[Senate Hearing 117-260]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 117-260

                      MEDICARE FOR ALL: PROTECTING HEALTH, 
                            SAVING LIVES, SAVING MONEY

=======================================================================

                                 HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 12, 2022

                               __________

           Printed for the use of the Committee on the Budget
           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]          

                                 ______
                                 
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-607                     WASHINGTON : 2022                     
          
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                        COMMITTEE ON THE BUDGET

                   BERNARD SANDERS, Vermont, Chairman
PATTY MURRAY, Washington             LINDSEY O. GRAHAM, South Carolina
RON WYDEN, Oregon                    CHARLES E. GRASSLEY, Iowa
DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     PATRICK TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             RON JOHNSON, Wisconsin
JEFF MERKLEY, Oregon                 MIKE BRAUN, Indiana
TIM KAINE, Virginia                  RICK SCOTT, Florida
CHRIS VAN HOLLEN, Maryland           BEN SASSE, Nebraska
BEN RAY LUJAN, New Mexico            MITT ROMNEY, Utah
ALEX PADILLA, California             JOHN KENNEDY, Louisiana
                                     KEVIN CRAMER, North Dakota

                Warren Gunnels, Majority Staff Director
                 Nick Myers, Republican Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              

                         THURSDAY, MAY 12, 2022

                                                                   Page

                OPENING STATEMENTS BY COMMITTEE MEMBERS

Chairman Bernard Sanders.........................................     1
Ranking Member Lindsey Graham....................................     5

                               WITNESSES

Statement of Mr. Adam Gaffney, MD, MPH, Assistant Professor of 
  Medicine, Harvard Medical School...............................     8
    Prepared Statement of........................................    42
    Questions and Answers (Post-Hearing) from:
        Senator Chris Van Hollen.................................   147
Statement of Ms. Bonnie Castillo, RN, Executive Director, 
  National Nurses United.........................................    10
    Prepared Statement of........................................    54
    Questions and Answers (Post-Hearing) from:
        Senator Chris Van Hollen.................................   149
Statement of Mr. Abdul El-Sayad, MD, DPhil, Harry A. and Margaret 
  D. Towsley Foundation, Policymaker in Residence, Gerald R. Ford 
  School of Public Policy, University of Michigan................    11
    Prepared Statement of........................................    91
    Questions and Answers (Post-Hearing) from:
        Senator Chris Van Hollen.................................   153
Statement of Ms. Grace-Marie Turner, President, Galen Institute..    14
    Prepared Statement of........................................   102
Statement of the Honorable Charles Blahous, Ph.D., J. Fish and 
  Lillian F. Smith Chair, Senior Research Strategist, Mercatus 
  Center, George Mason University................................    19
    Prepared Statement of........................................   131
Statement of the Honorable Phillip Swagel, Ph.D., Director, 
  Congressional Budget Office (CBO)..............................    36
    Prepared Statement of........................................   143
    Questions and Answers (Post-Hearing) from:
        Senator Chris Van Hollen.................................   154

              ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Statement of Eagan Kemp, Health Care Policy Advocate, Public 
  Citizen, Submitted for the Record by Chairman Bernard Sanders..   157
Letter from Grover G. Norquist, President, Americans for Tax 
  Reform (ATR), Submitted for the Record by Ranking Member 
  Lindsey Graham.................................................   167
Letter from Americans for Prosperity, Submitted for the Record by 
  Ranking Member Lindsey Graham..................................   169
Letter from Thomas A. Schatz, President, Council for Citizens 
  Against Government Waste, Submitted for the Record by Ranking 
  Member Lindsey Graham..........................................   180
Letter from Adam Brandon, President, Freedom Works, Submitted for 
  the Record by Ranking Member Lindsey Graham....................   182
Article ``Medicare For All would mean worse care for all'' by 
  Michael F. Cannon, Opinion Writer, CATO Institute, Submitted 
  for the Record by Ranking Member Lindsey Graham................   183
Article ``Democrats seize on cherry-picked claim that `Medicare-
  for-all' would save $2 trillion'' by Glenn Kessler, Staff 
  Writer, The Washington Post, Submitted for the Record by 
  Ranking Member Lindsey Graham..................................   186
Health Care System Performance Compared to Spending Graphic, 
  Submitted for the Record by Senator Jeff Merkley 



 
    MEDICARE FOR ALL: PROTECTING HEALTH, SAVING LIVES, SAVING MONEY

                              ----------                              


                         THURSDAY, MAY 12, 2022

                                       U.S. Senate,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 11:02 a.m., via 
Webex and in Room SH-216, Dirksen Senate Office Building, Hon. 
Bernard Sanders, Chairman of the Committee, presiding.
    Present: Senators Sanders, Merkley, Van Hollen, Padilla, 
Graham, Grassley, Crapo, Johnson, Braun, and Scott.
    Staff Present: Warren Gunnels, Majority Staff Director; 
Nick Myers, Republican Staff Director.

             OPENING STATEMENT OF CHAIRMAN SANDERS

    Chairman Sanders. Okay, let us get going. Let me thank the 
Committee members who are here. Let me thank the panelists who 
are here. I think all are here in person; I think we will have 
one virtually. Let me thank all of you for attending the very 
first U.S. Senate Committee hearing on Medicare for All.
    Let me also thank the many dozens of organizations 
throughout our country who support Medicare for All and the 
tens of thousands of doctors, nurses, and other health care 
professionals who support this legislation.
    Let me thank the 15 Senate co-sponsors that we have on this 
bill and the 122 members of the House who support very similar 
legislation.
    And, mostly, let me thank the American people who, by the 
millions, understand as I do that our current health care 
system is dysfunctional, it is extraordinarily wasteful and 
expensive, and it is cruel. The American people understand as I 
do that health care is a human right and not a privilege and 
that we must end the international embarrassment of our great 
country being the only major nation on Earth that does not 
guarantee health care as a human right to all of its people.
    It is not acceptable to me, nor to the American people, 
that over 70 million Americans today are either uninsured or 
underinsured. As we speak, right now, this moment, there are 
millions of people in our country who would like to go to a 
doctor, who have to go to the doctor, but simply cannot afford 
to do so. This is unacceptable, this is un-American, and this 
cannot be allowed to happen in the wealthiest country on Earth.
    Bottom line is that your health and your longevity, how 
long you live, should not be a factor of how much money you 
have. Health care is a human right that all Americans, 
regardless of income, are entitled to, and all Americans 
deserve the best health care that our country can provide.
    As Chairman of the Budget Committee, it is not acceptable 
to me that we end up spending over twice as much per capita on 
health care as other major countries around the world, 
something we do not see too much on TV, you do not read in the 
newspapers, you do not hear it discussed here. My friends are 
concerned about the budget deficit, concerned about how much 
money we spend. Well, somebody should talk about why it is that 
we are spending almost twice as much per capita on health care 
as do the people of any other major country on Earth while at 
the same time, despite all of that expenditure, our life 
expectancy, how long we live, is less than most other major 
countries and our health care outcomes in a number of areas lag 
behind other countries.
    Unbelievably--and I want the American people to hear this. 
You know, we talk about budget deficits or anything else here. 
Unbelievably, according to the Center for Medicare and Medicaid 
Services, CMS, we are now spending $12,530 per capita on health 
care. You got that? $12,530 for every man, woman, and child in 
this country. This is an outrageous and unsustainable sum of 
money.
    And here is the important point. In comparison, let us take 
a look at what other countries are spending for health care 
which is as good or maybe better. United Kingdom spends $5,200. 
Remember, we spend over $12,000. Canada spends $5,300. France 
spends $5,500 per person. Germany spends $6,700. All of those 
countries provide universal health care, i.e., for all of their 
people.
    The key question that we should be discussing as a Congress 
is: How does it happen that we spend so much money for health 
care but get so little in return?
    Frankly, I am tired of talking to doctors--and we will have 
some here today--who tell me about the patients who have died 
because they were uninsured or underinsured and walked into 
their offices too late with untreatable conditions. And let us 
remember, again, not widely discussed, but we are losing, 
according to the best studies, over 60,000 Americans every year 
who die unnecessarily because they are uninsured or 
underinsured.
    I am tired of seeing working-class families and small 
business pay far more for health care than they can afford, 
which forces more than 500,000 Americans to declare bankruptcy 
each year because of medically related expenses. In America, 
families should not be driven into financial ruin because 
somebody became seriously ill in that family. Can you imagine 
that? Some kid comes down with leukemia, and a family goes 
bankrupt? Does that make any sense to anybody?
    I am tired of hearing from Americans who have lost loved 
ones because they could not afford the unbelievably high cost 
of prescription drugs, and I think every Senator has talked to 
patients, has talked to constituents, who tell them what these 
outrageously high costs of prescription drugs have done. One 
out of four patients in America cannot afford the prescription 
drugs their doctors prescribe.
    You want to hear about crazy, and you want to hear about an 
irrational health care system? Crazy is when a patient walks 
into a doctor's office, gets a diagnosis, doctor writes out a 
prescription, and the patient cannot afford to fill that 
prescription, becomes sicker, ends up in the emergency room or 
the hospital, a greater expense to the system. My friends, that 
is called crazy.
    I am tired of talking with people who are struggling with 
mental illness but cannot afford the mental health counseling 
they desperately need. Last year, as you know, a record 
breaking 100,000 people died of drug overdoses. And I will tell 
you that in my office, and I suspect the offices of every 
Senator here, we get desperate calls from constituents who say, 
``Somebody in my family desperately needs mental health 
counseling. I am worried,'' but far too often we cannot help 
them get the care that they need.
    It is not there because in the system, geared toward the 
profits of the insurance companies rather than the needs of the 
American people, we do not have enough psychologists and 
counselors. We do not have enough doctors. We do not have 
enough nurses. We do not have enough dentists. We do not have 
enough medical care providers. We spend twice as much as any 
other major country. We do not have even have the health care 
providers that we need to take care of our people.
    And also, I am tired of seeing people in my own State and 
around this country who are walking around with teeth rotting 
in their mouths because they cannot afford the dental care that 
they need because dental care is health care, and on and on it 
goes.
    But let us be clear about something, and this is maybe the 
most important point that I want to make. The current debate 
that we are having on health care and Medicare for All really 
has nothing to do with health care because in my view this 
dysfunctional health care system cannot be rationally defended.
    What this debate has everything to do with is the 
unquenchable greed of the health care industry and its desire 
to maintain a system which fails the average American but which 
makes the industry huge profits year after year after year. 
While ordinary Americans struggled to pay for health care 
during this pandemic--and we will talk about the impacts of the 
pandemic on health care--the six largest health insurance 
companies in America last year made over $60 billion in profit, 
led by United Health Group which made $24 billion in the midst 
of the pandemic in 2021.
    But it is not just the profits of the insurance companies. 
CEOs make exorbitant compensation packages. CEOs of 178 major 
health care companies collectively made $3.2 billion in total 
compensation in 2020, up 31 percent from 2019, all in the midst 
of the pandemic. According to Axios, in 2020, the CEO of Cigna, 
David Cordani, took home $79 million in compensation while 
people died in the middle of the pandemic.
    In terms of the drug companies, the pharmaceutical 
industry, not much different. Last year, Pfizer, Johnson & 
Johnson, and AbbVie, three giant pharmaceutical companies 
increased their profits by over 90 percent to $54 billion. The 
CEOs of those companies also receive huge compensation 
packages.
    So that is what the debate is about. The debate we are 
having is whether we have a health care system which provides 
quality care to all in a cost-effective way or do we have a 
system which makes the drug companies and the insurance 
companies and their executives very, very wealthy.
    Now in order to defeat Medicare for All, these very 
powerful special interests, the drug companies, the insurance 
companies, et cetera, have spent millions of dollars against 
me, against other proponents on 30-second TV ads, full-page 
magazine ads, and corporate-sponsored studies to frighten the 
American people about Medicare for All, and I think we are 
going to hear some of that being discussed this morning.
    And this is, by the way, exactly what happened before the 
passage of Medicare in the 1960s, which was often attacked at 
that time as being socialism. Meanwhile, Medicare is today the 
most popular health care program in the country.
    Let me give you just a few examples of the kind of power we 
are up against when we try to create a health care system that 
guarantees health care for all people. Since 1998, the private 
health care sector has spent more than $10.6 billion--that is 
health care money that people paid--$10.6 billion on lobbying, 
and over the last 30 years it has spent more than $1.7 billion 
on campaign contributions to get Congress to do its bidding. We 
pay our health care bills. They take that money and spend it on 
lobbying and campaign contributions.
    The pharmaceutical industry right now, at this moment, has 
1,500 paid lobbyists, including the leadership, formal 
leadership, of the Democratic and Republican party right here 
on Capitol Hill, doing everything they possibly can to tell us 
that we should not lower the cost of prescription drugs. That 
is how business is done in Washington.
    Well, I think many of us have a different idea, and that is 
that maybe, just maybe Congress should represent the American 
people and not lobbyists and large corporations.
    So what does Medicare for All do? What is it that some of 
my colleagues are so strongly opposed to? Well, this 
legislation will do, again, what many, virtually every other 
country on Earth does. It would provide comprehensive health 
care to all without out-of-pocket expenses and, unlike the 
current system, would allow freedom of choice regarding health 
care providers, no more insurance premiums, no more 
deductibles, no more co-payments. And comprehensive means the 
coverage of dental care, vision, hearing aids, prescription 
drugs, and home- and community-based care.
    The transition to the Medicare for All program would take 
place over four years. The first year, the benefits for older 
people would be expanded to include dental, vision, and 
hearing, and the eligibility age for Medicare would be lowered 
to 55. All children under the age of 18 would be covered. And 
gradually, over a four-year period, those programs would be 
provided to every American.
    Would a Medicare for All health care system be expensive? 
The answer is yes. But while providing comprehensive health 
care for all, it would be significantly less expensive than our 
current dysfunctional system because it would eliminate an 
enormous amount of the bureaucracy, profiteering, 
administrative costs, and misplaced priorities inherent in our 
current for-profit system.
    Under Medicare for All, there would no longer be armies of 
people billing us, telling us what is covered and what is not 
covered, and insurance agents hounding us to pay our hospital 
bills. This would not only save substantial sums of money, but 
it will make life a lot easier for the American people who 
would never again have to fight their way through the nightmare 
of insurance company bureaucracy, an experience I think that 
almost all Americans have gone through.
    In fact, the Congressional Budget Office--and we are going 
to hear from them later this morning--has estimated that 
Medicare for All would save Americans $650 billion a year. So 
for my friends who are worried about the deficit, that ain't 
chump change. $650 billion a year is real money.
    Now trust me, I do know these 30-second ads that will be 
coming from the insurance and drug companies that will tell you 
that if Medicare for All becomes law your taxes will go up, and 
they are correct.
    But what they will not tell you is that under Medicare for 
All you will no longer be paying premiums, deductibles, and co-
payments to private health insurance companies. And what they 
certainly will not be telling you is that Medicare for All will 
save the average American family thousands of dollars a year. 
Medicare for All will save the average American family 
thousands of dollars a year.
    Guaranteeing health care as a right is important to the 
American people, not just from a moral and financial 
perspective. It also happens to be what the majority of the 
American people want. In 2020, 69 percent of the American 
people supported providing Medicare to every American.
    Let me conclude, and I thank my colleagues for their 
indulgence, and Senator Graham will have as much time as he 
wants. This is an issue not just of health care. This is an 
issue about what kind of nation we are. It is an issue whether 
we are going to turn our backs on 60,000 people a year who die 
because they cannot get the health care that they need, turn 
our backs on the fact that we live shorter lives than people in 
other countries, turn our backs in that we are spending almost 
twice as much per capita on health care as the people of other 
nations.
    This is an issue that has to be dealt with. Medicare for 
All will become the law of the land, if not now, but in the 
future because this is what the American people want.
    And with that, let me thank Senator Graham for being here 
and give the mic over to him.

