons. Stick up for paige here, they were serious that was before my time. I was too young it was something, he had to have a health care proposal. Tax credit for Health Insurance is functionally identical to an individual mandate. You can talk about cynicism on the part of democrats but have to talk about cynicism on the part of republicans. That was john mccains plan. It was sure. I want to be harsher on republicans and a little kinder than paige was. There will be a rebuttal for you in a moment. Republicans have never invested in health care. Its just not their thing. The joke i like to tell goes like this. What do republicans and christian scientists have in common . They dont do health care. It really shows. So paige is right that theyve never invested the sort of money and time and Human Capital in trying to advance a free market set of Health Care Reforms, however, that doesnt mean theyve made any progress or that they havent made progress on the problem of job lock which weve been talking about. Im not a fan of this administration in general, but one thing they did that has made a difference in Health Policy is they change the federal governments interpretation of an exemption from federal Health Insurance regulations including the aca for something called shortterm limited duration insurance. They changed that interpretation in a way that basically creates a parallel free market and Health Insurance that can cokpest aexist alongside the aca, despite the name, provide secure longterm Health Insurance to people that is portable. Stays with them between, when they move from job to job. So that happened because of a few people in the administration who are committed to health care. They the Republican Party was able to that level of Critical Mass in order to change to change an existing statute. Theyve not been able to pull that off. Rebuttal . First of all, im not one to defend the Republican Party. Thats not my portfolio. Im not interested in doing that. I think the idea that the reason why more marketdriven health care hasnt happened and isnt part of our system, although there are elements of it in the United States, its not really we wouldnt describe it that way now. Why hasnt that happened . I think the biggest opposition to it is the Democratic Party. The Democratic Party for many years has been incrementally pushing many policies to try to have and this is, you know, honest, this is just their point of view. They would rather have the government control the resources than having a consumerdriven, marketdriven system. And theyve been able to sell that point of view probably more successfully to some drew wiegrh the public than the opposition has been trying to sell the other point of view. So weve gradually moved toward more and more regulation of the system. More and more subsidization of the system, and i think were at a point where its quite true that if we dont want to keep going down that road, theres going to have to be much more aggressive promotion of a real marketdriven system. But isnt the other part of the problem the industry lobbyists . Well, but the fact that the democrats on the left care a lot about health care cant explain why republicans dont care about it. Okay . Look at the the Health Policy landscape across washington, d. C. , and across the country, how many foundations are there on the left that are sitting on huge piles of money, theyre dedicated to nothing but influencing Health Policy. Think of a few off the top of your head. Name up on the right. Name one thats dedicated to free markets. Think of all the Health Policy wonks the cato institute. Think of the we dont have an endowment. Think of all the Health Policy wonks you know throughout washington, d. C. How many of them are on the left and humow many of them are on t right, on the free market side . Theres a huge wonk gap. I think that it shows up in the sorts of proposals that we see from republicans and youre right, it can explain, that asymmetry can explain why theres been a leftward drift in Health Policy. I dont think we can let republicans off the hook for that portfolio for the republicans. I think that, again, to return to i mean, the swamp factor that industry lobbyists benefit and that the congressional staffers who write the bills, et cetera, then become the industry lobbyists, they benefit the more we have a network of subsidies and regulations, and they become less relevant the more we have guys go at it and compete on your own. And bringing the two threads together, they also coopt. The free market side. Look at the administrations proposal to reduce the prices that medicare pays for physicianadministered drug. These socalled part b, ipi,er be National Pricing index propos proposal. This would reduce Government Spending by 8 billion a year according to the assistant secretary of planning and evaluation at hhs. You have conservative groups taking out fullpage ads and paiges pubpublication, the wa street journal, saying it is importing foreign price controls. And pitching the new opeds on the idea. It is nonsense, because medicare uses the governmentset prices in order to come up with how much they pay the makers of the drugs, but whats happening is pharma is going to conservative groups and saying, you know what, this is price controls. They dont spend much the conservative groups dont spend much time thinking about these things. They say, we hate price comes, su sure, well do these ads. All of a sudden big pharma has conservative groups supposed to be dedicated to limited government and so forth advocating for higher Government Spending in the name of reducing the size of government. I think republicans are up against, like, two main things here and one is that, you know, the party is just its when youre going to be the