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September 18 2017

The Civic Costs of Medicare for All

by Charlotte Hays

A single-payer system for healthcare--or "Medicare for all," as Senator Sanders calls it--is on the verge of becoming the Democratic Party's hot, new orthodoxy. 

We've had plenty of critiques on the economic shortcomings of the single-payer system (it would break us), but Jay Cost provides a look at the civic costs of Medicare for all: it would have a devastating effect on our republic.

In a must-read article at NRO, Cost explains:

I wish to call attention to the civic consequences of single-payer. It would elevate the medical-services industry to a dangerous height in our government and undermine the republican principle that the people, rather than special interests, should rule.

. . .

Under such public-private partnerships, factions coordinate with the government, not out of the kindness of their hearts, but because the state makes it in their interests. The groups, in other words, derive a profit from their dealings with Washington, D.C., which in turn means that the feds are responsible for maintaining their bottom lines.

In the private economy, this is really no problem. It is merely the exchange between two independent actors of goods or services for cash, which happens billions of times every day. The problem is that the government is not independent. Far from it. The government is open to be influenced by the very factions that it is contracting with.

Flush with the cash they received from providing services to the government, these factions have the resources to pull the policy needle in their direction. In other words, public subsidies are a pathway to political influence, creating “special” interests that are often able to guide government policy at the expense of the general interest. The history of American self-government gives us many examples of how these bargains can go awry.

All the way back in 1790, Alexander Hamilton sought to use public creditors as the basis for creating a national currency. He succeeded, but he made the government so dependent upon the speculators that he was forced to bail them out not once, but twice, in 1791 and 1792.

. . .

When the government wishes to accomplish some public purpose that it does not have the means to do itself, it contracts with private parties to accomplish the end. In exchange, the state promises, in effect, to guarantee the private parties a profit from the arrangement. The interest groups gladly accept and then use their public bounties to build a political power base, ensuring that their ends are secured, even if they are not in the public interest.
 

Cost gives a rundown on similar experiments in American history, including the government loans and other benefits that made railroad companies so powerful that they lobbies Congress to avoid paying back their debts. More recently, Fannie Mae and Freddie Mac made enormous profits from public charters. They invested much of this money in making sure that regulation and oversight of their activities were lax.

Cost maintains that Medicare for all will be more corrosive than any of these former experiments:

“Medicare for all” would be like creating a fearsome new Pretorian Guard. These elite soldiers were tasked with protecting the life of the Roman emperor, but their rarefied position gave them extraordinary influence over the affairs of state, to the extent that they sometimes assassinated emperors they opposed and set up new ones more to their liking.

If the federal government commits to giving trillions to the medical-services industry to protect the lives of the American people, expect that industry to wield dangerously inflated influence.

And it would be dreadful for the republican quality of our system.

Yes, the economic effects of Medicare for all would be ruinous.

But the civic consequences would be even worse.  

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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