              OPENING STATEMENT OF SENATOR GRAHAM

    Senator Graham. Thank you, Mr. Chairman. This is an 
important debate, important hearing, important topics. It has 
tremendous budget impact, and I think it is something the 
nation needs to be talking about.
    But how does something become a law? You vote on it. So 
here is what I would like to see happen. I would like to see a 
vote on your proposal in this Committee this year. I welcome a 
vote on Medicare for All in this Committee this year. You have 
control of the Senate floor. I welcome a vote on Medicare for 
All on the floor of the United States Senate this year.
    You tell your side of the story; we will tell ours. But if 
you really want this to become law, you need to start voting.
    So, Mr. Chairman, I am hoping that after this speech that 
you will be putting your idea up for a vote. And if not, why 
not? Because most of your colleagues would jump out the window 
if they had to vote on this.
    After this discussion by Senator Sanders, you are wondering 
why we need a wall at all. The state of health care described 
by Senator Sanders, it certainly can be made better and needs 
to be reformed, absolutely. Can we spend less and get better 
outcomes? Absolutely.
    But to believe what was being said, why are so many people 
coming to America? Why aren't we leaving to go to someplace 
else where you do not die in the streets?
    So the facts you are describing and the activity to the 
American people really do not matter--match up. If it were as 
you said, one of the most disgusting examples of health care 
being provided on the planet, people would be leaving America, 
not coming to America.
    Under your proposal, every doctor and nurse, in case you 
are watching this, you would become a Federal Government 
employee because the only game in town would be Medicare. You 
would be working for the Federal Government because the single 
provider for health care in this country would be Medicare, 
which is a government-run program.
    The private health care that you have today as an American 
would go away. Once you get to be 65, Medicare takes over, but 
below 65, people are insured in the private sector for the most 
part. That option goes away for you. Everybody in the health 
care system becomes a Federal Government employee. Everybody in 
America goes into a single-payer system run by the Federal 
Government.
    Let us see where we are at with Medicare as it stands 
today. Medicare is an important program. I would like to save 
it. I do not want to sunset it, as some people are talking 
about. I, sure as hell, do not want to invite hundreds of 
millions of people onto the Medicare system that have not paid 
a dime because Medicare for All really becomes Medicare for 
Nobody over time.
    This is what the trustees say. Medicare Part A, which is 
the hospital part, will become insolvent by 2026. To rectify 
the $5 trillion shortfall over 75 years, you have to increase 
taxes by 27 percent or cut spending by 16 percent. Medicare 
spending is expected to surge from 4 percent of GDP to 6.2 
percent by 2045.
    We found common ground here. We need to change that 
narrative. We need to reform Medicare, not invite a bunch of 
people onto the system that would sink it. So it is in a 
fiscally unsound situation. I would like to work with Democrats 
and Republicans to make it sound, which would be a worthy use 
of our time.
    Now just to remind people what life is like in America 
today, inflation is like beyond through the roof: 22.7 percent 
for used cars, 43.6 percent increase in gas prices, fruits and 
vegetables, dairy products. Just go down the list.
    We are talking about the most massive increase in spending 
known to the United States. How would that affect inflation? 
Not well. So, absolutely would crush an economy that needs some 
help.
    So when Americans understand what it means to do away with 
private health care and replace it with a one-size- fits-all, 
they are not so happy. Delay in getting medical tests and 
treatments: 70 percent say they would oppose a system that 
created greater delay. You know, Americans have become used to 
certain things. We like to go to the doctor of our choice. We 
like to have a say about who our doctor is and get timely 
services.
    Our friends in Canada, it takes 19.8 weeks on average to 
see a doctor. There is 1.2 million Canadians on a waiting list 
of critical medical care. In the U.K., it takes 62 days for 
cancer patients to start treatment. 5.8 million British 
residents were on a waiting list for critical medical 
treatment. That is their system.
    If you think it is hard to get to see a doctor now, 
Medicare for All would institute delays that I think would be 
unacceptable to the average American consumer.
    Financing for Medicare for All. All right. What would it 
take? One-size-fits-all for a health care plan could cost as 
much as $40 trillion over the first 10 years. Taxes would 
double, or you would have to cut the budget. Health care 
spending grows to 40 percent. GDP drops by 10 percent because 
you are crowding out the private sector.
    The economic consequences to this plan for the American 
taxpayer would be unimaginable. And it is hard enough to create 
a job in America now. You talk about exploding the size and 
cost of government. This would just absolutely crush the 
private sector.
    There are better ways. Let us save Medicare as it exists. 
But for people under 65, let us try to get better quality by 
getting the health care dollars outside of Medicare in the 
hands of people closer to the patient. Governors are innovative 
out there right now. Let us get money down to the states, get 
flexibility and inventing new preventive health care systems, 
and give consumers a choice they do not have today.
    Right now, Medicare is run by people you will never meet, 
and we need to reform Medicare. We need to save Medicare, but 
the system outside of Medicare, which is a lot of money, let us 
get it down to the state level. Let us come up with ideas that 
would lower costs and increase quality. Let us keep--create 
competition in the health care sector, where innovation is 
rewarded, not punished. And I think that is a better way.
    I want to put health care in the hands of people that you 
actually will meet and have responsibility at the ballot box so 
if you do not like what you are getting you can change the 
results.
    So, Mr. Chairman, this is a debate worth having. I applaud 
your passion. I do not agree with your idea, but here is what I 
would suggest to you and others who believe in this idea. Let 
us vote on it. I am welcoming a debate and a vote.
    Now if we do not vote on it, then it makes me wonder about 
it. If you think it is this great and it is wonderful and it 
fixes all of our problems, let us vote.
    Thank you.
    Chairman Sanders. Thank you very much, Senator Graham.
    We have a great panel, five panelists. We have Dr. Adam 
Gaffney, Dr. Abdul El-Sayed, Ms. Bonnie Castillo, Dr. Charles 
Blahous, and Ms. Grace-Marie Turner.
    Let us begin with Dr. Adam Gaffney. Dr. Gaffney is an 
assistant professor of medicine at Harvard Medical School, a 
pulmonary and critical care physician, and a health policy 
researcher. His research focuses on national health care 
reform, health care equity, and disparities in lung health.
    Dr. Gaffney, thanks very much for being with us.

  STATEMENT OF ADAM GAFFNEY, MD, MPH, ASSISTANT PROFESSOR OF 
                MEDICINE, HARVARD MEDICAL SCHOOL

    Dr. Gaffney. Thank you, Chairman Sanders, Ranking Senator 
Graham, and all of the members of the Budget Committee, for the 
opportunity to discuss this pressing issue with you today.
    So for the past two years, I have been treating patients 
with COVID-19 in the intensive care unit where I work as a 
critical care physician. Some of them, like one million other 
Americans, did not survive, but those experiences have 
reinforced my belief that our nation needs transformative 
health care reform, a Medicare for All program that would end 
much of the medical and financial suffering I have witnessed.
    One of my patients awakened after a long stretch on a 
ventilator, and their first words I later learned were an 
expression of fear about medical bills. Back then, there was at 
least a Federal program that existed that would cover the cost 
of COVID-19 treatment for the uninsured. That program is now 
defunct.
    Today, Americans with COVID-19, just like Americans with 
cancer, with any illness or injury, can face bankruptcy because 
of medical bills. One in five U.S. households are carrying 
medical debt, which now exceeds all other forms of debt sent to 
collection agencies in this, the richest nation in the world. 
Medical debt should not exist, and in many other countries it 
basically does not. It is the consequence of the irrational way 
our country finances medical care.
    But the problem is not only families ruined by health care 
costs. It is worsened health due to inadequate care. Today, 30 
million Americans are uninsured. These patients go without 
needed care day in and day out, and their health suffers 
because of it.
    In the ICU, I have cared for patients critically ill with 
failing hearts, failing kidneys, fluid in their lungs because 
they could not afford routine care for common problems, like 
high blood pressure or diabetes. And my experience is not 
unique. A multitude of rigorous studies have demonstrated that 
uninsurance is lethal. Indeed, it causes well more than 30,000 
deaths every year.
    However, uninsurance is not our only problem. Far from it, 
in fact. More than 40 million working-age Americans are 
underinsured. They are covered but still fear unaffordable 
bills because of high co-pays, deductibles, uncovered services, 
and out-of-network care. And here, too, conclusive research has 
found dire consequences, heart attack patients who delay going 
to the emergency room, risking sudden death, and children who 
end up hospitalized because their parents could not afford the 
co-payments for their asthma medications.
    Sadly, I have also witnessed the consequences of 
underinsurance in my work, seniors with lung disease who have 
rationed their expensive inhalers because of high co-pays, 
patients who have rationed their insulin and ended up with 
severe complications of diabetes.
    Typically, it is only after becoming severely ill that 
patients realize that their insurance is riddled with holes. 
Even if you have coverage, unless you are Elon Musk, you could 
be one illness or injury away from financial ruin.
    Now Medicare for All would solve each of these problems, 
allowing us to cover everyone and at the same time to improve 
the quality of coverage, eliminating co-pays, deductibles, and 
narrow insurance networks. It would finally give patients real 
choice, not the bogus choice between an Aetna or a UnitedHealth 
plan, but the real choice of doctor, clinic, or hospital.
    Now I have indicated some of the medical benefits of 
Medicare of All reform, but the economics are, of course, also 
quite relevant. This reform would uniquely produce the savings 
needed to cover the costs of such a major expansion of care as 
I have described without breaking the bank. The simple fact is 
that there is enormous bureaucratic waste in American health 
care, waste born by both patients and clinicians.
    Of every dollar we spend on health care, 34 cents goes to 
administration and bureaucracy, twice the proportion in Canada. 
Much of that waste is inflicted by private health insurers. 
While 2 percent of traditional Medicare spending goes to 
overhead, private health insurance companies' profits and 
overhead consumes 12 percent or more of our premiums, and much 
of that overhead is spent on contesting claims and denying care 
for patients.
    The bureaucratic burden of American health care explains 
the CBO's estimate that Medicare for All would achieve more 
than $400 billion a year in savings by reducing insurance waste 
alone. And in contrast, some outdated and inaccurate economic 
analyses have low-balled such savings, leading to spurious 
claims that single-payer reform would break the bank.
    Make no mistake, Senators, the economics matter. And as a 
health policy researcher, I spend a lot of time thinking about 
them, but what matters to me most as a physician is creating a 
health care system that will support me in delivering top 
quality care to all of my patients during this pandemic and 
thereafter.
    I became an ICU doctor because I wanted to care for the 
sickest of the sick, but I should not be seeing desperately ill 
patients who could have avoided the ICU altogether if they had 
gotten the care they needed. Those patients have been failed by 
a broken system that puts the prerogatives of health insurance 
executives over the health and welfare of ordinary Americans.
    Medicare for All can solve the problems of our health care 
system, covering everyone, improving the quality of coverage, 
expanding choice, controlling costs, and most importantly, 
improving our health and longevity.
    Thank you.
    [The prepared statement of Dr. Gaffney appears on page 42.]
    Chairman Sanders. Thank you, Dr. Gaffney.
    Our next panelist is Ms. Bonnie Castillo. Ms. Castillo is a 
registered nurse and the Executive Director of the National 
Nurses United and of the California Nurses Association National 
Nurses Organizing Committee. NNU is the largest union and 
professional association of registered nurses in the United 
States, representing more than 175,000 nurses.
    And I just want to take this opportunity to thank all of 
the nurses in this country and the doctors as well. We have 
lost thousands, I think as we all know. I heard this morning at 
least 5,000 nurses have died in this pandemic alone. These are 
the real heroes and heroines of our time, and we thank them 
very much.
    Ms. Castillo, thanks very much for being with us.

