What Medicare For All Might Mean For Jobs : The Indicator from Planet Money Proponents of Medicare for All argue it'll give all Americans health insurance and cost less. But even supporters admit it could mean job losses in the short term.
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What Medicare For All Might Mean For Jobs

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What Medicare For All Might Mean For Jobs

What Medicare For All Might Mean For Jobs

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DANIELLE KURTZLEBEN, HOST:

"Medicare for All" is everywhere. The idea has gone from the fringes of the health care conversation to being a centerpiece of it in a few short years. Turn on any of the Democratic presidential debates, and you'll hear about it.

DARIUS RAFIEYAN, HOST:

And Medicare for All would be a massive overhaul of the health care system, one that its supporters like because it would give health insurance to everyone, and pretty generous insurance at that. And that's a big deal in a country where nearly 29 million people didn't have health insurance last year.

KURTZLEBEN: But with a massive overhaul come trade-offs. And here's one big one that interested us. As some proponents of Medicare for All will acknowledge, it could cost a lot of jobs during the transition. In fact, what inspired this whole episode was this opinion piece by Elisabeth Rosenthal that I saw in the Times earlier this year. It was called "'Medicare For All' Could Kill Two Million Jobs, And That's O.K." That kind of blew my mind, and I just wanted to learn more.

RAFIEYAN: And, of course, my policy would put people out of work is not the most effective campaign platform...

KURTZLEBEN: True, true.

RAFIEYAN: ...Especially in a country that slowly clawed its way out of a recession and is scared of another one. I'm Darius Rafieyan.

KURTZLEBEN: And I'm Danielle Kurtzleben filling in from the NPR Politics Podcast. Today on THE INDICATOR, we talk about Medicare for All and one aspect of it in particular, the potential for it to eliminate lots and lots of jobs. And we talk about what that says about our health care system and just how hard health care reform is.

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KURTZLEBEN: Let's start with a quick refresher. Medicare for All is what Democratic presidential candidate Bernie Sanders calls his single-payer health proposal. He has named it after the current popular government-run health insurance plan for older Americans, Medicare. And while lots of people have co-opted his branding, his single-payer plan is what we're going to be referring to today when we talk about Medicare for All, just to be clear.

RAFIEYAN: And when we say single-payer, payer is the government, so taxpayers. Everyone will be covered by government-issued health insurance. And, at least in Sanders' vision, private insurance would be basically obliterated.

KURTZLEBEN: Which is a big change. I mean, there are lots of private insurers. Think Aetna, Cigna, Blue Cross, whoever you might have your health insurance through. And there are lots of people who work for those companies. Getting rid of those insurers means you have a bunch of workers who would have to find something else to do, as well as probably a bunch of people in hospital billing offices who would have to find something to do.

RAFIEYAN: And just how many jobs would be lost? Well, we talked to Robert Pollin. He is a distinguished professor of economics at the University of Massachusetts Amherst. He and some colleagues got together and analyzed the potential economic effects of Medicare for All. Here's what they found.

ROBERT POLLIN: So if you add up the losses in the health insurance industry and among all the administrative staff at providers, we think we're looking at about 1.8 million jobs becoming redundant.

KURTZLEBEN: One-point-eight million - now...

RAFIEYAN: Doesn't - not a great political bumper sticker.

KURTZLEBEN: Right. And I want to be clear upfront here. Robert likes Medicare for All; he really does. He consulted with the Sanders campaign this election cycle on it.

And Robert found that 1.8 million jobs could be lost if Medicare for All is instituted. Now, here's why. One of the biggest drivers of high health care costs in the U.S. is administrative costs - things like insurance claims, billing, payments - all that. Studies have shown that we spend, in the U.S., way, way more on these things than other advanced economies.

RAFIEYAN: Here's one staggering statistic. By one 2009 estimate, for every 10 doctors, there were, at that time, nearly seven full-time workers in billing and insurance, so workers who weren't directly improving people's health. The savings that Robert talks about would largely be driven by getting rid of that bureaucracy.

KURTZLEBEN: To put this in perspective, 1.8 million employees - that's more workers than American payrolls have added over the last nine months. So three-quarters of a year of all those jobs days (ph) gone.

RAFIEYAN: And this is where we get at one of the big points of Pollin's study - that Medicare for All would, in his estimation, be a good thing. And that's because in his estimation, it would save money.