party of less Government Spending, when youre talking about an issue that just is expensive, its going to be a lot harder for you. And Just Health Care costs have just skyrocketed in the last few decades with new cures and new medicines and new procedures and thats great in a way, but coming up with a way to pay for that, and its really hard to find an example of another developed country where you would have what many consider the free market system. Its a really hard thing to figure out. You know, Health Insurance, health care is just a unique kind of good. I like to say its the only good that you can purchase when youre unconscious. And so, you know, if youre going to value human life and were a country that says we value human life, and so we require Emergency Rooms to give you care if you walk in their doors and you may or may not be able to pay for it, but that means that we have a lot of Health Care Spending and a lot of Health Care Costs and how are you going to cover that . I think thats why democrats are much more readily turned to government solutions, republi n republicans dont want to, but then that leaves them with a big question of how do we pay for all of this. Slight correction. I once fell asleep on my couch and pocket bought taylor swift on my iphone. That you can buy i swear it wasnt intentional. I swear. Again, an example why i think its important to discuss who benefits. Ji jim, youve talked about surprise billing regulations. One of the counterarguments is if you pass these rules prices might not come down. Then when we see that the hospitals are lobbying against these regulations, that seems to bel belie argument. What do you see as a virtue of some of the rules that youre talking about on ending surprise billing . Well, i think on that one the first thing to understand is its a real failure of the insurance industry. Theres nothing that says that they couldnt be doing whatever they need to do to corral the outlier providers who are doing these surprise bills, mainly anesthesiologists and pathologists and radiologists. I think the think of it this way, go in if an elective surgery, you pick your surgeon, you have a hospital, go into a hospital thats innetwork, and then they send you a bill saying, oh, by the way, the anesthesiologist is out of network. Why did the insurer let that happen . They could have contracted with the surgeon and said you cant use an out of network anesthesiologi anesthesiologist, the hospital cant use an out of network anesthesiologi anesthesiologist. They allow it to happen. They dont want to deal with the fact that the anesthesiologist has a lot of leverage over them. Push back on the insurers and hospitals and say you cant do this. We shouldnt have to regulate this. It shouldnt be congress problem. Because of your failure, it is. You have to, when you Say Something is in network, maybe sure the whole episode is in network. That would get rid of 90 of the problem right there. Theyre saying we cant these anesthesiologists are going to beat us up and make us pay them a lot of money. Thats your problem. Figure out how to get a lower rate. Thats why we have you. If you cant do that, why do we have you . I would push back hard on the insurers to say you got to solve this problem. Now, having said all that, i mean, i think senator alexanders bill is about as good as youre going to get out aft of a congress, right, you know . Dont ask for perfection. They say, okay, got to get corralled, youre going to be inside this innetwork system now and were going to back it up by saying you cant charge more than the median rate in a market. I would prefer if they hadnt done that and if they just made this spotted out between the insurers and the doctors. But, you know, thats the way the political process is. I can live with that if thats the solution. I think this idea you need to take all these things and send it into an arbitration system and have an elaborate way of deciding what the fee is for a 2,000 anesthesiology its crazy. Why are we doing this at the National Level . Its like a huge sledgehammer for a little gnat that should be killed and gotten rid of. So i think, this is an indication, when you get medicare for all this is a perfect example it will be a mess. In the latest edition of the cato institutions magazine, we have dueling arguments and one, bennett beneato and adjunct from kato advocating for the forced integration model that jim is talking about and the other article is arguing for arbitration on the new york model. But when surprise billing comes up as an issue, i always wonder why arent Insurance Companies marketing themselves to consumers on the basis of if you sign up with us, you will never see a surprise bill, and the answer is well, many folds. The fact that the consumers are not purchasing their own Health Insurance because they cant control their own money, because if they do, the government penalizes them, and then the obstacles the government puts in the way of the sort of integration that jim and david are talking about abe sort of want to force through some targeted regulation. There has been 100 years of government interventions that have prevented the plans like Kaiser Permanente have forming and spreading, that a Payment System like that can offer and including but not limited to the reducing the problems of the Surprise Medical Bills to zero or almost close, or very close to zero. And so i dont have any confidence in either the approach that says that congress is going to solve this problem by setting a price, and whether it is set through an arbitration process and the median price in the market or congress deciding that we are going to write other terms of exchange between consumers and providers by forcing them to integrate. I think that this is a