STATEMENT OF BONNIE CASTILLO, RN, EXECUTIVE DIRECTOR, NATIONAL 
                         NURSES UNITED

    Ms. Castillo. Thank you. Thank you and good morning. And 
thank you, Chairman Sanders, Ranking Member Graham, and members 
of the Committee, for holding this critically important hearing 
today.
    As a registered nurse and Executive Director of the 
nation's largest union of RNs, I can think of nothing more 
fitting to commemorate International Nurses Day today than by 
advocating for the urgent transition to a Medicare for All 
system. For more than two years, nurses across the country have 
worked on the front lines of the COVID pandemic. We have cared 
for patients despite atrocious working conditions that put 
nurses and our families at risk.
    If it was ever in doubt before, this pandemic has shown 
that our current profit-driven and fragmented health care 
system does not work. It does not provide quality, therapeutic 
care to millions of Americans. It does not value and protect 
its own health care workers, and it is unable to provide a 
comprehensive pandemic response.
    Why didn't nurses and health care workers get the 
protections we needed in the pandemic? It was because our 
employers value money over our lives.
    Why didn't we have the emergency stocks of critical medical 
supplies that we needed? Because the health care industry plans 
their supply chains based on maximizing profit, not 
safeguarding patient care.
    We have seen high death rates from COVID across the 
country. Why? Because there are tens of millions of people in 
the country who are uninsured or underinsured and who, 
therefore, do not get the preventive care they need, putting 
them at much higher risk for severe COVID illness, 
hospitalization, and death.
    But the problems with our health care system far predate 
this pandemic. For years, nurses have witnessed the tragedies 
that result from a profit-driven health care system. Nurses 
watch far too many, so many, patients forego needed care 
because they cannot afford the cost. They watch as insurance 
companies deny lifesaving care, overriding the professional 
judgment of nurses and other medical professionals. Nurses 
watch as patients come to the emergency room with advanced 
stages of illness or disease that could have been avoided if 
they had had access to preventive care.
    The system we have now is beholden to the corporate 
interests that determine who gets treatment and when they get 
it. The United States spends more money per capita on health 
care than any other nation in the world, and yet, we have the 
worst health outcomes when compared to other wealthy countries. 
This system is unaffordable for our country and for our 
patients, and the pandemic has shown that our society cannot 
afford the public health consequences.
    The only way to solve the health care crisis is to enact a 
single-payer, Medicare for All system. Under Medicare for All, 
every person living in the United States would get quality, 
therapeutic health care regardless of the ability to pay. We 
would transform the profit-driven health insurance system into 
one that actually prioritizes patient care.
    As a registered nurse, I can envision exactly what Medicare 
for All would mean for patients. Whenever someone needs medical 
care, they would see the health care provider of their choice 
without any worry about financial barriers to care. We would no 
longer see patients suffer because they cannot afford care. 
Patients would no longer have to actually ration their 
medications.
    For health care workers, we would be able to provide 
medical and nursing care based on our professional judgment 
without the interference of insurance companies.
    The Medicare for All Act would allow for tangible, 
practical improvements to the health care delivery, and 
importantly, it would change the way the hospitals are paid, 
fundamentally shifting their profit motives so that they 
prioritize patient care and worker health and safety instead. 
By paying hospitals through global budgets, the bill would 
ensure that hospitals have the funding necessary for safe nurse 
to patient staffing ratios, pandemic preparedness, and 
occupational safety and health programs.
    The programs would ensure that hospitals in rural and 
underserved areas always get the funding they need to stay 
open. And, it is designed to address health care inequities at 
their core by changing the systems that limit health care for 
low income communities and particularly for communities of 
color.
    As registered nurses, our primary responsibility is to 
protect the health and well-being of our patients. Our existing 
health care system does not allow us to do that. Medicare for 
All is the solution we need to ensure that every patient gets 
the health care they need.
    Thank you.
    [The prepared statement of Ms. Castillo appears on page 
54.]
    Chairman Sanders. Ms. Castillo, thank you very much.
    Our next panelist is Dr. Abdul El-Sayed, who is a 
physician, epidemiologist, and educator. He is a Towsley 
Foundation Policymaker in Residence at the University of 
Michigan Gerald Ford School of Public Policy. Formerly, he was 
Health Director for the City of Detroit, where he was 
responsible for the public health needs of over 670,000 people 
in that city.
    Dr. El-Sayed, thank you very much for being with us.

 STATEMENT OF ABDUL EL-SAYED, MD, DPHIL, HARRY A. AND MARGARET 
D. TOWSLEY FOUNDATION POLICYMAKER IN RESIDENCE, GERALD R. FORD 
        SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MICHIGAN

    Dr. El-Sayed. Chairman Sanders, Ranking Member Graham, and 
members of the Committee, thank you for the opportunity to 
testify before you today.
    My name is Dr. Abdul El-Sayed. I trained as a physician and 
epidemiologist and served the City of Detroit as Health 
Director, where one of my responsibilities was rebuilding a 
health department that had been shut down during the Great 
Recession.
    Today, I teach at the University of Michigan's Ford School 
of Public Policy. There, I find myself explaining the haphazard 
dysfunction of our current health care system to some of the 
brightest young minds in the country. What is a deductible? 
Well, it is like having to pay an extra $19.99 to watch a movie 
on Netflix that you thought you already paid for only this time 
it is for your basic health care needs and it is thousands of 
dollars. They remind me how much nonsense we accept as normal 
in our health care.
    It is partly why I recently wrote a book on the very 
subject, Medicare for All: A Citizen's Guide, with Dr. Micah 
Johnson, and I furnished a copy to each one of your offices.
    I want to start with the two most obvious problems in 
American health care, incomplete coverage and spiraling costs. 
To understand them, I want to correct a basic misunderstanding 
of how we approach health care in this country. We like to 
think of ourselves as consumers, as customers, but we are not.
    Let me just share how being a customer works, just to 
review. Let us say you want some tomatoes. You go to your local 
farmer's market. You find a stall with some you like. You ask 
the seller for the price, and if that price is too high you 
walk away. But if it is good, it is fair, you buy. You tender 
your payment. You get your tomatoes. That is a normal customer 
experience, but health care is not that.
    If I were to have a heart attack right now, in this room, I 
would be rushed to the nearest hospital with no choice of what 
hospital I go to. I would have no choice of what doctor I see, 
what treatment I get. No one shows me a price list, and I have 
no opportunity to just walk away if I do not like anything. I 
am having a heart attack after all.
    Afterwards, a bill is not sent to me. It is sent to a third 
party, my insurer. And rather than being the initiator and 
completer of a financial transaction, I am the reason a 
financial transaction happens between my insurer and my 
provider.
    So ask yourself, given the usual customer experience, are 
we as American health care consumers, are we the customers or 
are we the tomatoes?
    Health care is simply just not a market product. The health 
insurance industry assures that. You might expect insurance 
companies to want to negotiate health care costs downward. 
After all, they are the payer. But they do not. It is one of 
the unintended consequences of the so-called 80/20 rule, 
requiring health insurance companies to spend at least 80 
percent of what they collect on premiums in health care.
    After all, ask yourself, what is the best way to grow your 
20 percent piece of the pie? Make sure you got a bigger pie. So 
they make the pie bigger, and they pass those costs back onto 
us in the form of premiums and deductibles.
    Premiums have risen faster than inflation and wages over 
the past decade, and deductibles have almost doubled, and those 
are dangerous. One study found that high deductibles was 
associated with a nine-month delay in getting treatment for 
breast cancer. The operative part of the word ``insurance'' is 
supposed to be ``sure,'' but in our for-profit system you 
cannot really be sure of anything.
    And those are the first-class health care citizens. There 
are, of course, the second-class health care citizens, over 100 
million of them, 28 million who are uninsured, 87 million who 
are on Medicaid, a critical but underfunded lifeline program. 
Medicaid reimburses far lower than private health insurance so 
a lot of providers just do not accept it.
    Now here is the thing. Reimbursing the same, exact health 
care services at lower rates reflects an implicit lack of value 
of the body for which that health care is being provided. You 
cannot deny it. And those bodies in this country are 
disproportionately Black and Brown, disproportionately rural. 
Meanwhile, the prices keep rising. Corporations keep making 
money when they do.
    We spend more than $12,000 per capita per year on health 
care, more than twice as much as our counterparts in Canada. 
They live four years longer on average, by the way.
    The pandemic demonstrated that coverage and cost are not 
our only issues. Early on, health care workers struggled 
without ventilators or beds or basic PPE. Twenty-seven million 
Americans lost their employer-sponsored health insurance with 
their jobs. Local and state health departments and the CDC 
struggled under the weight because they were already anemic 
from the disinvestment during the Great Recession. So despite 
the need for more beds, 21 hospitals shut down in 2020 alone. 
That is including 73 over the past decade, 4 in Senator 
Graham's South Carolina alone.
    But guess what industry had a banner year in 2020. The 
health insurance industry. They got to keep all of the money 
that did not get spent on elective procedures, which, by the 
way, is why those hospitals shut down. American life expectancy 
dropped 25 years--actually, it dropped by 3 years, wiping out 
25 years of growth.
    So what did we learn? Even with private insurance coverage, 
it is not durable. It is liable to be lost to you, precarious, 
as we saw in the pandemic. American consumers are losing their 
health care choices through hospital closures and mergers and 
acquisitions, which, by the way, allow large health care 
systems to exploit workers, including nurses and doctors, and 
we are failing to invest in public health.
    Now the genius of Medicare for All is not just that it 
solves coverage and cost. It is that a universal national 
health insurance program for everyone offers a solution for 
each of these problems. Medicare for All is the clearest 
pathway to universal, durable health care insurance, bar none. 
Cradle to grave coverage would do away with the premiums, co 
pays, deductibles that leave even privately insured Americans 
rationing their health care today, just like they do every day 
in America.
    Medicare for All would expand health care choices by 
limiting hospital mergers, acquisitions, and shutdowns that 
threaten those choices and empower mammoth health care systems 
in the process. It would also empower health care workers. And, 
it finally addresses the misincentives that we have to invest 
in prevention and public health.
    So to conclude, opponents of Medicare for All are going to 
tell us all the same fear-mongering arguments we have actually 
already heard today. They are going to say that Medicare for 
All would eliminate health care choices, but really, it is 
critical to preserving the choices Americans actually care 
about, which are the choice of doctor, the choice of clinic, 
the choice of hospital.
    They will say we cannot afford it when American families 
cannot afford the system that we have today.
    What about innovation, they will ask. Well, providers stay 
private under Medicare for All, never mind the fact that our 
Federal Government is the most important funder of biomedical 
research in the world.
    What about rationing, they will say. Well, out-of-pocket 
costs are forcing Americans to ration health care every day in 
the current system.
    They will tell us that Medicare for All is somehow un-
American, but what really is un-American is staring at a broken 
health care system in the face while it is breaking people in 
the process and choosing to look away.
    Today, you are choosing to stare at it in its cruel, 
indifferent face, and I commend you for doing this. And I hope 
that I have offered some insights into how and why it is broken 
and how Medicare for All is the solution to fix it.
    Thank you.
    [The prepared statement of Dr. El-Sayed appears on page 
91.]
    Chairman Sanders. Thank you, Dr. El-Sayed.
    Our next panelist is Ms. Grace-Marie Turner, who is 
President of the Galen Institute, a public policy research 
organization that she founded in 1995 to promote an informed 
debate over free market ideas for health reform. Ms. Turner is 
founder and facilitator of the Health Policy Consensus Group, 
which serves as a forum for analysts for market-oriented think 
tanks around the country.
    Ms. Turner, thanks very much for being with us.

