As might be expected, the current council of economic advisors has zero appetite for radical change when it comes to health care policy. (Photo: Shutterstock)

Well, the suspense is over: the Trump White House is not a fan of Medicare for All.

The recently released annual report by the White House Council of Economic Advisers goes to some length to argue that a Medicare-for-All reform, a concept promoted by several Democratic candidates for president, is a bad idea for the country.

The report explains why a universal health care system more line with the model of Democratic Socialist countries such as Denmark or Norway will not work in the U.S. But the report is not all negative about health care policy: it talks up the Trump administration’s repeal of the individual mandate and other efforts to expand choice and cut costs for health care consumers.

Reporting on a strong economy

The annual report is really not much different than reports from previous years and previous administrations: it touts the successes of the current administration and promotes policies that the administration favors. So this year’s report ticks off the good news: GDP growth of 3.2 percent; a decline in the unemployment rate down to 3.7 percent; and an average of 223,000 jobs added per month for 2018.

The report argues that these good numbers are a result of the Trump administration’s emphasis on free markets: “A unifying theme throughout this report is that these conditions are generally achieved by providing maximum scope for the efficiency of free enterprise and competitive market mechanisms,” the report said.

Sticking with the devil you know

As might be expected, the current council of economic advisors has zero appetite for radical change when it comes to health care policy. Like much of the health care industry itself, the report sees Medicare for All proposals as an embrace of socialized medicine, threatening a massive disruption that would harm stakeholders and patients alike.

“These proposals, though well-intentioned, mandate a decrease or elimination of choice and competition,” the report says of the current Medicare for All plans. “We find that these proposals would be inefficiently costly and would likely reduce, as opposed to increase, the U.S. population’s health. We show that funding them would create large distortions in the economy. Finally, we argue that the universal nature of ‘Medicare for All’ would be a particularly inefficient and untargeted way to serve lower- and middle-income people.”

A good part of the health care section of the report is rather academic: price elasticity, information asymmetry, and the problem of moral hazard are discussed. But the authors also note some hard numbers; for example they show that the average life expectancy of cancer patients is higher in the U.S. than with European Union countries, which have varying degrees of socialized medicine.

The report also talks about waiting times for procedures and appointments—although some socialized medicine countries actually perform better or roughly the same as the U.S. with these measures, most do not. And it makes the case that Medicare for All would actually harm seniors in the U.S. by reducing patient choice.

“The current Medicare system, which mixes public and private elements—including competition between hundreds of Medicare Advantage plans and between hundreds of Medicare Part D drug plans and public and private financing—is superior to foreign, single-payer systems,” the report say, citing data that shows significantly shorter wait times for U.S. seniors in seeing a specialist.

There are, of course, other studies that show socialized medicine countries delivering health care with better outcomes than in the U.S. at much lower cost—but the report does identify a real problem: how to get to a better system without creating an economic train wreck. The Trump advisers’ preference for more market-driven solutions is understandably more in line with President Trump’s worldview than that of Bernie Sanders.

Deregulation as health reform

The report also talks up the current administration’s efforts to improve choice and competition in health care markets, mainly by easing regulations. The administration’s removal of the individual mandate fee as part of tax reform is one example of this. The report said that this move will help higher-income Americans who faced very high premiums under the ACA, and argues that eventually the move will benefit the U.S. economy overall.

The report also talks up associated health plans and short-term insurance as two market-driven innovations that will give consumers more insurance options at a lower cost. These ideas have been given regulatory relief under the Trump administration, allowing employers and insurance carriers room to experiment with the concepts. The report estimates that billions in health care spending could be saved through wider adoption of these ideas.

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