problem that the market developed a solution to more than 70 years ago and if we let that process unfold in more areas of the country and reduce the barriers to the plans we would not having conversations is of the surprise bills in the first place. I would add this is like the prime example of how you take a problem that everybody acknowledges and everyone even says, like, the patient should be held harmless. Patients should not have to pay Surprise Medical Bills. And yet, it is still devolving into an industry fight. You have the Patient Advocates in the hospitals on one side who want to do this benchmarking then you have the doctors on the other side and its just turning i actually didnt realize it was going to turn into this much of a fight and it really has shaped up this way this fall. Again, good for the lobbyists, they seem to be the consistent winners here. You mentioned doctors. I want to ask a couple more questions then we have mics for yeah, couple more questions then well take questions from you. Isnt it possible that some of the losers to medicare for all, for instance, would be industries that are currently collecting rents, that are ku t currently profiting above and ya beyond what kind of they ought to be, whether talking about social justice or Free Enterprise. Isnt it very possible that its doctors . That doctors right now are overpaid and if you wanted if you were putting in place a medicare for all, there could be a medicare for all that largely trims their massive profits and maybe a few fewer mansions in chevy chase would sell to doctors in d. C. , but they would still keep being doctors and prices would go down because there was a single payer negotiating to a lower price. So the Medicare Payment Advisory Commission is a commission that advises congress on how and the administration on how and how much medicare should pay for things. Theres this wonderful quote in a report they issued last year, they said we have known for some time, weve been aware for some time that there is a problem, a discrepancy between how much primary care physicians and specialists are paid. How much medicare pays them. That is that primary care physicians are paid too low relative to specialists. Specialists are paid too much relative to primary care physicians. My favorite part of that quote is we have known for some time. Theyve known about this. Theyve known that this problem is there. Some people are getting overpaid. The primary care physicians may be getting overpaid. They probably are, if not in terms of p, in terms of q, quantity. This problem has existed for decades. And and no one does anything about it. Congress has not done anything about it. Why . Probably because of the lobbying power of the specialty provider groups. Theres another quote in the same medpac report where they say, were becoming aware that maybe fee for service was never a good way to pay for primary care in the first place. Government doesnt learn very quickly, okay . Government makes mistakes. Keeps those mistakes. Place, whether theyre pricing errors, whether theyre errors in how they structure the payments to primary care providers. So there are overpayments in the Medicare Program. I think if you move to a medicare for all system, its a mistake to think that those payments are going to stay, first of all, as low as they are. Youre going to meet the Bernie Sanders targets. Or that system is going to correct those pricing errors over time. Were just going to end up with the same sort of pricing errors throughout the Health Sector that we have in the Medicare Program right now. You know, the premise of the question is, you know, maybe some new negotiator could come in and figure out what the right price is to pay physicians. But, i miean, what would they ue as a way of figuring that out, right . It would end up an arbitrary basis. In 1989 the congress created an arbitrary basis for paying physicians under medicare. It dwot develop got developed a couple times since then. Basically, that struck thur has been in place for all these decades since. When they created it in 1989, they thought they were going to rejigger the formula and reward pry miimary care. So if you go back to look at the studies and the analysis, and that this money is going to be moved out of the specialists and into primary care and the exact opposite happened. So this soot is one of these things the government thought they solved it and they didnt and actually made it worse. So if the government got involved and said were going to set the prices for everybody, i have no doubt they could find a price that would be, and i know they do get things wrong on the upside here, but in this case, they will settle the low price, theyre going to say, we can only afford x because of reconciliati reconciliation, Congressional Budget Office scoring, whatever else is constraining the system. Theyre going to set a price and it would lower it quite substantially, but nobody has any idea whether its the right price. Im not convinced of that. Not just sometimes they get the price too high. Look at part b drugs. The price is too high there. Every time you hear about Cellular Service differentials, hospitals buying up physician practices, its because they know that they get paid more if they provide those Services Inside a hospital than outside a hospital. Were paying too much there. Every time you hear about a physician opening a specialty hospital, they know that medicare is paying too much for certain patients, and if they start a hospital that caters to those patients, they are going to make a lot of money. I pulled the numbers on medicare payments for Knee Replacements. Average payments by state, i have the drg number somewhere. I can get that for you. But the amount that the Surgery Center