  STATEMENT OF GRACE-MARIE TURNER, PRESIDENT, GALEN INSTITUTE

    Ms. Turner. Thank you, Chairman Sanders, Ranking Member 
Graham, Senators, for the opportunity to testify today.
    Mr. Chairman, I would like to begin by acknowledging my 
respect for your tireless work on universal coverage. While 
there are different views about how to reach that goal, I 
believe there are important values that we share in achieving 
universal coverage, with care that is affordable, protecting 
quality and choice, and especially a strong safety net for the 
vulnerable.
    Americans are frustrated with our current health sector, 
with millions still uninsured. Those with insurance find their 
coverage costs too much, and deductibles can be so high many 
people feel they are not even insured.
    But the more government gets involved, the more providers 
must comply with legislative and regulatory demands instead of 
innovating to respond to the needs of patients, families, and 
employers. Wharton Professor Mark Pauly finds that the Federal 
Government exerts a great influence over our health sector 
today, with government controlled or directed spending totaling 
80 percent.
    In proposing policy solutions, I believe it is important to 
begin by clearly defining the problem. The overwhelming 
majority of Americans today have access to coverage. More than 
30 million people are uninsured, but two-thirds of them are 
eligible for programs that they are not enrolled in, either in 
the private or the public sector. Among the remaining one 
third, most of them are undocumented immigrants, which is an 
immigration problem more than it is a health care problem. 
Uninsured rates continue to be higher among Latinos and Blacks, 
people with incomes below the poverty level, and people in 
states that have not expanded Medicaid. We could work together 
to make sure these 30 million people that are eligible for 
coverage have access to care and coverage.
    Medicare for All would mean that virtually everyone would 
lose the plans they have today in exchange for this one 
government-run health plan, including 173 million Americans who 
have coverage through their employer that they value and 64 
million Americans, on Medicare, seniors, who have paid into the 
Medicare program throughout their working lives to have medical 
coverage when they retire.
    Several states have tried to implement a single-payer plan, 
including the Chairman's home State of Vermont. Colorado took a 
vote on single-payer. And, California most recently shelved 
their single-payer plans. They learned the proposal would 
require the largest tax increase in the State's history of more 
than $12,000 per household annually to meet the $400 billion-
plus annual cost.
    And according to the Kaiser Family Foundation, as the 
Chairman said, two-thirds of Americans say they support a plan 
that would guarantee health coverage for all. But also, as the 
Ranking Member said, that figure drops to 37 percent when 
people learn it will raise taxes and eliminate their private 
health insurance. It drops to 26 percent when people learn they 
can expect delays in receiving treatment.
    As several of our witnesses have said, delayed or denied 
care can in fact cost lives. Sally Pipes, who runs the Pacific 
Research Institute and was born and raised in Canada, said her 
otherwise healthy godson went to Vancouver Emergency Room 
earlier this year with chest pains. Doctors gave him an 
electrocardiogram and a chest X-ray, but not a CT scan. CT 
scans are notoriously difficult to get in Canada because of the 
scarcity of equipment. They sent him home with some pills. The 
next morning, he was found dead in his condominium. The autopsy 
showed a torn aorta which the CT scan would likely have 
detected and which likely could have been repaired.
    Evidence abroad shows that Medicare for All would lead to 
restricted access to new medicines, diagnostics, and 
treatments, fewer innovations in personalized care, and lower 
payment rates. It would force physicians and other providers to 
curtail services or even close their doors. We saw this happen 
just up the street at Providence Hospital. It became too 
reliant on Medicaid funds and, after a century and a half, had 
to close its doors to acute hospital treatment.
    I would like to commend Ranking Member Graham for his hard 
work on proposals to usher in a new era of health reform by 
unleashing the innovation and energy pent up in our health 
sector to solve so many of the problems we are facing. Senator 
Graham has provided ideas and guidance for the work of policy 
experts from 82 organizations that have signed on to the Health 
Care Choices plan. The plan has dozens of recommendations to 
encourage choice and competition, offering more options for 
more affordable coverage, more choices, and better care for 
those who have the greatest health needs.
    Thank you for the opportunity to testify. I look forward to 
your questions.
    [The prepared statement of Ms. Turner appears on page 102.]
    Chairman Sanders. Ms. Turner, thank you very much.
    We have one more panelist, Dr. Blahous, but before we get 
to him I would ask unanimous consent that Senator Merkley to be 
allowed to speak because he has to run to another appointment.
    Senator Merkley.
    Senator Merkley. Thank you very much, Mr. Chairman, and I 
appreciate this conversation so much because our health care 
system is so enormously stressful. There are so many cracks, so 
many different forms of medical care, and people are always 
falling between them.
    Just this last weekend, my son was in the emergency room 
with COVID. He had just turned 26. He is applying for 
continuation of Health Coverage (COBRA), but it takes weeks to 
get that number. And so the first thing he was asked is, where 
is your insurance card, and he handed over his insurance card. 
And he was told: Well, we are sorry. This just expired because 
it is past your birth date.
    And, just constantly, people are stressed out by the 
complexity and the cost of our system.
    I thought I would try to quickly address a few of the 
points that my colleague from South Carolina has made because I 
see it a little differently. He mentioned the southern border, 
and we do see a lot of people on the southern border coming 
from very poor countries where there is a lot of issues and 
they are seeking a better life, but really, the comparison we 
are talking about is between other developed countries and the 
United States.
    So I would ask unanimous consent to submit this chart for 
the record, and I will hold it up for the camera.
[GRAPHIC] [TIFF OMITTED] T7607A.001

    [Full size chart appears on page 189.]
    Senator Merkley. This is the rest of the developed world up 
here, much better health care, much lower cost. Here is the 
United States down here in the corner, much higher cost, much 
lower quality. Well, that is why we are having this 
conversation. The rest of the developed world has figured out 
that you can provide much better health care and much lower 
cost, and that is what Medicare for All is all about.
    Second, my colleague made the point that everyone would 
work for the Federal Government, but this is not a single 
provider proposal. This is a single-payer proposal. That is 
completely different: single-payer proposal, like Medicare, the 
providers are the providers we have today.
    And then my colleague mentioned inflation. But, what is 
worse for America than the inflation we have in the medical 
system? It is massive because there are not competitive forces 
to drive it down.
    And, my colleague mentioned that competition we should 
introduce into the system, but as pointed out by our witness, 
it does not really work in the medical world. And if you want 
competition, you want everything to be in-network because that 
way everyone is competing. Well, how do you get in-network? You 
take Medicare for All. And if you really want competition 
within the existing system and you did not support Medicare for 
All, then you support a public option.
    We have a public option in my home State of Oregon for 
insurance in the workplace. It is called the State Accident 
Insurance Fund. Private business chooses the public option over 
the private option more than half the time, and that 
competition actually drove down the cost a lot.
    Therefore, if you want competition, you do not want the 
current existing system.
    And then our witnesses talked about the inefficiency. I 
think about all the providers who say they spend all their time 
sorting through the many different insurance systems, trying to 
figure out what they can charge. That is a huge waste in our 
system.
    I think about the businesses that say we spend so much time 
wrestling with which new insurance plan to try to keep the cost 
down while still offering insurance through our company. That 
is a huge waste of time and effort.
    And then we heard about medical debt, and we heard about 
underinsurance, and we heard about medical rationing.
    We have enumerable problems in this current system that 
Medicare for All will address.
    And in my one minute remaining, I would like to ask a 
question to our expert on nursing, Bonnie Castillo. My wife is 
a nurse, so I take special interest in this. How will the 
provision of nursing workforce or nursing quality be affected 
by going to a Medicare for All system?
    Ms. Castillo. Thank you. You know, obviously, we have been 
dealing with an industry-created nurse staffing crisis for many 
years. Right now, we have 1.2 million nurses with active 
licenses that are not working, and you know, they--so they are 
not working because many have left because of the poor working 
conditions, and more and more have left in the last two years 
in particular, which is because of everything that they are 
seeing in terms of the denial of care and the fact that they--
as I said before, the atrocious conditions in the hospital.
    And if the nurses are not able to give good quality care 
that they are expertly trained to give, that creates great 
moral distress. And to see so many patients suffering because 
they are suffering from illnesses that with a little bit of 
prevention and early care could have prevented a more acute 
situation for them, that has been very, very difficult.
    So providing Medicare for All, getting early care, 
preventive care, that is going to--that allows us to do what we 
do as nurses, and that is to provide good, comprehensive care.
    Senator Merkley. Thank you and just a huge thank you to all 
the nurses who make the world better one bedside at a time.
    Ms. Castillo. And if I could add, too, just for the record, 
that really, Congress needs to pass mandatory minimum safe 
nurse-to-patient ratios, and they can do that independently 
now.
    Chairman Sanders. Okay. Senator Merkley, thank you.
    Now we are going to get back to regular order, and that is, 
our last panelist is Dr. Charles Blahous, who is with us 
virtually. He is the J. Fish and Lillian F. Smith Chair and 
Senior Research Strategist at the Mercatus Center at George 
Mason University. Dr. Blahous specializes in domestic economic 
policy and retirement security, with an emphasis on Social 
Security as well as Federal fiscal policy.
    Dr. Blahous, thanks very much for being with us.

STATEMENT OF THE HONORABLE CHARLES BLAHOUS, PH.D., J. FISH AND 
LILLIAN F. SMITH CHAIR AND SENIOR RESEARCH STRATEGIST, MERCATUS 
                CENTER, GEORGE MASON UNIVERSITY

