How Much Does It Cost?

The Daily Signal posted an article today about single-payer health care. This was one of the signature issues of the Bernie Sanders’ campaign for President and is still being considered in some states.

The article reports:

Earlier this year, Sanders introduced a big and comprehensive “Medicare for All” proposal that would create a government-controlled health care system at the national level. The plan has gained momentum among Senate Democrats, but has also slammed into a fiscal reality check.

Three independent estimates from a diverse range of health care economists and policy analysts have highlighted the enormous additional cost of Sanders’ proposal. The liberal Urban Institute estimated that the 10-year costs would amount to a stunning $32 trillion, while the conservative Mercatus Center at George Mason University put the cost at $32.6 trillion.

Professor Kenneth Thorpe of Emory University, a former adviser to President Bill Clinton, used a different set of assumptions and set the 10-year price tag at $24.7 trillion.

Charles Blahous of the Mercatus Center said his own $32.6 trillion estimate made generous concessions for the purposes of calculation, and he accepted Sanders’ assumptions that the proposal would also generate savings, such as massive payment reductions to doctors and other medical professionals.

Blahous added that more realistic assumptions underlying estimates of the Sanders legislation would likely push the total taxpayer price tag even higher than $32.6 trillion.

The article mentions what has happened to state efforts to institute single-payer programs:

Officials in Sander’s home state of Vermont tried to make their state the first in the nation to create a “single payer” health care system. The ambitious proposal died after the costs were made known. According to an official state analysis, the proposal would have cost a total of $4.3 billion, with the state cost reaching $2.6 billion. As The Boston Globe noted, the entire Vermont budget in 2015 was just $4.9 billion. The state would have to increase the state personal income tax to 9.5 percent and add an 11.5 percent payroll tax.

Same problems with Colorado. Voters overwhelmingly rejected a Colorado ballot initiative to create a government-controlled health care system. That’s no surprise. According to an independent analysis, the proposed program, funded by an increase in state taxes, would still run an estimated deficit of $7.8 billion by 2028.

Even liberal California legislators have struggled to advance a “single payer” program. Their proposal has stalled, lacking the necessary legislative support. Again, this was not surprising given the cost. A California State Senate report concluded that the cost would total $400 billion and the state would have to raise $200 billion in new taxes.

There are things to consider other than cost. People in countries with single-payer often come to America for health care–it’s not that we are cheaper–we are not–but health care is available here. In Britain, people sometimes wait more than a year for heart surgery. Often they die while waiting. The free market works–even in health care. If America wants to improve its health care and reduce the cost, it needs to introduce the free market. That means getting rid of over-regulation by the government. There should be basic safety standards imposed by the government, but that should be the end of it. The free market works.

The Definition Of Serendipity

Serendipity means a “fortunate or happy unplanned coincidence”. We may be seeing an example of that concept in one of the unintended consequences of the recently passed tax bill.

Yesterday the Associated Press reported the following:

In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes. In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll. A few governors have even called for tax cuts.

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump signed into law last month. Lawmakers and governors in some states are grappling with how to protect their constituents.

Loosely translated this is what is happening as a result of the fact that states with low state taxes will no longer be subsidizing states with high state taxes. Under the current plan, if your real estate taxes were $20,000 a year, which is not unusual in New York, Connecticut, New Jersey or California, you knew you could deduct them on your federal income tax, so it really wasn’t that important to you. Now those deductions will be limited to $10,000 and you will still have to pay the balance to your state.

No one likes it when their gravy train is cut off.

The article further reports:

This week, New York Gov. Andrew Cuomo used his state-of-the-state speech to pledge to sue over the GOP tax plan, which he called “an assault” by the federal government. A lawsuit would add taxes to the growing list of Trump administration policies that Democratic states have challenged in court.

Other states have not committed to sue, but some leaders have indicated they’ll explore the idea.

“I’m certainly not a constitutional lawyer, but the notion that this is not constitutional is something we want to pursue,” said Phil Murphy, New Jersey’s Democratic governor-elect.

Officials in California and Connecticut also said this week they were considering legal options.

In high-tax states, officials have been focused on protecting taxpayers from the impact of a new $10,000 cap on deductions for paying state and local taxes. In California, Connecticut, Massachusetts, New Jersey and New York, more than one-third of tax filers claim the state and local tax deduction on federal taxes; the average deduction in each state is over $15,000.

The Constitution gives Congress the right to levy taxes. Good luck with your lawsuit.

It is remotely possible that fiscal responsibility may be forced on some of our high-taxed states. When you consider that the Founding Fathers saw each state as a laboratory to experiment with unique ideas, it becomes obvious that some states did better than others in controlling expenses. Those states which controlled expenses have been subsidizing those that spent wildly for years. It is nice that things are changing. Now the governments of those states who have overspent need to change.