Rep.-elect Alexandria Ocasio-Cortez (D–N.Y.) tweeted this week that two thirds of the cost of Medicare for All could be offset by cutting $21 in Pentagon spending wasted on accounting mistakes:
$21 TRILLION of Pentagon financial transactions “could not be traced, documented, or explained.”
$21T in Pentagon accounting errors. Medicare for All costs ~$32T.
That means 66% of Medicare for All could have been funded already by the Pentagon.
And that’s before our premiums. https://t.co/soT6GSmDSG
— Alexandria Ocasio-Cortez (@Ocasio2018) December 2, 2018
Not only was she wrong, but she was wrong in a way that shows how even the most prominent and influential proponents of single payer are still disconnected from the realities of budgeting policy and politics.
Arguably the biggest question dogging proponents of Medicare for All is how to pay for it. A recent study by the Mercatus Institute found that the single payer plan drawn up by Vermont Sen. Bernie Sanders would cost more than $32 trillion over a decade, requiring implausibly large reductions in payments to medical providers as well as enormous tax hikes—more than doubling all corporate and individual income tax rates.
Even if you think the economy could withstand such a large and rapid shift of resources from the private to the public sector, an assumption I don’t share, the politics make such a transition effectively impossible. Sanders’ left-leaning home state of Vermont couldn’t stomach the tax hikes required to implement a state-based single-payer system. It’s even harder to imagine a majority of the rest of the country supporting a plan like this. The dual questions of how to pay for it and how to build political support for whatever pay-for is settled on represent a substantial practical challenge to any single-payer campaign. With her tweet, Ocasio-Cortez was attempting to respond to this challenge.
One might charitably describe her response as an error predicated on a misunderstanding. The report she referenced, from an article in The Nation, looked at 18 years of Pentagon budgets; Medicare for All would cost about $32 trillion over 10 years. And the Congressional Budget Office projects that the U.S. will spend about $7 trillion on the military over the next decade, so eliminating all Pentagon spending—an unrealistic goal even if you believe that the military budget is far too large—wouldn’t even free up a quarter of the necessary funds. In addition, the article she cited doesn’t actually say there’s $21 trillion that could be diverted to something other than Pentagon spending. It found that defense dollars are being tracked and shifted around in dubious ways, with the same dollar sometimes accounted for multiple times. The money she wants to spend doesn’t even exist.
As mistakes go, this is embarrassing but in some ways excusable. Legislators, especially new ones, are typically not policy wonks. They leave the policy details to the experts and then sell the big picture.
And therein lies the real problem for Medicare for All. Right now, there are no details. It’s all big picture.
It’s not just that there’s no consensus about which plan to use or some squabbles about granular details. It’s that there’s no plan at all. Despite the uptick in support for Medicare for All among prominent Democratic politicians, no one has yet laid out a clear way to pay for the program. As Matthew Yglesias recently noted at Vox, given the increased salience of Medicare for All in Democratic politics, it’s rather striking how little progress has been made toward developing a clear and relatively detailed policy proposal to back up the idea.
The closest thing supporters have to an answer right now is an argument that there’s no particular need to worry about how to pay for it, because, between public and private payers, America already spends so much on health care that a single payer system would be easy to afford; in fact, they say, single payer would reduce America’s total health care spending by about $2 trillion.
That argument assumes large reductions in payments to doctors and other health care providers, and that’s not a great assumption, given both the heavy resistance from medical professionals and Congress’ long history of refusing to slash provider payments. But even if you accept it, you’d still need a financing mechanism to redirect dollars from where they currently are in the private sector to the public sector. Some sort of tax would need to be put in place, and that tax would almost certainly hit a large number of people, likely including quite a few in the middle class. Until someone lists the combination of taxes and/or spending reductions that would be required to finance the system, single-payer advocates cannot credibly be said to have a plan.
But there’s a bigger issue, which in some ways is even more telling: It’s not always clear what Medicare for All means. Much of the time, as with the Sanders plan, it’s a euphemism for single-payer health care. But often it appears to be an empty slogan for some sort of yet-to-be-defined expansion of the government’s role in providing health coverage—which is to say, something other than single-payer.
Part of the recent enthusiasm for Medicare for All has come from polls showing that the idea is increasingly popular. But polls showing that a majority of Americans support Medicare for All also show that support drops below a majority when it is described as single-payer. Americans, in other words, don’t support single payer. They support Medicare for All, which…isn’t actually a plan. It’s an empty catchphrase symbolizing more government support.
So it shouldn’t really be a surprise that Rep. Frank Pallone (D–N.J.), a single-payer supporter who is set to sit atop the House Energy and Commerce Committee, recently admitted that the votes don’t exist to pass single payer. Some Democratic lawmakers are attempting to shift the focus to merely expanding Medicare as it exists now, by letting anyone 50 or over buy in.
But even that idea reveals some of the internal conflicts on the left when it comes to health care: Sanders, arguably the leader of the Medicare for All movement, recently said he won’t support Medicare buy-in legislation. For Medicare for All backers, it’s all or nothing—but lacking financing details or any public consensus about what the phrase even means, it’s hard to say what “all” is.
The biggest takeaway from Ocasio-Cortez’s tweet, then, isn’t that a single legislator made an error, or even that single-payer proponents continue to have a considerable budget-math problem, although they do. It’s that Medicare for All backers still face the fundamental challenge of defining and building support for a plan that doesn’t yet exist. Until and unless that happens, Medicare for All will remain little more than a slogan advertising a fantasy of costless, frictionless government intervention.