    Mr. Blahous. Thank you, Chairman Sanders. Thank you, 
Ranking Member Graham, members of the Committee. I greatly 
appreciate this opportunity to discuss the Federal budget costs 
of Medicare for All.
    Now before I summarize my findings, just a brief caveat. My 
testimony is largely based on analysis that I performed in 
2018. Current proposals differ in key respects from the 
provisions that I studied. So at the end of my statement, I 
will discuss how recent developments might change these 
numbers.
    Now my study found that Medicare for All would add 
somewhere between $32.6 trillion and $38.8 trillion in new 
Federal budget costs over the first 10 years. The $32.6 
trillion scenario essentially assumed that every cost 
containment provision in the bill saved as much as possible. 
If, instead, things played out more consistently with 
historical trends, the added cost would be closer to $38.8 
trillion.
    The study also noted that doubling all currently projected 
Federal individual and corporate income taxes would be 
insufficient to finance even the lower bound estimate of $32.6 
trillion.
    Now the vast majority of these costs arise from the Federal 
Government's assuming responsibility for health spending that 
is now done by others, by state and local governments, by 
private insurance, and by individuals out of pocket. And 
certain aspects of Medicare for All would add to this health 
spending while others would seek to bring costs down.
    The biggest factor increasing health spending would be 
Medicare for All's expansion and increased generosity of health 
insurance coverage. Spending on behalf of the currently 
uninsured would rise, as one would expect and presumably 
intend. Additional benefits would be provided that Medicare 
currently does not, such as dental, vision, and hearing 
services.
    But, most importantly, Medicare for all would provide 
first-dollar coverage of Americans' health expenses, meaning 
with only a few exceptions no patient cost sharing. Now this 
would increase the demand for health services because the more 
of people's health care that is financed by their insurance, 
the more they tend to consume. So under Medicare for All, the 
Federal Government would assume responsibility for financing 
health care services above and beyond current demand.
    Now other provisions of Medicare for All are intended to 
reduce costs. My study assumed substantial administrative cost 
savings and bracketed a range of possible outcomes of 
provisions intended to lower drug prices.
    The big variable here is payment rates for health care 
providers. Current bills envision that payments would be set 
through processes similar to Medicare's, and Medicare pays 
providers much less than private insurance does. If Medicare 
for All paid providers at Medicare rates, payments for services 
now covered by private insurance would be sharply cut, by more 
than 40 percent for inpatient hospital care, more than 30 
percent for doctors' services and so forth.
    Now such payment rates would be substantially below 
providers' reported costs of providing services. So for this 
and other reasons, several studies assume Medicare for All must 
adopt higher payment rates than current Medicare does, and 
this, of course, leads to higher Federal cost estimates and 
findings that Medicare for All would further increase national 
health spending.
    Now since my study was published, more recent proposals 
have generally included additional benefits I did not estimate, 
such as long-term services and supports, and that pushes costs 
up.
    But other developments would lower the projected costs. 
Baseline projections for national health expenditures have gone 
down a little bit. Also, the so-called Cadillac plan tax was 
repealed, and other health-related taxes have been repealed. 
And this increases net Federal health subsidies under current 
law and thus reduces the additional costs posed by Medicare for 
All.
    CBO has also found that many services would continue to be 
financed outside of a Medicare for All system. When you account 
for this, that further lowers the Federal cost estimate, but of 
course, it does not lower national health spending.
    Perhaps most importantly, CBO found that much of the new 
demand for health care under Medicare for All would simply go 
unmet. Now this also lowers projected costs, but obviously, it 
is bad news for patients who would be denied care.
    It is reasonable to guess that a re-estimate of my 
realistic payment scenario might drop its 10-year cost from 
roughly $39 trillion to about $31 trillion. Now this would 
still be more than we could finance by doubling all projected 
income taxes, and it would still mean a net increase in 
national health costs.
    One last important point: CBO projects lower administrative 
costs than mine and most other studies do. For example, they 
project that 80 percent of nurses' current administrative tasks 
would be eliminated by Medicare for All and that all the time 
saved would be reallocated to providing care.
    Now the implications of these assumptions are very 
significant. If we were a little bit less optimistic about the 
administrative time saved, we would see a much bigger problem 
with denial of care. For example, if Medicare for All reduced 
nurses' administrative tasks by 40 percent, which is still 
quite optimistic, then if we paid providers at Medicare rates, 
nearly all of the new demand for hospital and physician 
services under Medicare for All, 97 percent of it, would go 
unmet.
    Now lawmakers would be very unlikely to tolerate that 
outcome and would probably address it by paying providers more. 
So that is an additional reason why the actual costs of 
Medicare for All would probably be much higher than in these 
various studies' lower-cost projection scenarios.
    I hope this information is useful. I thank the Committee 
again for the opportunity to discuss these important 
implications of Medicare for All.
    [The prepared statement of Mr. Blahous appears on page 
131.]
    Chairman Sanders. Dr. Blahous, thanks very much for your 
testimony.
    Okay. I think we begin the questions right now. Let me 
start off with one very simple question and kind of a ``yes'' 
or ``no'' answer maybe for all of our panelists. Is health care 
a human right to which all Americans are entitled regardless of 
their income, Dr. Gaffney.
    Dr. Gaffney. It absolutely could be.
    Chairman Sanders. Ms. Castillo.
    Ms. Castillo. Yes.
    Chairman Sanders. Dr. El-Sayed.
    Dr. El-Sayed. Yes, sir.
    Chairman Sanders. Ms. Turner.
    Ms. Turner. Yes, sir, but also the people who are providing 
that care have an equal right to compensation.
    Chairman Sanders. Dr. Blahous.
    Mr. Blahous. I believe everyone is entitled to receive 
care. It is a necessity.
    Chairman Sanders. Okay. Thank you. Let me start off with a 
question for Dr. Gaffney. During the pandemic, we saw the 
absurdity of tying health care to employer-based coverage. Some 
27 million people lost their jobs, and when they lost their 
jobs they lost their health care. In your view, should health 
care be something that all people are entitled to because they 
are human beings or should it be, in most cases, attached to 
their employment?
    And when it is attached to their employment, it may well 
be: I have a good job, and I have great health care coverage. 
He does not have a good job; his coverage is minimal.
    Is that system making sense to you as a physician?
    Dr. Gaffney. Well, it does not make sense either medically 
or financially. For one thing, you constantly hear the critique 
of Medicare for All that it would take away people's private 
health insurance. As you said, people are losing private health 
insurance all the time because they got fired, they got laid 
off, they turned 65 and gained access to Medicare. So it does 
not make sense.
    Furthermore, that sort of churn, as we call it, the 
constant shifting in and out of medical plans, health care 
plans, has really adverse consequences for patient care. You 
can imagine if you have complex medical needs, having to see a 
number of doctors, having to go to particular hospitals. All of 
a sudden, your health care plan changes. Now you need to see 
all new professionals, assuming you still have a new plan. You 
may be entirely uninsured and unable to see anyone at all.
    So it does not make sense, no.
    Chairman Sanders. All right. Let me to go to Ms. Castillo. 
If we had already adopted Medicare for All before the pandemic, 
how would things have been different for front-line nurses and 
their patients? Would our hospitals have been better prepared 
to protect patients and employees?
    Ms. Castillo. You know, if--and actually just to relate to 
the previous questions, imagine, you know, all those folks that 
lost their jobs in the midst of a deadly pandemic. So if we had 
Medicare for All before this pandemic started, hospitals would 
have been better prepared to respond. There would have been a 
system in place.
    For years, hospital corporations have used and relied on 
this just-in-time-staffing and for supplies. And in most of the 
country, hospitals did not even hire enough nurses for regular 
patient care, day to day, and that is pre-pandemic. Or, they 
did not have enough supplies for a public health emergency.
    Through the global budgeting payment mechanism that is in 
your bill, Senator, hospitals would be required to have the 
minimum--safe minimum nurse staffing levels, and they would be 
required to have a one-year supply of the critical PPE and all 
the other medical supplies that were needed. So this--our 
pandemic response would have been much safer for patients and 
for health care workers if we had a Medicare for All system.
    Chairman Sanders. Thank you. Dr. El-Sayed, my conservative 
friends are supposed to worry about how much money we spend, 
right? That is what being a conservative is about. And I share 
some of that. You know, I do not like to spend money. I was 
kind of a cheapskate mayor and try to continue to do that.
    So I just do not understand why my Republican friends are 
not jumping up and down and saying, Bernie, we are with you. It 
is a little bit crazy that we are spending twice as much per 
capita on health care as the people of other nations.
    And we can argue. You know, I hear, we all hear the scare 
tactics from Canada or U.K. and so forth, but I would remind my 
Republican friends that conservative governments have been in 
power in Canada, in the U.K., here in the U.K. right now, and 
they would not for a second try to get rid of their national 
health care system because it is so popular.
    But my question, Dr. El-Sayed, is tell us why is it in fact 
that we are spending over $12,000 a year on health care, twice 
as much as our Canadian friends, the French, British, countries 
all over the world, while we live shorter lives and in many 
cases our health care outcomes are not as good? How does that 
happen?
    Dr. El-Sayed. Well, we talked a little bit about the tomato 
scenario and the fact that, you know, in our system nobody has 
an incentive to save money. If you are a provider, your 
incentive is to bill more because you make more. And if you are 
an insurer, your incentive is to grow your piece of the pie, 
that 20 percent that you get to keep, so you have no incentive 
to keep it down either. And they keep pushing the bill back 
onto the rest of us.
    But because we have so many payers and so many providers, 
700 health insurers in our society----
    Chairman Sanders. How many health insurance companies?
    Dr. El-Sayed. Right around 700.
    Chairman Sanders. Okay.
    Dr. El-Sayed. No one of them has the power to actually rein 
down the prices even if they wanted to. And on top of that, you 
have to have a whole bunch of crosstalk, a whole bunch of 
billers, whether it is on the provider side or the payer side, 
to be able to make these financial transactions happen. That is 
overhead in the system that the public pays for.
    Chairman Sanders. All right. Let me ask you this. Does 
anybody have any idea--we have talked about not having enough 
doctors and nurses, et cetera. How many people do we have in 
the system who do nothing else but bill us and drive us crazy 
that we are late on our bills? Does anyone know that number?
    Dr. El-Sayed. I do not know if Adam has an estimate.
    Chairman Sanders. Do you know, Dr. Gaffney?
    Dr. Gaffney. I do not have the personnel number, but I do 
have the overall expenditures of what we spend on 
administration, and that is one-third of every health care 
dollar in the United States to administration, double the 
proportion of Canada.
    Chairman Sanders. So we are spending hundreds of billions 
of dollars on folks who bill us and drive us crazy but do not 
provide any health care to us.
    Dr. El-Sayed. That is right.
    Chairman Sanders. Dr. El-Sayed
    Dr. El-Sayed. And so that is one piece of the deep 
inefficiency in our system.
    The other piece is that we just do not invest in the means 
of prevention almost at all. I told you one of my jobs was to 
rebuild a health department in America's poorest city. We have 
fundamentally disinvested in the means of keeping people 
healthy over the long term, the kinds of things that save money 
over the long term, in large part because nobody has an 
incentive to do that. Our system is predicated on a financial 
transaction after someone gets sick. So if you think about the 
political economy of it, there is very little incentive to 
prevent at all.
    Chairman Sanders. In terms of cost savings--and I say this 
to my conservative friends because I know that they are worried 
about expenditures--if we lower the cost of prescription drugs 
in this country to what other countries pay, anyone have any 
idea how much savings there would be in our system? Dr. 
Gaffney.
    Dr. Gaffney. I mean, the CBO estimate was about a 30 
percent reduction in drug prices. Other countries pay probably 
on average about half as much. You are talking about more than 
a hundred billion dollars, yeah.
    Chairman Sanders. Okay. Senator Graham.
    Senator Graham. One, I thoroughly enjoy the Committee. I 
really do.
    Now to my--can I call my liberal friend, socialist friend? 
What would you like to be called?
    Chairman Sanders. Let us call us friends.
    Senator Graham. Okay, a friend. You can call me 
conservative, and I will not object. So to my friend from 
Vermont, you are right; we can lower costs and improve quality. 
The question is: How? Do you agree with that, Ms. Turner.
    Ms. Turner. Absolutely.
    Senator Graham. Okay. How do you get innovation in a 
system, Dr. El-Sayed? Did I say that right? I am sorry.
    Dr. El-Sayed. El-Sayed.
    Senator Graham. Yeah, count me in for innovation. Count me 
in for lowering costs. Count me in for improving quality. Makes 
all the sense in the world.
    But let us talk about tomatoes. Who grows tomatoes in 
America? Anybody an expert on tomatoes? The government does not 
grow tomatoes. Tomatoes are grown by the private sector, and 
there is competition in the marketplace to grow tomatoes, and 
we do not do collective farming. And the last thing you want in 
the tomato world is to have the government take over the 
production of tomatoes and go to the Soviet-style collective 
farming where everybody eventually starves.
    So let us keep tomatoes the way they are, and let us 
improve health care.
    So the bottom line is I am looking for a system that will 
lower costs, improve quality, and I am begging you to have a 
vote on your bill. I am begging you. I am encouraging you. I am 
asking President Biden, in case you are watching, please call 
Senator Schumer and insist that we have a vote on Medicare for 
All on the floor of the United States Senate as soon as 
possible.
    And we will not because Democratic colleagues know that it 
would go over like a lead balloon with the American public. 
Maybe I am wrong. Maybe you would win the day. But we are not 
going to fix this problem until we start voting on solutions 
and alternatives.
    Dr. Blahous, is that right?
    Mr. Blahous. Yes.
    Senator Graham. If every hospital in America went to 
Medicare reimbursement rates for their primary--their only 
source of payment, how many hospitals would close?
    Mr. Blahous. Well, it is hard to say how many would close. 
The CMS Medicare actuaries have said that the vast majority of 
hospitals operate at a negative margin for their Medicare 
patients, their Medicare treatments.
    Senator Graham. So they make it up through the private pay 
system. Is that correct?
    Mr. Blahous. That is correct. And they put out a projection 
a couple of years ago saying that, you know, roughly 80 percent 
of facilities would be plunged into negative margins within a 
few years if all of their reimbursements were at Medicare 
rates.
    Senator Graham. Ms. Turner, what is your view of that? What 
if in America, all of a sudden, everybody in the hospital arena 
were reimbursed at Medicare payments, at the current rate, and 
that was it?
    Ms. Turner. Well, that is a good question to ask the 
Director of the Congressional Budget Office because the CBO has 
basically said that a great majority of physician practices and 
hospitals and clinics would simply not be able to keep their 
doors open. The private sector, employer-based health insurance 
in particular----
    Senator Graham. If you spent 15 minutes talking to the 
people in South Carolina in rural areas, their biggest 
nightmare is to be locked in at Medicare and Medicaid rates 
because they would have to close because you just cannot pay 
the costs. And if you start mandating patient-to-nurse ratios, 
that would increase your costs. So a lot of hospitals would go 
out of business. There has got to be a better way.
    So the idea of having the government as the only source of 
revenue is, I think, a bad idea because you are no better than 
the government will allow you to be, and you would have to 
increase Medicare and Medicaid reimbursement rates or you would 
shut down a large number of hospitals in this country because 
they literally cannot operate without a private pay function.
    Let me ask this question. Do you all agree that under 
Medicare for All private health insurance options go away for 
the American people? Everybody is nodding. Okay. I just want to 
get that baseline. The question: Is that a good idea or a bad 
idea?
    So what I would like to do, Mr. Chairman, is vote on your 
proposal. That is--I like the Committee. We talk a lot. We do 
not vote on much of anything. Let us take your idea and vote on 
it because if we did that I think you would find out that 