of oklahoma charges for a Knee Replacement inclusive of the surgeon and anesthesiologist fee is lower than the price medicare pays in lots of states for that same procedure without counting the medicare payments for the surgeons and anesthesiologists. Medicare pays too much in lots of instances but you never hear it. This san example of the effectiveness of the industrys lobbyists. When have you ever heard an industry lobbyist say, no, medicare is paying us too much, please, stop, lower our payments. They dont say that. Sure, billy towntesend said it 20092010, thad thsaid they wer to make an a contribution to the passage of the universal health care act, and he was the head of pharma, that farm was ma actually making out like bandits. Even when they do say it, its not true. The government overpays a lot more than people for health care than people realize. I think that is a key question that is not debated enough, and that is part of the reason i have this. Well see possibly how it plays out as this bill advances. But, again, i want questions. We have microphones in the back. So if you raise your hand, a microphone will be brought to you and identify yourself and ask your question in a questionlike format would be appreciated. But the one more question that i am going to ask because you mentioned bobby tozan and obamacare. The lobbyists, i write about this all the time, lobbyists, like government people, dont have Perfect Vision of the future. What was it mistake for drugmakers and or hospitals to support the passage of obamacare. Financially, morally, what are we talking about . Well, financially. Do the shareholders lose out from that bill passing . Well, i dont think so. You have got how many more insured people as a result of the aca, 14 million, Something Like that. People who dont care about the cost of their drugs. Look at, you know, the price of hormones and oral contra september i ceptives shot up right after the passage not the passage, full enactment of the acas coverage expansion and contraceptives mandate, requires everyone to buy 100 coverage for those drugs. Even nuns. Efven nuns. The prices for those drugs skyrocketed. I think Drug Companies know when they have a fully insured Patient Consumer base, they can get away with higher prices because if an Insurance Company tries to remove that drug from the formulary, the patients dont see savings, its downside to them so they scream bloody murder about that. The Insurance Companies are constra constrained. The drug manufacturers know. I think in a very cynical, socially irresponsible financial level, yeah, that was a good move for the pharmaceuticals. I like libertarians making moral arguments against maximizing profits. That is my favorite kind of that is not were talking about plunder here, not profits. Just for the hospital, i dont think it was a mistake for them to support it. From their perspective, a lot of rural hospitals have been struggling in underinsured areas and some of the areas are aware the insurance rate went up right after the aca so they had more patients able to pay for their care. Questions from the audience, yes. We got one up front. Theres a microphone coming from directly behind you there. Hi. Im bella. Could you speak a little bit to Health Care Plans in other developed nations, and to the universal Health Care Plans in other developed nations and how they compare to our Current System and a possible medicare for all system . Well, most other advanced economies have some kind of system that involves a lot more, well, not a lot more, but put it this way, the government gets involved to a degree where they control the resource allocation in the system. Thats either through a legislative process or regulatory process or some combination of that. Theres a lot of variety in these advanced economies in terms of the health systems. Some rely on private notionally not for profit private Insurance Companies to deliver care like switzerland and germany do. And then some have, you know, direct government provisions all the way across the board such as the uk. They own the hospitals and they pay the physicians directly through the government. So theres a lot of differentiations across this country. And i think that the big point to understand here is something that i tried to say at the outset, what drives the marketdriven system, resource allocation is outside the control of the government. In the hands of people, consumers making decisions and the people they interact with making decisions about what theyre supplying them. And in more nationalized systems particularly in western europe, canada and the uk and australia, they the government really is the final decisionmaker on those questions. They set some level of total spending. They say heres how much were going to spend on, you know, physician salaries or services that physicians provide. We set some prices on drugs. They get very much more involved in the resource allocation decisions. I think thats in the end, thats really the crux of the matter because in those countries, the development of new products, the development of new innovative ways of taking care of patients is diminished to some degree because of that, and moreover, theres a resource allocation misallocation going on that is probably making it harder for particularly very sick patients to get the care they could have gotten otherwise. Lets walk through sort of the type of patients who benefit in a more socialized system whether its england or canadatype system. And the type who lose. It could be somebody who needs a drug that wouldnt otherwise be invented. Would be the clearest example of somebody who would lose in a more socialized system possibly. But on the other hand, theres the poor person who just needs basic health