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Bernie Sanders's single-payer health care plan would cost twice as much as the candidate estimates, according to a new analysis from the Urban Institute's Health Policy Center.
The Washington-based, left-leaning think tank estimates that Sanders's plan to provide government-run health care for all Americans would increase federal spending $32 trillion over the next decade — well above the $15.3 trillion that Sanders has said he would raise in new revenue, or the $13.8 trillion he believes his health plan would cost.
This would, the Urban Institute estimates, leave the government $16.6 trillion short of the funds it would need to pay for a health care plan that covers all Americans. And filling in that shortfall wouldn't be easy. It would require either more taxes on middle- and low-income Americans — or a very significant government deficit.
"Sanders's tax plan is very heavily tilted toward high-income people, so he couldn't just rely on additional taxes from them," says Len Burman, the director of the Tax Policy Center, which also analyzed Sanders's tax plan. "Other countries that offer these types of systems typically provide many fewer benefits, and their tax systems are much more broad-based."
The deficit the Sanders plan would cause, Burman says, "could be very damaging to the economy. If the government is borrowing more, that pushes up interest rates. It makes it harder for people to buy their own homes. It's very large relative to the size of the economy."
The Sanders campaign responded to the Urban Institute report, arguing that it overestimated the cost of his plan, pushing back against specific assumptions (about things like administrative costs and what states would contribute) which they argue would lessen the burden on the federal government.
In a statement, the campaign lists $9.1 trillion in specific savings that they believe the Urban Institute leaves out. Of course, that still leaves the plan trillions short of the funds it needs to operate, if the Urban Institute's analysis is correct.
But the Sanders campaign's larger argument is that Urban's estimates are way too high. At the core of that dispute are much more fundamental questions about how patients, pharmaceutical companies, and health providers would change their behavior in reaction to a plan as generous as what Sanders envisions. If the Sanders campaign is right, then the plan is more than fully funded. But if analysts like the Urban Institute or Emory health expert Ken Thorpe are right, then it's severely underfunded.
How Sanders's vision of health care works — and why it's so expensive
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Sanders's vision of health care in America is one that eliminates any out-of-pocket spending for consumers. It does away with copayments and deductibles, making a government plan responsible for all medical spending.
The Sanders plan would shift costs away from employers — which currently provide 154 million Americans with insurance — and onto the government. Both Sanders and the Urban Institute agree this to be the case.
Where they differ, however, is on how much money they think the government would end up spending. The Urban Institute estimates that three main factors would significantly raise government health care spending:
- Millions more Americans would get insurance. The Affordable Care Act extended coverage to millions of Americans — but it also left millions uninsured, including undocumented workers and those who still couldn't afford coverage. The Urban Institute estimates the Sanders plan extends coverage to an additional 28.3 million Americans (this includes undocumented workers, although the Sanders campaign has not specifically commented on where that population would fall in its proposal).
- Americans would use more health care if they didn't face financial barriers. When copays and deductibles drop, patients tend to go to the doctor more. And that could be a good thing, signaling that people are getting care they need but couldn't previously afford. The Urban Institute used data from Medicaid — the public program that covers low-income Americans, where patients rarely face any fees for using health care — to estimate how demand for health care would increase.
- The Sanders plan covers an expensive service that most insurance plans don't. That service is long-term care, for those who need medical care that can last weeks or months. Right now, Americans can purchase private long-term care benefits, but few do. UI estimates that this program would cost $4.1 trillion over a decade.
Taken together, the Urban Institute argues that these and other changes would create a health care system that is significantly more expensive than what the Sanders campaign has estimated.
Urban is upfront that there are limitations to its analysis. There are details that haven't been covered in Sanders's policy proposals — whether it would cover undocumented workers, for example — that could drive the price tag up or down.
The Sanders campaign has disputed some of their assumptions. In particular, it has said that administrative costs would be significantly lower than Urban estimates, leading to nearly $500 billion in annual savings. Urban has responded to this claim saying they believe their estimate of administrative costs is accurate, and similar to the costs of administering the Medicare program.
The Sanders campaign also disagrees with how Urban Institute modeled drug prices. The report does assume 25 percent reduction on prescription costs under the Sanders plan, although the campaign calls this a "significant" underestimation.
But this is now the second analysis that has found the Sanders health care proposal to be trillions of dollars more expensive than the campaign estimates. (You can read more about the first analysis, from Emory University health economist Ken Thorpe, here.)
Sanders wants to go beyond Canadian-style health care. That's expensive.
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Sanders has often spoken admiringly of other countries' universal coverage systems.
But one thing that often gets lost in his commentary — and that makes Sanders's plan expensive — is that the Vermont senator wants to build a health care system that's even bigger and more comprehensive than those that exist abroad.
Sanders's plan would, according to campaign documents, cover "inpatient to outpatient care, preventive to emergency care, primary care to specialty care, including long-term care and palliative care, vision, hearing, and oral health care, mental and substance abuse services as well prescription medications, medical equipment and supplies, diagnostics and treatment."
This plan is more generous than what most private insurance plans in the United States currently cover — and more generous than international single-payer plans. Canada, for example, does not include prescription drugs in its single-payer plan, to help hold down costs. Switzerland's universal coverage plan relies on patients to pay for most long-term nursing costs. In the Netherlands, every adult pays a deductible (between $239 and $941, depending on income).
Universal coverage, in other words, isn't typically synonymous with "no patient spending."
In the Sanders plan, however, that isn't the case. Universal coverage and zero patient spending go hand in hand, all part of a new and improved American health care system.
And it is probably true that Americans would like a country without copays and deductibles, one in which you leave the doctor's office with a prescription rather than a receipt. That system is an expensive one, though — one that multiple analyses suggest Sanders's current tax proposals would not fund entirely.
Correction: an earlier version of this story misstated the amount of administrative savings the Sanders campaign believes it would achieve. It is $500 billion annually, not over a decade.