Medicare for All would be the equivalent of collective farming 
over time, and I do not want to go down that road.
    I would like to do more private sector involvement in 
health care, not less. I would like to have more competition, 
not less. I would like to get more innovation, not less.
    And I can tell you one thing. The more you consolidate 
power in the health care arena under the government umbrella, 
you are going to get less of innovation, you are going to get 
more on costs, and you are going to get less in quality. You 
just have to wait longer. You have to ration care because 
eventually you break the budget to the point it cannot be 
repaired.
    Medicare is in a very tenuous situation. Let us focus on 
saving Medicare as we have it today, and let us find ways to 
talk with each other about lowering that cost from $12,000 per 
patient to something lower and see if you can have an open mind 
to some of my ideas, and maybe I will have an open mind to some 
of your ideas. Might be able to fix this thing over time.
    But let us start with this idea. We should be voting on 
this. We should not be talking about it any longer. Let us 
vote.
    Chairman Sanders. Well, if I could just briefly respond, 
before I give the mic to Senator Padilla, about voting.
    Senator Graham. Can I say one thing I forgot? Unanimous 
consent to submit letters and an op-ed to the record from 
FreedomWorks and Council for Citizens Against Government Waste, 
Americans for Prosperity, Americans for Tax Reform, and the 
Cato Institute, as well as an article from the Washington Post.
    Chairman Sanders. Without objection.
    Senator Graham. Thank you, Mr. Chairman.
    [The submitted materials begin on page 167.]
    Chairman Sanders. Senator Graham, you may or may not know 
that I have been one of the major proponents in the Senate to 
have more votes. I like votes. I think it brings forth debate. 
But I think while we are at it, in addition----
    Senator Graham. You are the Chairman.
    Chairman Sanders. I am the Chairman of this Committee but 
not the Majority Leader. I think we should vote on whether we 
continue massive tax breaks for billionaires so that Jeff Bezos 
in a given year does not pay a nickel in taxes. I think we 
should vote on whether we end Citizens United so that 
billionaires are not able to buy elections as they are doing it 
right now as we speak. I think we should vote on whether or not 
Medicare should negotiate prescription drug prices so that we 
can lower the cost of prescription drugs in this country by 
half and a lot of other issues. You are talking to the wrong 
guy here. I like the idea of votes.
    Senator Graham. With all due respect, Mr. Chairman, you are 
the Chairman of the Committee. This is about Medicare for All. 
If you want to vote on all those things, fine. Let us start 
with your idea.
    Chairman Sanders. Let us vote on all of them. Good.
    Senator Graham. Well, let us start with Medicare for All. 
Have a vote next week.
    Chairman Sanders. All right. Okay, Senator Padilla.
    Senator Padilla. Thank you, Mr. Chairman, and I want to 
thank--I want to start by thanking you for your leadership on 
this issue and for holding this hearing. I am proud to support 
Medicare for All and look forward to working with you to move 
this forward.
    And I also want to personally thank and recognize our 
front-line heroes. I see all these scrubs in the audience, and 
that always puts a smile on my face because I know that you all 
have been on the front lines in the more than two-year fight 
against COVID-19.
    I also want to say that we have this terminology that came 
out of the COVID-19 pandemic: essential workers. Let us be 
clear. Your work was essential long before the pandemic but 
especially during the pandemic.
    We have a few heroes today and some great witnesses, 
including one that happens to be a California nurse and my 
personal friend, Bonnie Castillo. Thank you for being here.
    Now Ms. Castillo is Executive Director of the National 
Nurses United and a fierce advocate for equal health care for 
all, and I am proud that she is here representing California as 
well as the workforce.
    As we have all seen, the COVID-19 pandemic has put a 
spotlight on what many people of color already knew, and that 
is the fact that the current health care system does not treat 
everyone equally. For far too long, communities of color, 
patients of color have faced discrimination in our health care 
system. And we can debate whether it is intentional or 
unintentional, but the facts and the data are clear. And that 
is one of the reasons why I believe Medicare for All is so 
important: because it will level the playing field for 
communities of color.
    It is simply a fact that many communities of color living 
in the United States have less access to health care, have 
worse health outcomes, and are less insured than other 
communities, but a significant equalizer has been Medicare. 
Research has shown that there are substantial reductions in 
racial disparities and access to care and self-reported health 
when people reach 65. Now this is striking and should be kept 
top of mind when we consider this bill. Health care should not 
be determined by your ZIP Code, and no one should go bankrupt 
because they cannot afford growing medical expenses.
    So I share your conviction, Mr. Chairman. It is frankly 
unacceptable that as the wealthiest nation in the world we do 
not guarantee health care for all. Health care is a human 
right. I am looking forward to taking action here.
    Now turning to my questions in the couple minutes I have 
left, the first is to Ms. Castillo. You know, cost is often 
cited as a reason to oppose Medicare for All for those who do 
not believe yet. Yet. But the real question I have is: Cost for 
whom?
    Now I have heard story after story from families across 
California about how a single illness can be financially 
crippling for an individual or a family. Families often go into 
massive debt or even bankruptcy to cover a loved one's health 
care costs, but it does not have to be this way.
    Health care should not be something only the wealthy can 
afford. No one should go into debt because of rising health 
care costs or an illness. One example that we are legislating 
separately, no one should have to ration their insulin or put 
off critical surgeries because of the price tag.
    So with that as the backdrop, Ms. Castillo, as one of the 
leaders of the largest health care worker unions in the nation, 
how would Medicare for All help alleviate the racial and income 
disparities that you see on the ground?
    Ms. Castillo. Well, thank you and thank you for your 
leadership, Senator Padilla.
    You know, for us as registered nurses, I think, you know, 
the key words are early, access, prevention, detection, and 
treatment, and that means removing those barriers. And those 
barriers are prohibitive, as it has been mentioned for the 30 
million uninsured, but for the underinsured that cannot afford 
to use their insurance, not to mention all those who have lost 
their jobs and lost their insurance. Insurance does not equal 
care, and people need to be able to access that care.
    And the care--and we on this panel--I mean, we have the 
expertise and the education to provide that care. That is what 
we--that is our job, and we do our job every day. You know, 
during the pandemic we did not run away from the disaster. We 
ran to it.
    But we need the tools, and we need to remove the barriers 
to care for everyone. You know, COVID does not respect any kind 
of barrier to care. If it infects one of us, it can infect all 
of us. And so as providers, we need to--it is important that we 
address these.
    I will also just--I would like to comment on, you know, for 
instance, hospitals are closing all the time. We, as a union, 
fight hospital closures because--and they are deciding to close 
because it is simply not profitable to operate a hospital in 
the lower-income communities, specifically communities of 
color, rural communities. And so if we have the global 
budgeting, where budgeting was based on need, human need, then 
we would be able to work to decrease those disparities that 
exist.
    Senator Padilla. Thank you. And, Mr. Chairman, I know my 
five minutes are up, but if I can, just one quick question. I 
promise to be brief.
    The COVID-19 pandemic has also put enormous stress on the 
mental health of the American people. Cases of mental illness 
and substance abuse disorder have sharply risen during the 
pandemic, and more people are seeking care. Often cost and 
stigma pose barriers for people seeking mental health 
treatment. That just should not be the case.
    Medicare for All, I believe, can also help level the 
playing field for those suffering from mental illness, not just 
physical illness. Dr. El-Sayed, how can Medicare for All help 
those suffering from mental illness and substance abuse 
disorder?
    Dr. El-Sayed. Yeah, Senator Padilla, I really appreciate 
the question. We are suffering a second pandemic of mental 
illness in this country, and unfortunately, our health care 
system has done this thing where we basically decapitate the 
head from the body. We say if it is in the head, whether it is 
mental health or it is dental health or it is vision or 
hearing, then we are going to pay for it separately. And one of 
the best pieces of Medicare for All and the Chairman's bill is 
that it reminds us that making Medicare whole is really the 
first step to extending Medicare for everybody. Covering these 
critical needs is critically important.
    The second point here is that because we have such a 
different system of reimbursement for mental health we 
systematically lag in terms of capacity. My own spouse is a 
mental health provider. She is a psychiatrist, and every day 
she talks about caring for students who would not have care 
except for that they happen to be students at the university 
and get it through their university.
    And so putting the head back on the body of health care and 
making health care whole through Medicare for All, ending the 
differentiation between the head and the body, I think, is 
critical, and Medicare for All would do just that.
    Senator Padilla. Thank you. Thank you, Mr. Chairman.
    Chairman Sanders. Senator Johnson and Senator Padilla, 
would you mind chairing while I run down and vote?
    Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman. You are going to 
miss some good stuff here.
    The first step in solving any problem is admitting you have 
one, and we all admit we have one, right? Then you have to 
promptly diagnose this, and I think that is where things break 
down pretty quick.
    Seems like the Chairman says it is all about profitability 
of the industry, and he rattled off a bunch of numbers that 
totaled up $117 billion. Dr. Gaffney, you talked about lowering 
drug costs, $100 billion. We spend over $4,000 billion a year 
in health care.
    Even if you get after-tax profitability of 10 percent, 
which I think is probably high if you take a look at the entire 
industry, that would be about $400 billion, and you would still 
end up with over $11,000 per person. So the profits, yeah, if 
you squeeze out all profitability, you could lower health care 
costs but not that substantially.
    What astounds me is the people that promote Medicare for 
All, the faith in government you have. I mean, let us face it. 
The pandemic has exposed an awful lot. Our response to the 
pandemic was largely driven by government agencies. Agencies, I 
would say, have been corrupted and captured by big pharma.
    You know, there is not one therapy, there is not one 
vaccine that is generic that has been recommended. Everything 
is either the novel, patentable drugs, starting at about 500 
bucks for PAXLOVID, $700 for molnupiravir, $3,500 for 
remdesivir. Okay? But this cornucopia of widely available 
generic drugs was ignored.
    And how many times have we talked about early treatment? 
Get in there early. And yet, National Institutes of Health 
(NIH) guidelines today: Get tested and do nothing. Go home, 
afraid.
    We not only ignored our agencies, the government not only 
ignored early treatment, they sabotaged it.
    And I do not see how anybody can take a look at our 
response to--the government response to this pandemic--a 
million people dead, the human toll and the economic 
devastation of these ill-advised, widespread shutdowns, 
shutdowns that did not work, what we have done to our children, 
how anybody could say that was a success. It has been a 
miserable failure.
    So why in the world would anybody want to put government 
more in charge of health care?
    Let us properly diagnose the problem by just looking at 
history. Okay? 1940: 80 cents of every dollar was paid for by 
the consumer. We had consumerism in health care.
    What has happened since then is now you got government 
paying for 55 percent, insurance paying for 35 percent, and the 
consumer only pays for a dime out of every dollar spent in 
health care.
    Now I come from the private sector. I would have loved to 
have been a monopolist, but because I was not my prices were a 
lot lower, my quality was a lot higher, as was my customer 
service. That is what the free market provides: the lowest 
possible cost, the best possible level of quality and customer 
service.
    We need to introduce consumerism. We have got to 
reintroduce the discipline of a free marketplace. Having 
government take it over will not do that.
    Ms. Turner, I want to ask a question. One of the reasons 
people do like Medicare is because it is heavily subsidized, 
not just by government payments but by the private sector, 
correct? The cost sharing makes our hospital systems actually 
work because oftentimes, certainly with Medicaid and Medicare, 
they are not reimbursed even for their costs. So talk about 
that cost sharing and how that would all go away and all of a 
sudden government care for all would not look that pretty.
    Ms. Turner. Private health coverage, primarily through 
employers but also through private plans, pay higher rates in 
order to get hospital and, physician care for their members, 
and those higher payment rates are what allow hospitals and 
physician practices to actually keep their doors open.
    I had a physician friend in Florida who said that he wanted 
to take Medicaid patients, and he did, and he had a patient 
needing treatment for complicated lung problems. He said, 
ordinarily, private health insurance would pay him $750 for 
this course of care. When he got his check from Medicaid, the 
check was for 6 cents. He said, ``How many Medicaid patients 
can I afford to see when I get those kinds of reimbursement 
levels?''
    Senator Johnson. I think another issue is, as I have talked 
to hospitals and people coming in during the pandemic, and now 
that those rules that were suspended--you know, things like 
telemedicine, which makes sense, that is a market-driven 
innovation, right? All of a sudden, you will not be able to 
practice telemedicine.
    So all the innovations that we were able to implement 
during the pandemic to relieve the health care system of the 
bureaucratic rules--I mean, again, those of you pushing 
Medicare for All, what makes you think there will be lower 
bureaucracy with government-run health care? There will be 
greater bureaucracy, greater rules, more regulations, less 
innovation, and higher costs. Would you agree with that, Ms. 
Turner?
    Ms. Turner. And less, even less, transparency. I agree with 
Dr. El-Sayed that we need to have much more transparency. Four 
trillion--400,000 billion dollars--are sloshing through our 
health care system, and so few people feel they have any 
control over that spending and that they can make their own 
decisions about how to get the best care at the lowest prices 
from quality providers. That is what we all need.
    Senator Johnson. I have 37 oversight letters into the 
agencies, covering a wide range of subjects in terms of this 
mismanagement of the pandemic. I have gotten almost zero 
responses because the health agencies have not been honest; 
they have not been transparent.
    And so, again, to think government is going to be more 
transparent and is going to be more efficient, that health care 
is going to--you know, all of a sudden, everything is going to 
be coming up roses I think is complete misdiagnosis of what a 
possible solution might be.
    Thank you, Mr. Chairman.
    Senator Padilla [presiding]. Thank you.
    Senator Scott.
    Senator Scott. I want to thank everybody for being here 
today.
    You know, I grew up in a country where a kid like me 
growing up in public housing, born to a single mom, could go 
out and try anything because it was a capitalist system that 
created opportunities for us. We had to get a good education. 
You had to work hard. I mean, I started working at seven. My 
family, we all worked hard, and we were able to achieve the 
dream.
    Right now, if you are--look at what is going on in this 
country right now. Let us look at where the economy is right 
now. Today, PPI numbers came out, 11 percent. The inflation 
number is up, over 8 percent. I look at our GDP; it is 
negative. Think about it. In the United States of America, you 
cannot get baby formula if you are a young mom. I have talked 
to young moms that had to drive around all weekend last week 
trying to get baby formula for their kids. So we have a supply 
chain crisis. We got interest rates going up. We got the stock 
market going down.
    So the socialist agenda that the Democrats are pushing, it 
is not working. You cannot spend money you do not have. We have 
$30 trillion in debt. Medicare is going bankrupt. Social 
Security is going bankrupt. We are not prefunding any programs 
in this country. There was a bill that got passed that put 
Medicare actually in a worse position. We removed retiree 
benefits from the Postal Service to Medicare when we know 
Medicare is not funded.
    So now we are talking about Medicare for All, which I think 
it ought to be called Medicare for None. The bill that we are 
talking about today will abolish the current Medicare--well, 
here is what we are talking about. Abolish the current Medicare 
program and make private insurance illegal. Think about that. 
The goal is to make private insurance illegal.
    They do not want to wildly expand government. They want to 
make it illegal to have your private health insurance. We ought 
to just all read the bill and understand exactly what is 
happening.
    So the horrible proposal will ruin the Medicare program 
because right now, as we know, it is not funded, right, and we 