care but is just a little bit, who currently benefits from medicaid or a little bit richer and doesnt. So if you were to walk through different classes of the patients, maybe its older versus younger or chronic illness versus acute. The winners and the losers of the other systems versus a free market system . To be honest, i havent studied other systems, but my understanding has been that i guess the losers in more socialized systems could be, you know, people who are trying to get in to see a doctor, hospital, there tend to be more problems of physician shortages there. Presumably because of lower compensation. I was going to say earlier, theres been a lot of talk in the Trump Administration about the fact that a lot of the funding for new drugs happens in the u. S. Because we dont put the same price controls on drugs. And so the administration is actually working on a proposal right now which would peg certain medicare paints for drugs that are administered directly by doctors to an index of lower prices in other countries and the idea has been the president has talked about this a couple times, that theyre basically freeriding off of us to where theyre relying on us to allow high prices in this country which fund the r d for the pharmaceutical makers then other companies are benefiting from the development of those drugs while still keeping those price comes so people arent paying as much. Thats a proposal. Obviously its gotten a lot of pushback from pharma but the latest ive heard is theyre still working on putting out a proposed rule on this. I think theres a fundamental misunderstanding that guides most of the decisions about International Comparisons and that is that the idea the United States has a market system, all these other countries have governmentdominated systems. And thats why the United States leads in terms of medical innovations and other countries arent pulling their own weight in that regard. I think that thats a mistake and i think theres another way of looking at this that can explain the phenomenon that we see. The United States doesnt have a premarket in the wealth care by any stretch. In fact, i like to say that the greatest trick that advocates of the social medicine has played is to convince the United States that we dont already have it. Here we have every form of socialized medicine. The british National Health service, look at the British Health administration. The german system involves employers a lot. The swiss system looks like obamacare. I mean, weve got it all. Right here. Invariable melting pot of socialism. A melting pot of socialized medicine approaches. If you look at who spends who controls the money in the u. S. Health care sector, about 50 of Health Care Spending is done directly by the government. I dont know whats free market about that, when the government takes away, what, 1. 5 trillion, 2 trillion, from taxpayers and spends that, itself, on health care . People dont realize this, you hear people say, you know, get the government out of my medicare. Oh, exactly, right, right. Socialized medicine socializes the cost of ignorance as well. It goes beyond that. If you look at a broader measure of government involvement which i like to call Health Care Spending subject to coercion, we can throw in the 30 or whatever of Health Care Spending that is done by employers or pursuant to employersponsored insurance. Remember, the government says either let someone else, your employer, control 20,000, 15,000, 20,000, of your income and pick your health plan, or well tax you more. So all of a sudden now the government is directing even more of the market. 80 or more. And and so, so we dont have a market system here. I think the u. S. Health sector is heavily influenced by government as the Health Sectors of any other country, any other advanced nation, but the difference is, and this explains the differences in innovation is, our governments make different decisions with the power that it has. Less power than other countries have over health care, but it makes dig s different decisions. In the uk, the British Government sets a limit on how much its going to spend on the National Health service then it allocates those resources as best it can and, you know, theres waits and all that. But they set a limit. The u. S. Medicare program, the u. S. Medicaid program, they dont set any limit on spending in these programs. Its whatever the doctors and the hospitals order up and the Drug Companies. In fact, the government does tend to push prices up which, so if you have no government limits on quantity, you got government driving prices skyward with such things as the payment formula for Medicare Part b drugs, or the tax preference from employersponsored insurance, encourages people to buy more insurance which encourages more medicare care, shift the demand curve, price rises. This is whats generating all of the revenue the Drug Companies are able to make, sink into our and the rewards to r d, why i think its an important part of the story for why we have so much more innovation. I dont think i think its a really serious mistake, analytical error, to say that we have more innovation because we have a free market. All right. Other questions . Yes. Weve got one. Microphone right behind you. Hi. Im james. So earlier this Panel Discussed job locking and employersponsored Health Insurance. My question is, how effectively do Health Savings accounts reduce the prevalence of job locking and also do you think incentivizing employers to provide greater access and opportunity and portability to Health Savings accounts fight further reduce job locking . You got a proposal on hsas as they exist right now dont do much in terms of job locks. Job lock is the idea youre going to stay in your job because youre afraid