KURTZLEBEN: And here's what Robert means when he talks about savings. He estimated that everyone in the U.S. altogether spends a little more than $3 trillion on health care every year. By his team's math, even with everyone insured and using the health care system, it would still be 10% cheaper than that $3 trillion.

RAFIEYAN: And it would also be a big shift in how that spending takes place. So take all the spending right now, and make it just the government spending that money - well, the government via taxpayers.

KURTZLEBEN: Important point.

RAFIEYAN: And if you did that, there would be savings.

KURTZLEBEN: But - and this is the important point here - there are trade-offs.

POLLIN: The biggest single source of savings, we have to acknowledge, is layoffs of people whose jobs become redundant.

KURTZLEBEN: So to Robert, 1.8 million lost jobs are not exactly good, but they are evidence that the plan will have worked. And so knowing that those job losses could happen, he told me that he wants to make sure that a single-payer proposal plans for those potential losses.

POLLIN: I mean, the principal reason why I focused on this was precisely to make sure that as part of the discussion around Medicare for All, we include a just transition process for the people whose jobs become redundant.

RAFIEYAN: And what Robert means when he says a just transition process - that would include job retraining, a guaranteed pension and one year's wages for displaced workers. And we should add that when we reached out to the Sanders campaign for comment, they said that Medicare for All includes five years of funding to provide assistance to displaced workers, including things like wage support and retraining.

KURTZLEBEN: And here's where we need to stop for a second because, first off, let's again stress that Robert and his colleagues' estimate of Medicare for All is just one estimate of the potential savings or costs of this plan. We're talking about it to get at just how complicated all of this is.

RAFIEYAN: Which is to say that there are also other estimates of savings. Studies have found a range of possible effects for Medicare for All - that maybe it could save Americans a bunch of money on health care, or that it could cost Americans trillions more. It is very possible that could happen.

KURTZLEBEN: That's a really important distinction to make.

RAFIEYAN: So, you know, plus or minus a few trillion here or there. Who's counting?

KURTZLEBEN: Right. So to talk about what happens if Medicare for All doesn't save money, which might mean it wouldn't cost a lot of jobs, we called Katherine Baicker, dean of the Harris School of Public Policy at the University of Chicago. And she's less optimistic about Medicare for All than Robert was.

KATHERINE BAICKER: I haven't seen a Medicare for All proposal that seems to promise a lot of savings or a lot more efficiency in the health care system.

KURTZLEBEN: But she does have concerns about Medicare for All. For example, she doesn't think it would address wasteful health spending, or, to put it more plainly, that it might not draw a line between health care services that are cost-effective and that improve people's health and services that are really expensive but don't, for example, help people live longer.

RAFIEYAN: And, of course, there's still the question about efficiency. You know, it might mean a bloated system that's as inefficient as it is now, or it might mean a kind of shift - no more private insurance workers, but a lot more health care workers.

BAICKER: And I want to be clear that saving money's not the goal any more than keeping the number of jobs in health care is the goal. The goal is to get as many people as - my goal would be to have as many people as possible covered by a health insurance plan that's delivering health care in an efficient way.

RAFIEYAN: Obviously, the loss of lots of jobs in health care would be painful for a lot of workers. That's clearly not a great thing at all. But for Baicker, it's also not great to have a health care system that's expensive and not helping us get healthier.

BAICKER: If we could employ a lot fewer people in the health care sector without harming health at all, that would be a good thing. Those people could then go work in other sectors and generate other things that improve people's quality of life or standard of living.

KURTZLEBEN: To me, Darius, this isn't just about whether Medicare for All is good or not. All of this, to me, is a perfect window into the impossibly difficult job of trying to improve the health care system and what improving it even means - whether it's saving money, what it means for jobs, whether people are getting healthier or not. And all of that is such a balancing act.

RAFIEYAN: But let's zoom out here and be realistic for a second. For Medicare for All to pass, you'd need Democrats to keep the House, win the White House, win really big in the Senate and also for enough of those Democratic lawmakers to actually come together and agree on a Medicare for All plan.

KURTZLEBEN: Listen; I refuse to make political predictions, so I'll just say that that's a lot of pieces to fall into place, meaning we might have a lot more time to debate all this.

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KURTZLEBEN: This episode of THE INDICATOR was edited by Paddy Hirsch, produced by Emily Lang and fact-checked by Rachel Cohn. I also want to thank Larry Levitt at the Kaiser Family Foundation who also helped us out on this episode. THE INDICATOR is a production of NPR.

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