are running trillion-plus-dollar deficits. The Biden agenda 
takes our debt to $45 trillion. Tell me how we are going to pay 
the interest expense on what we already have.
    It is going to throw 150 million--150 million--people off 
the private insurance program. Over 24 million people have 
Medicare Advantage programs, which they like because they get 
additional benefits. That is gone.
    According to independent estimates, it will cost upwards of 
$30 trillion over the next 10 years. I do not know where the 
money is coming from.
    So, one, it makes private insurance illegal. It lets 
government decide what procedures you get, when, and when you 
get to have them, which ones are covered, which ones you get to 
have. You want the government to make these choices for you.
    It pays doctors less, health care workers significantly 
less. We already have a worker shortage. You pay people less. 
Guess what? You are going to get fewer of them.
    If you care about health care for this country, it does not 
make any sense at all.
    So, Ms. Turner, advocates of Medicare for All keep using 
U.K. and Canada as examples of great socialized health care. 
Can you talk about the problems of wait times in the U.K. or 
Canada and how it impacts, you know, how it impacts somebody's 
individual health?
    Ms. Turner. Well, and as you say, because of a resource 
shortage, they do; people wind up with long waiting times. The 
Fraser Institute in Canada has been studying wait times for 30 
years. When they started, the average wait time from seeing a 
practitioner to getting referred to a specialist and getting 
your treatment was about nine weeks. It is now 26 weeks, half a 
year, and in some areas it is a year.
    In the U.K., the U.K. has so many people on waiting lists 
for care that the U.K. Health Secretary says if you spend more 
than 18 months on the waiting list then you can go to a private 
payer in order to get care.
    But it is not just there. Any place where you see resource 
constraints--and that is absolutely what will have to happen 
with this, with a government-run health care system. In 
California, health officials just announced that fines for $55 
million--Mr. Padilla's home State. The Los Angeles County 
Government. For low-income residents' treatment plan, they 
found that people were having to wait an average of 90 days, 
which is 6 times longer than the 15-day limit.
    So it happens anywhere that you have global budgets and 
resource constraints and are not able to pay enough people and 
not have enough facilities to provide the care. Universal 
coverage does not mean universal care.
    Senator Scott. Oh, you get it. So take the U.K. If you are 
rich, do you have to go through the U.K. system? No. There is a 
separate system for the rich. They can go to private hospitals.
    So if you are poor, you have to wait, if you get the care 
in time to stay alive. But if you are rich, you can either go 
to the U.K. or you can actually come to the United States, 
which like a lot of Canadians come to the United States.
    So I mean, what this will do is if you want care for 
everybody, this will mean you will get care, way less care, for 
people and you will wait longer for your care.
    Thank you.
    Senator Padilla. Thank you, Senator Scott. Welcome back, 
Chairman Sanders.
    Chairman Sanders [presiding]. My apologies for having to 
run. It is kind of a party line vote and it is a 50/50 Senate 
so every vote matters.
    Let me just take the opportunity to ask a couple more 
questions.
    Under an employer-based health care system, does anybody 
have a guess as to how many people are staying at their jobs 
today not because they enjoy their jobs or feel productive in 
their jobs, but because they see work right now as the only way 
they can get decent health care coverage? Any thoughts on that? 
I see some hands in the audience. Dr. El-Sayed, is that 
something you have thought about?
    Dr. El-Sayed. Absolutely something I have thought about. It 
is hard to get an estimate of that, simply because job markets 
are in such flux and people's preferences are complex.
    Although, I think about the impact--and, frankly, the CBO 
has thought about these things, too--the impact on the economy. 
Our Republican colleagues love to talk about what is good for 
the economy. You think about the impact on the economy, all the 
businesses that go unbuilt, all of the new careers that go 
unestablished because people are worried about what might 
happen if they leave their job and lose their health insurance.
    On top of that, small businesses, almost every single small 
business owner you talk to, and you ask them what are their 
biggest challenges? They will rate, according to survey after 
survey, health insurance for their employees as one of the 
worst.
    And so it is hard to pitch a counterfactual in terms of 
numbers, but it is important for us to ask what would be the 
effect if you did not have to worry about that, doing that 
entrepreneurial thing, that thing that America is supposed to 
be known for, that that would mean you and your family losing 
the health insurance in the process.
    Chairman Sanders. Anybody else want to respond to that? Ms. 
Turner?
    Ms. Turner. Senator, employers try so hard and they get so 
beat up on because they really are trying hard to find good 
health insurance that is as affordable as possible for their 
employees. And actually, a study by the Heritage Foundation 
found that 5.7 million more people had coverage in December of 
2020, a year into the pandemic, than did in 2019. So employers 
tried very hard to keep their employees on the payroll as much 
as they could.
    Many people also enrolled in coverage through the 
Affordable Care Act (ACA). So there are safety nets.
    Chairman Sanders. No, I do not think that it is a question 
of beating--nobody here, I do not think, is beating up on small 
business. I think the point that Dr. El-Sayed was making--and I 
remember this, as being a mayor. We had the same problem as any 
small business. We had to search for the best, most cost-
effective health insurance. We spent an enormous amount of time 
and money trying to figure it out.
    And what I think is not well known is what Medicare For All 
will do is take that burden off of small business because all 
of their employees will have quality health care and they can 
maybe go about their business of doing what they do, rather 
than spending so much time and energy on worrying about having 
to get affordable health care.
    Dr. El-Sayed. If I may, Mr. Chairman, far from beating up 
on small business owners, the question I keep asking is what 
would make it easier to be a small business owner? And I think 
taking off the mental space that goes into asking how do I make 
sure that my employees are covered today, would make it far 
easier to focus on whatever the business is.
    But it is not just small business. It is also big business. 
I am from Metro Detroit where, during the Great Recession, the 
automotive bailout was the single most important question on 
everybody's mind. And one of the big questions was how do we 
pay for private health insurance not just for employees but for 
retirees at GM? And what ended up happening is a number of the 
jobs that would have stayed in the United States actually got 
off-shored to Canada because folks could get their health 
insurance paid for. It was not a line item off the top of every 
employee that you had to employ.
    So these questions are dogging businesses, whether large or 
small, in this country. And if we are serious about investing 
in our economy, taking the overhead of having to think about 
health care for every single employee you have off the top of 
business decisions, I think would be pro-growth and pro-
economic empowerment in this country.
    Chairman Sanders. Let me ask another question.
    We do not talk about, you know, generally speaking, the 
more important the issue is, the less we talk about it. In our 
Nation, our life expectancy is shorter than most other 
industrialized countries. But even within our Nation, there is 
a huge disparity in life expectancy.
    I read an article somewhere that in Southern West Virginia, 
which is five hours away by car from Fairfax, Virginia. 
Southern West Virginia very poor, Fairfax rather wealthy. Life 
expectancy for males I think was something like 15 years 
different. And right here in Washington, D.C., depending on 
which part of the city you live in, the life expectancy will be 
significant.
    Why is that? Some thoughts? Dr. Gaffney?
    Dr. Gaffney. Well, obviously health is more than a 
reflection of medical care alone. And I think that speaks to 
the gross inequality in our society that affects people in 
terms of their housing, in terms of their exposure to COVID-19, 
for that matter, in terms of occupational safety, in terms of 
exposure to pollution.
    But I do think medical care matters. It matters a great 
deal in these inequalities. And we know that because 
researchers--you can look at life expectancy but you can also 
look at something called treatable mortality, which is deaths 
that we think are preventable through medical care.
    And if you compare, for instance, a country like Canada to 
the United States in its treatable mortality, we have about 50% 
higher treatable mortality than Canada.
    So the fact of the matter is that we need to fix a lot in 
our society to rectify the kinds of gross inequalities you are 
describing. But a big part of that is fixing our medical care 
system to make it accessible, to make it universal, and to make 
sure that people can have access to the best care regardless of 
their race, ethnicity, or income.
    Dr. El-Sayed. If I can build on what Dr. Gaffney shared, if 
you think about the way we calculate life expectancy, you think 
about the contribution of every life, on average. The lives 
that contribute the most to reducing our life expectancy are 
the lives that are lost the earliest. Those are the babies that 
pass. And you think about keeping a baby alive, that is a real 
complex question because you are talking about two lives. You 
are talking about the life of the person that bore that baby 
and you are talking about the life of that baby theirselves.
    I was health director in the City of Detroit. We had one of 
the highest infant mortality rates in the entire country. We 
were also the poorest city in America. Those two things are not 
unrelated.
    Chairman Sanders. If I recall, those infant mortality rates 
are not dissimilar from some really poor Third World countries; 
is that correct?
    Dr. El-Sayed. Across our country, our infant mortality is 
not dissimilar from very poor lower-income countries. But in 
Detroit, in particular, yes. My family comes from Egypt. I had 
a grandmother who lost two infants before the age of one, from 
among eight to whom she gave birth. She had a personal infant 
mortality rate of 25 percent.
    And the crazy thing is that I would go to Egypt when I was 
a kid, I would go 15 hours. I could go 15 minutes from where I 
grew up in Detroit and go to a place where the infant mortality 
rate was quite similar to where it was in Egypt.
    And so, if we are serious about investing, and I know my 
colleagues, my conservative colleagues here care a lot about 
the lives of children they say. And if we are serious about 
that, then what we would make sure is that every single mother 
had health insurance regardless of her circumstances so that 
she could access pre-natal care services. That every single 
baby would have the basic services it needed should it fall 
ill.
    But too often, in cities like Detroit, because we had 
hospitals go from being public hospitals to being nonprofits to 
being, finally, for-profits where they are constantly asking 
how can I skimp a dollar out of Medicaid because it is such a 
low-income community, too many people in effect get locked out 
because of the churn of trying to stay on Medicaid at that 
moment where they are trying to safely bear a child and bring 
it to life.
    So if we are serious about the well-being of infants, if we 
are serious about our life expectancy, then we ought to be 
serious about making sure that that transition into life is 
done with the full investment in health care for that mother 
and that baby.
    Chairman Sanders. I see Senator Braun is here. Senator 
Braun.
    Senator Braun. Thank you, Chairman Sanders, for letting me 
be able to speak. I had a lot of stuff going on.
    I am glad we convened this because I come from Indiana, 
viewed health care as the most important benefit for my own 
employees, ran a company for 37 years. And probably the 
proudest thing I did was covered pre-existing conditions and no 
caps on coverage, and turned my employees into health care 
consumers along the way.
    What Senator Sanders is talking about in Medicare For All 
is because we have got a broken health care industry. I have 
fought with it in trying to get good coverage for my own 
employees. There is two things in life, generally, when you are 
spending money. You have to aspire to what you know is a need 
and then do it in a way that is affordable.
    Ironically, all other countries have not found a way to get 
the markets to work. And that is why you have them doing 
something that is either a two-tiered system or what Senator 
Sanders is talking about.
    I personally think that we could cascade into that. And I 
have talked to a lot of CEOs, most of whom never took it as 
seriously as I did, brought it into the C-suite. And I will 
tell you what we accomplished. We cut costs by close to 50 
percent. You would normally think well, that means people were 
not getting covered. No, they were getting covered. And along 
with doing it, I removed the coinsurance part of insurance, to 
where outside of my employees' deductible, they are never going 
to go broke because they get sick or have a bad accident. That 
should be the attitude of every company.
    When you are not taking care of things in the private 
sector, you are going to look to government to do it. Whether 
that is the eventual thing that happens here remains to be 
seen.
    I would love to see the health care industry actually 
reform itself, embrace transparency, embrace competition, 
embrace educating a health care consumer and see if you can 
take costs out of the system before government ends up paying 
for it or to where you have got a broken health insurance 
system increasingly dominated by huge corporations that even 
when you are a decent sized company like mine you cannot even 
wrestle with them.
    So it is either going to be a solution that the problem 
generators fix by embracing competition, embracing 
transparency, knowing that health care, along with education, 
are the two most important things for families. Ironically, 
they are the two most expensive things in our system. And when 
that happens, government gets more involved.
    I think that we need to converge from two different 
directions. I think Medicare For All will win the day and it is 
a solution that most other countries had to go to some version 
of. But I think we have got the possibility of keeping the 
unique best things about our health care system. But it is 
going to be totally up to the big hospital corporations, big 
health insurance, even practitioners to embrace transparency, 
give health care consumers choice.
    And pharma, which gets a lot of the blame, they deserve it. 
They do an excellent job on the R&D and then they come up with 
some monstrosity middle man that sucks out billions and 
billions of dollars, that keep insulin high. So it is broken in 
almost every facet.
    There is entrepreneurialism happening. In Indiana, a clinic 
was started by some anesthesiologists. It cuts the red tape of 
government and big corporations. Give this example, a gall 
bladder operation. In our State, the negotiated rate is 
$18,000. The surgeon, whoever is doing the work, gets paid a 
very, very small amount of it. If you are uninsured but you can 
afford it, it is going to cost you $32,000. They are going to 
do it for $8,000.
    That is the kind of restructuring we need and it needs to 
be the providers of health care. Insurance should almost be out 
of the question. The pool for insurance would be all Americans. 
And it ought to be easy like that because it is the number one 
most important thing, especially as you age. And sadly, too, we 
have got work to do here within our own government. The 
programs that depend, the elderly and especially those that 
cannot afford insurance, Medicare and Medicaid, are going the 
wrong direction, not sustainably.
    I really do not have a question because I have been working 
on this so long. I just want to let you know that you can have 
two different points of view but we ought to at least agree on 
the problem, that health care as we know it is not accessible 
to enough people, it sends too many people to bankruptcy court. 
And if the people that run these big entities now do not do 
something about it, they should not have anyone to complain to 
because government will be the solution.
    I think if we did do some legislation that forced 
transparency, competition, they say they are free market. Let 
us do it. It would make government-provided health care less 
expensive. And maybe we could take it from 20 percent of our 
GDP down to 12 and have our cake and eat it, too.
    The way it looks, they are so intransigent, I have been 
speaking about it, I do not know if they will accept changing 
themselves. That would be a better solution and we ought to 
probably try to work on a few ways to do that, as well.
    Thanks for listening.
    Chairman Sanders. Senator Braun, thanks very much.
    Let me just thank the panel. We have kept you here for a 
very long time. But I appreciate all of the work that all of 
our panelists are doing. As Senator Braun indicated, there is 
probably no issue more important to the American people than 
health care.
    So thank you all very much.
    Our next panelist is going to be the Director of the 
Congressional Budget Office, Director Phil Swagel. Thank you.
    Dr. Swagel is going to be with us virtually. He is the 
Director of the Congressional Budget Office, a position he has 
held since 2019. Previously, he was a Professor at the 
University of Maryland School of Public Policy and a Visiting 
Scholar at the American Enterprise Institute and the Milken 
Institute.
    Dr. Swagel has served as Assistant Secretary for Economic 
Policy at the Treasury Department and as Chief of Staff and 
Senior Economist at the White House Council of Economic 
Advisors.
    Dr. Swagel, thanks very much for being with us.