of losing your insurance. And hsas dont do a whole lot to make the insurance more portable. Affordable. So you might van hsa through an individual market plan, but the hsa doesnt do much to make that plan might be portable, but the hsa doesnt do much to help you afford that plan. Compared to a World Without hsas. However, if you expand hsas in the right way, you can turn them into a vehicle for the worker to receive that 14,000 or 15,000 of their compensation that the employer is using to purchase their Health Benefits. And to take that without adverse tax consequences. If you expand hsas in that way, any employer who wants to stay in business is going to have to give that 14,000 to the worker who earned it then shell be able to buy she can stay on her employer plan if she wants. Use the money to pay the premiums for her employer plan but could also buy without penalty a Health Insurance plan that does not disappear when her job changes. So i think if you expand Health Savings accounts in the right way, you can solve that problem of job loss. In other words, the employer portion of my premium, i could get them to pay into my hsa, which now, of course, would exceed the annual contribution limit. But under your idea, boom, i get the 14,000 and i use that to pay premiums on any highdeductible plan i want. Thats right. The important thing to understand, that 14,000 is part of your earnings. Yep. Its part of your compensation that you dont get to control because of the exclusion, the tax preference for employersponsored insurance. And if you if you were able to control that and workers across the country were able to control that, it would be an effective tax cut on the order of about 828 billion which is larger than the trump tax cuts or efsh the regul or even the reagan tax cuts. Youd get to control part of your earnings that you dont currently get to control. All right. We have time for one more question, i guess. And if nobody else out there has it, i have it. Okay. We got one. Red jacket right here. Sorry. Thanks for taking my question. My names ariel cannocannon. I workgressive policy institute. You were talking about how medicare might be overpaying specialties and how its a wellknown fact. Private insurance pays 240 of medicare rates according to a recent rand study. So if the if were worried about medicare for all costing too much or overpaying physicians, then how come private insurance isnt doing any better . Good question. Thats a great question. Yeah. I think, first of all, the system we have today is not a markdriven system. So lets agree with michael on that point. That we only have an hour and 15 minutes here, so this is a very complicated subject, but the idea that what we have in the United States operates with market signals is not true and so part of the reason why private insurers are overpaying, i agree, i think theres a lot of overpayment in the private side, is because the federal government subsidizes most of that payment. One thing thats been going on from 1945 on, basically, is that on the margin when an employer plan has higher expenses, the federal government is subsidizing it on the order of about 35 through the federal tax break. Okay . So when you spend an extra dollar through your employer plan, 35 cents of it is basically coming from general taxpayers. Okay . When you have a system built on that kind of a structure, its going to overpay. Its going to cost too much because theres not enough discipline, theres not enough money coming directly out of someones pocket that they dont want coming out of their pocket. Okay . If you want a market to work, someone on the margin has to have the decision to say, id rather not spend that extra 100 if i dont have to, and id rather find another use, getting my service elsewhere for 100 cheaper. Okay . Not enough of that is going on in American Health care to put pressure back on the private side, and it starts a lot with this employer system. So, but beyond that, in the medicare system, it also operates that way which is another reason why theres cost inflation, theres too much utilization, et cetera. So when people say they want a marketdriven system, which i advocate for very strongly, what it means in essence is someone has to pay more out of their own pocket when they buy higher cost health care. If you dont have that, you dont have a marketdriven system. And we dont have we have it a little bit in the United States, but we dont have nearly enough of it to have a marketdriven system, therefore, the Pricing System is all messed up across the board. And people are getting overpaid. Theres inflation. Theres high prices. Theres overutilization. Theres waste. Theres all kinds of problems in American Health care because we dont have that kind of a marketdriven system. One other point here, though, is its not easy to get to a marketdriven system. There is one element of this that is hard to get around and has to be addressed which is that theres a massive information imbalance and so people basically trust and want to trust and dont want to deal with themselves medical decisionmaking. So when your physician says you need to get this done, there are some people, maybe the person to my left, will question is, think about it, look it up on the interpr internet, try to figure it out on his own. A lot of people say i dont think i can figure this out on my own, im going to need to trust someone to navigate me through the system. Because of that, the consumer is not in the same position they are when they go out to buy a car, even a house or lots of other complicated things. So this trust relationship kind of compromises the market a little bit. And has to be addressed in some way, ways, so that the market can function better. Michael, last word, then paige will get