Medicare Privatization Will Increase Health Care Spending

I’ve made this point before, but now courtesy of the Center on Budget and Policy Priorities we get it in convenient chart form. Not only does privatizing Medicare push a larger share of health care costs onto patients, but because Medicare uses market power to bargain down unit prices total health care spending actually goes up dramatically under a privatization scenario:

Now of course at some point in the further future, the Ryancare vouchers will be so stingy that out of pocket costs will be so high that middle class seniors genuinely can’t afford them (especially since Medicaid will have been previously gutted) at which point inability to pay will become some kind of binding constraint on total spending. But in the real world, the combined political clout of the elderly, health care providers, and health insurance companies is going to prevent this from happening. The cost of the subsidies to insurance companies will have to bear some relationship to the price of health care services and it’ll be adjusted upward. Patients will spend dramatically more out of pocket, taxpayers will see few if any savings, health care providers will be able to charge higher prices, and insurance companies will make a tidy profit skimming off the top.