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Wharton Did An Analysis of Bernie Sanders’ Healthcare Plan

Senator Bernie Sanders’ Medicare for All Act of 2019 could improve population health by 2060, reduce the share of the population that is seriously ill from 14.5% to 13%, increase life expectancy by two years and grow the population by 3%, a new study by Wharton finds.

The Penn Wharton Budget Model (PWBM) released its detailed analysis of Senator Bernie Sanders’ Medicare for All Act of 2019 last week. It found that if Sanders’ plan was financed in a way that avoided increasing debt or raising taxes and instead charged beneficiaries a premium designed to cover the program’s costs, the results would be net positive.

However, the study notes, if the plan is deficit-financed, the negative effects on labor supply, capital accumulation, and GDP would significantly outweigh the positive effects on the economy.

MEDICARE FOR ALL ACT

Senator Sanders’ Medicare for All Act, introduced in April 2019, would essentially create a single federal health insurance program, Medicare for All (“M4A”), to unconditionally cover all U.S. residents.

According to Sanders’ website, the plan would “provide comprehensive health care to every man, woman and child in our country — without out-of-pocket expenses.” Additionally, the bill would improve Medicare coverage to include dental, hearing, and vision care.

“Supporters like Sanders and Warren argue that Medicare for All would not create new health care spending, but rather would simply shift current spending — and, potentially, ultimately reduce overall spending and save money,” according to NPR.

FINANCING STILL UNKNOWN

While PWBM finds positive yields from the Medicare for All Act, it currently is not known how the plan would be paid for.

“Taken literally, Sanders’ Medicare for All Act lacks a financing mechanism, which by long-standing Congressional Budget Office and PWBM convention implies deficit financing,” according to the Wharton study. “Under deficit financing, the plan would reduce GDP by 24 percent by 2060, despite large efficiency gains from lower overhead and reimbursement costs.”

Sanders has explained that prior to releasing details around financing, he just wants Americans to know that they pay more for their healthcare than other countries.

“The fight right now is to get the American people to understand that we’re spending twice as much per capita — that of course, we can pay for it,” he tells NPR. “We’re paying it now in a very reactionary, regressive way. I want to pay for it in a progressive way.”

Sources: Penn Wharton, Sanders.gov, NPR