the very last word. Right now as i sit here, im currently not undergoing a spinal fusion procedure my orthopedist recommended for me. You asked why are prices so much higher for private insurance than for medicare or medicaid . If all we had were a tax preference for health care, wed expect that to, as i say, shift the demand curve and prices to rise. If all we had were a if we had on top of that a tax preference for Health Insurance, we would expect that to shift the demand curve a little more. Prices to rise a little more. On top of that, though, we have a tax preference for Health Insurance purchased by an employer with money we never seized or even more insulated from the cost, we expect that to shift the demand curve even more and prices rise even more. Add to that the medicare and medicaid programs. They have an effect on private prices as well. Its not the costshifting effect that everyone seems to think it has, which is that while medicare pays below market rate, Health Care Providers have to make it up by charging private insurers more. That hypothesis suggests if you reduce medicare and medicaid rates, then providers will charge private payers even more. Actually, the literature suggests that the more medicare and medicaid pay, the higher the private prices go, which is actually very consistent so that the very high prices that were seeing private insurers pay are actually very consistent with my hypothesis that medicare is often overpaid. Rather than underpaid. Paige, last word. Yeah. I would just add, insurers loved the Affordable Care act. To them, it was the perfect solution. Basically it was the government saying were going to give you money to cover all of these people and were going to require them to buy Health Coverage. Yeah, i just think, you know, youre going to continue to have the system that were talking about, all of these issues with private coverage, the employer system is so entrenched, and i dont see a lot of movement by republicans or democrats to kind of want to move away from that. In fact, when you look at the democratic candidates, they came out of the gate, rahrah, medicare for all. We all signed on to bernies bill. Youve actually seen a lot of them back away from that and say, well, we think there should be a rule for private coverage, we really dont want to take peoples employersponsored coverage away from them because i think consumers have a really weird relationship with their private coverage. Day say on one hand, premiums are going up, way too expensive, we dont like it, but we also dont want the whole system to be upended and so democrats have seen this as really politically difficult position so youve seen senator Kamala Harris suggest this idea of private plans continuing to be able to offer medicare, plans youve seen with pete buttigieg, you know, suggest medicare for all who want it. So, you know, people should have the option of staying on employersponsored coverage or buying into medicare. So, you know, i think they made really good points about the cost of private coverage, but i dont really see, you know, the system ultimately changing in really significant ways, probably at least in the next couple of years. Thank you, paige, thank you, michael, thank you, jim, thank all of you for coming. Thanks. Friday, Funeral Services will be held for maryland congressman Elijah Cummings who died last week. The 13term congressmans life will be celebrated at New Psalmist Baptist Church in baltimore, maryland. Watch live starting at 10 00 eastern on cspan, online at cspan. Org or listen live on the free cspan radio app. Live friday night, two candidates challenging President Trump for the republican nomination. Cspan hosts a conversation with former Massachusetts Governor bill weld and former South Carolina governor and congressman mark sanford. They talk about their plans, strategies, and why theyre running against the president. Theyll also be taking your calls, tweets, and facebook comments. Part of cspans campaign 2020 coverage, live friday at 8 00 p. M. Eastern on cspan. Watch any time on cspan. Org and listen wherever you are using the free cspan radio app. Politikrcon, unconventional political convention, is live from Music City Center in nashville saturday at 2 00 p. M. Eastern on cspan. Speakers include political pundit ann coulter and columnist david frum. Former fbi director james comey and chief political analyst for msnbc and nbc news, nicolle wallace. Political commentators James Carville and sean hannity. And former minnesota senator al franken. Watch live on cspan, any time on cspan. Org, and listen wherever you are using the free cspan radio app. If im a socialist, i really am not caring too much about popular opinion or pleasing a consumer. In fact, you know, when we when we socialize things like health care, they just say, well, yeah, everybodys going to get it, youll no longer be bankrupt, dont have to worry about your bills, but youll have to have rationing. Sunday at 9 00 p. M. Eastern on afterwards, in his latest book, the case against socialism, Kentucky Republican senator rand paul talks about the history of socialism and argues that theres a new threat of socialist thinking on the rise in america. Hes interviewed by republican congressman matt gaetz of florida. Seems as though youre making the argument that a country that is more socialist becomes more selfi selfish. I think that is true. Its an irony in a way because they would profess to be, you know, its for the other man, everything for someone else. And yet in the end, it is driven by selfishness. Watch afterwards sunday night at 9 00 eastern on booktv on cspan2. Next, Panel Discussions on the importance of military and civilian National Service programs. This event was hosted by the brookings institution