  STATEMENT OF THE HONORABLE PHILLIP SWAGEL, PH.D., DIRECTOR, 
   CONGRESSIONAL BUDGET OFFICE; ACCOMPANIED BY CHAPIN WHITE, 
   PH.D., DIRECTOR OF HEALTH ANALYSIS, CONGRESSIONAL BUDGET 
    OFFICE; AND JEFFREY R. KLING, PH.D., RESEARCH DIRECTOR, 
                  CONGRESSIONAL BUDGET OFFICE

    Mr. Swagel. Thank you, Chairman Sanders.
    Chairman Sanders, Ranking Member Graham, and members of the 
Committee, thank you for inviting CBO to testify about single 
payer health care systems based on the Medicare Fee-For-Service 
program.
    Now I am testifying by video because I have a little time 
yet in isolation. I am fine and I look forward to emerging.
    I am joined today by my colleagues Chapin White and Jeff 
Kling and I am grateful to Chairman Sanders and to your 
Committee staff for arranging this remote testimony.
    CBO has analyzed five options illustrating the effects of 
differences in providers' payment rates, patients' cost 
sharing, and the system's coverage of long-term services and 
supports.
    The system proposed by Chairman Sanders in S. 1129, the 
Medicare For All Act of 2019, is like these five options in 
some ways and different in some others. We have not analyzed S. 
1129 in particular.
    CBO found the following effects relative to what would 
occur under current law:
    Federal subsidies for health care in 2030 would be 
significantly larger, with the increases in subsidies ranging 
from $1.5 trillion to $3.0 trillion, depending on the option.
    National health expenditures would change by amounts 
ranging from a decrease of $0.7 trillion to an increase of $0.3 
trillion, again depending on the system's design features. The 
most important factors tending to reduce national health 
expenditures are lower payment rates for providers and 
reductions in payers' administrative spending.
    Conversely, the most important factor tending to increase 
expenditures is increased use of care. And that is especially 
if long-term services and supports are a covered benefit, as is 
the case in one of our five options. So health insurance 
coverage would increase, with virtually all U.S. residents 
covered by health insurance.
    Total out-of-pocket costs would also be lower.
    The supply of health care would increase because of fewer 
restrictions on utilization, less money and time spent by 
providers on administration, and providers' responses to 
increased demand for care. The amount of care used would rise, 
and in that sense, overall access to care would be greater in 
the single-payer systems we analyzed.
    The increase in demand for health care would exceed the 
increase in supply, in our analysis, resulting in greater unmet 
demand than under current law. Though higher overall access to 
care and increased unmet demand would occur simultaneously 
because people would use more care and would have used even 
more had it been supplied. The increase in unmet demand for 
care would correspond to increased congestion in the health 
care system. That would mean more delays and forgone care.
    Turning to the economic effects, I will describe the 
outcomes under the five options that CBO analyzed if the system 
was financed by either a payroll tax or an income tax. And the 
estimates on those economic effects depend on the type of tax 
used for financing.
    So our projections for the effects relative to what would 
occur under current law are as follows:
    Gross domestic product (GDP) would be approximately 1 
percent to 10 percent lower by 2030, and aggregate nonhealth 
consumption per capita would change by amounts ranging from an 
increase of 3 percent to a decline of 7 percent.
    Lifetime nonhealth consumption would rise among lower-
income households and decline among higher income households, 
and the number of lifetime hours people choose to work would be 
lower for most households across the income distribution.
    The net reductions in GDP occur primarily because of the 
effects of the increased taxes on labor and capital income. If 
the system was financed by other types of taxes, by government 
borrowing or reductions in other types of government spending, 
the net effect on the economy and, of course, the 
distributional implications would be different.
    In addition to the effects of the system's financing, other 
effects would occur, and these are other economic effects:
    For example, workers would see increased taxable wages as 
employers would no longer provide health care benefits and 
would pass along the savings to employees, again through higher 
cash wages.
    Higher longevity and labor productivity would result with 
the improvements in health care.
    CBO has published a series of reports and working papers 
underlying the summary I have provided today in the written 
testimony.
    My colleagues and I would be happy to talk about the 
details of that analysis and to answer any questions.
    Thank you, very much.
    [The prepared statement of Mr. Swagel appears on page 143.]
    Chairman Sanders. Dr. Swagel, thanks very much for being 
here and thanks very much for all of your work. We hope you get 
well quickly.
    In December of 2020, CBO released a 209-page working paper 
on single-payer health care. CBO considered five options of 
moving to a single-payer system and found that in four out of 
the five scenarios, a single-payer program would save the 
American people between $42 billion and $743 billion a year, 
beginning in 2030.
    The option that most resembles the Medicare For All bill 
that I introduced, which is option three, would save the health 
care system $650 billion a year beginning in 2030 while 
covering every man, woman, and child in our country with no 
premiums, no deductibles, and no copayments.
    So Dr. Swagel, am I correct in stating that option three, 
which is the option most closest to what I have introduced, 
would save $650 billion a year beginning in 2030?
    Mr. Swagel. Yes, sir, Mr. Chairman.
    National health expenditure would go down by $650 billion 
in 2030 in option three. That has the lower payments to 
providers, lower cost-sharing, has long-term services and 
supports, what is in Medicaid but not beyond what is currently 
in Medicaid.
    Chairman Sanders. Speak a bit about the nature of 
administrative savings. How does a Medicare For All move closer 
to what other countries spend on administration? How much are 
we spending now compared to what we would spend under Medicare 
For All?
    Mr. Swagel. I might ask my colleagues to jump in with 
additional details, as well.
    So option three, which is the one that you had mentioned 
before, would result in a $414 billion reduction in 
administrative costs. There would be an additional $508 billion 
savings from changes in the payments to providers.
    The administrative costs would be on two sides, both on the 
provider side that with a single payer system and essentially 
universal coverage, providers such as doctors and hospitals 
would spend much less time in a sense figuring out the sorts of 
things they figure out now with insurance companies. So that is 
on the provider side.
    Chairman Sanders. Let me ask you this, if I could. I am 
sorry to interrupt you, but I do not know if you have it on the 
top of your head right now. What does Medicare spend on 
administration compared to the private health insurance 
industry right now?
    Mr. Swagel. Chapin, do you have that off the top of your 
head?
    Mr. White. Sure. In our analysis, the Medicare Fee-For-
Service program had administrative expenses of about 2.3 
percent, compared to private insurers, which were more in the 
range of around 12 percent.
    Chairman Sanders. And there are some, obviously, private 
insurance companies that spend a lot more than 12 percent. I 
hope everybody understands what we are talking about. The goal 
of health care is to put doctors and nurses and health care 
professionals into contact with patients. Administration is the 
buffer in between. That is shuffling papers.
    And what we are talking about now, according to the CBO, on 
average the private sector spends about 12 percent and Medicare 
spends 2.3 percent. When you add that to the entire health care 
system, we are talking about hundreds of billions of dollars in 
savings.
    Not to mention, Dr. Swagel, I do not know how you quantify 
this, but I think people throughout this country go crazy in 
trying to argue with insurance companies about what they are 
entitled to and why they were covered or why they were not 
covered.
    Do we have any--are there economic analyses as to what that 
costs in terms of the amount of time the American people have 
to spend in arguing with insurance companies?
    Mr. Swagel. We looked carefully at the experience and the 
literature in the U.S. and we looked at the experience of other 
countries, such as Canada, at those savings. And that is our 
lower administrative costs.
    As you say, there would be immense savings, both from the 
provider side and for families. And that would result in more 
care, essentially the time freed up by those administrative 
savings would mean more time providing care to beneficiaries.
    Chairman Sanders. Let us talk a little bit about 
prescription drugs and the savings that would occur under 
Medicare for All. I believe, and the American people 
overwhelmingly believe that Medicare should negotiate 
prescription drug prices. The fact that we do not do that is 
the reason that we pay by far the highest prices in the world 
for our medicine right now.
    Do you have estimates about how much Medicare For All would 
save through prescription drug negotiations with the industry?
    Mr. Swagel. We do have lower savings from negotiated 
prescription drug costs. Again, I am sorry, I do not have that 
off the top of my head. Chapin, do you remember the----
    Mr. White. It depends on the specification. We had a higher 
payment scenario and a set of lower payment scenarios. In the 
lower payment scenarios, prices for prescription drugs would be 
about 27 percent lower than under current law. But the volume 
of prescription drugs used would be higher because of lower 
cost-sharing. And so the total spending on prescription drugs 
would go down under either of those scenarios.
    Chairman Sanders. Okay.
    Now one of the reasons that Medicare For All is expensive 
is because it does what should be done, and that is make sure 
that every American has health care, provides quality care to 
all of our people.
    How many more people--what, in your judgment, would be the 
impact in terms of accessibility to health care for a Medicare 
For All system? How many more people would be getting health 
care who today simply cannot afford to get that?
    Mr. Swagel. Under the single-payer system, virtually all 
people residing in the U.S. would be covered. This would mean 
improved access to care and, importantly, be for both those who 
are uninsured under current law in 2030 and those who are 
insured. Even those who would be insured would have access to 
greater networks and lower out-of-pocket costs and therefore 
would use more health care.
    And of course, for people who would be uninsured that would 
be even a bigger difference in terms of their access and lower 
costs.
    Chairman Sanders. Has the CBO done any work in taking a 
look at what the impact on the economy would be if all 
Americans were guaranteed health care and would no longer have 
to stay at a job that they did not want to stay in just because 
they get good health care at that job? Is that something you 
guys have looked at?
    Mr. Swagel. It is and we put out a report going through the 
macroeconomic effects of the advent of the single-payer system, 
as well as the financing that I mentioned in the opening 
remarks. There would be many economic effects.
    One I mentioned is increased cash wages as employers 
shifted the----
    Chairman Sanders. Let me stop you.
    Mr. Swagel. Yes, please.
    Chairman Sanders. What that means right now that employers 
spend a whole lot of money providing health care to their 
employees. And without having to do that, there would be the 
opportunity to pay their workers higher wages; correct?
    Mr. Swagel. That is exactly right. And there would be other 
effects, greater job mobility I think was mentioned.
    Chairman Sanders. Yes, talk about that job mobility. Do you 
have any guess--I know this is a hard question and nobody will 
have an exact answer. But I go all over the country and talk to 
people who say I am on my job not because I really want to be 
there. I want to do something different. My wife is ill and I 
have got good health care coverage right now. I cannot afford 
to leave that job.
    Do you have any sense of how many people we are talking 
about who are at their job for health care? And what it would 
mean for the economy if they were able to do what they wanted 
to do and retain health care for the family?
    Mr. Swagel. I will give an initial answer and then my 
colleagues can jump in. There is solid economic evidence for 
this, the phenomenon of job lock, and that reducing that would 
increase mobility, increase choices for families, but also 
increase entrepreneurship. That would increase productivity and 
economic growth.
    I do not know the quantification offhand but maybe my 
colleagues do. But the evidence is pretty solid there.
    Mr. White. I think that CBO's assessment is that people do 
tend to stay in jobs longer and it is a phenomena called job 
lock. Our assessment is that that phenomenon is real but we 
have not quantified the number of people or the effects of 
increased job mobility on GDP or earnings.
    Chairman Sanders. But we are in agreement that if everybody 
in this country were guaranteed comprehensive health care, 
people would be freer to leave their jobs and do what they 
really wanted to do? Are we in agreement on that?
    Mr. Swagel. That is right, and that would boost 
productivity and entrepreneurship.
    Chairman Sanders. Okay, that is about it for me and I do 
not see any of my colleagues here. So Dr. Swagel and your team, 
let me thank you all for the very important work you have done 
on this issue. Thanks very much.
    Mr. Swagel. Thank you, Mr. Chairman.
    Chairman Sanders. Before we close, I would like to ask 
unanimous consent that a statement for the record by Eagan 
Kemp, a health care policy advocate at Public Citizen, be 
entered into the hearing record.
    Without objection, that will happen.
    [The submitted statement appears on page 157.]
    Chairman Sanders. Let me just again thank all of the 
witnesses here, as well as Dr. Swagel and his team, for being 
with us.
    This debate is, in my view, maybe the most important debate 
facing our country. I just want to thank all of you for the 
work you are doing and have done and I know will do.
    As information for all Senators, questions for the record 
are due by 12:00 noon tomorrow, with signed hard copies 
delivered to the Committee Clerk in Dirksen 624. Email copies 
will also be accepted. Under our rules, the witnesses will have 
seven days from receipt of our questions to respond to answers.
    With no further business before the Committee, this hearing 
is adjourned.
    [Whereupon, at 1:13 p.m., the Committee was adjourned.]

          ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

    [Prepared statements, responses to written questions, and 
additional material submitted for the record follow:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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