An Economist With A Fantasy View Of Math And What Happens To Projected Costs In Real Life
Elizabeth Warren has claimed that middle-class taxes won't go up even "one penny" to pay for the healthcare plan she's proposed -- projected by her to cost only (only!) $20.5 trillion over 10 years (and projected to cost much more by others doing the estimating).

Charles Fain Lehman writes at Free Beacon:

The Warren plan, released Friday, relies on two bold assumptions: first, that Medicare for All will cost only $20.5 trillion over 10 years, and second, that middle class Americans will not need to pay for it. Nonpartisan analyses indicate that single payer will cost far more, and experts suggest that even if Warren's taxes nominally only target the wealthy, their effects will be felt throughout the economy.

Essentially every serious estimate of the cost of Medicare for All has pinned it between $25 and $35 trillion over 10 years. The liberal Urban Institute pins the cost at $34 trillion, while the widely cited estimate from the free-market Mercatus Center predicts it will cost between $27.7 trillion and $32.1 trillion. Sen. Bernie Sanders (I., Vt.), the bill's most vocal champion, has agreed with these estimates.

Warren, by contrast, relies on an analysis by two experts--former Obama administration official Donald Berwick and MIT economist Simon Johnson--to get the price tag down to $20.5 trillion. The lower estimate depends on the assumption that Warren is able to implement a number of reforms, some of which are potentially unconstitutional. Charles Blahous, the Mercatus scholar, said the estimate is based on fantasy.

"That estimate is not remotely realistic," Blahous told the Washington Free Beacon. "Every credible analysis has found that the actual costs would be substantially higher, adding an amount of federal spending over the first decade of somewhere in the mid-30 trillions. It does not come close to acknowledging the costs of Medicare for All, let alone financing them."

Things almost always cost more than projected.

I knew this as a TV commercial producer, the work I did right out of college. The AICP form -- the Association of Independent Commercial Producers budget -- had a +/- 10%, if I'm recalling correctly. Beyond that, I padded the fuck out of every budget, because, again, if there's one thing you can count on, it's that everything ends up being more expensive.

Warren comes up with all sorts of plausible-sounding ways to cover costs -- plausible unless you look at them in the light for a minute or two. They're listed (and debunked at the link above).

For example:

Warren also expects to find substantial savings through "comprehensive payment reform," meaning the substitution of Medicare reimbursement rates for private insurance reimbursement rates. Under current rules, Medicare pays hospitals 87 to 89 cents for every dollar of medical spending, a gap which is filled by an average reimbursement of $1.45 per dollar of spending from private insurers.

Warren's plan promises to increase Medicare reimbursements by 10 percent and provides "appropriate adjustments" for rural and teaching hospitals. But compensation at Medicare rates could still see dozens of narrow-margin hospitals in underserved areas shutter and lead to what Pope described as "rationing" of medical services.

"If hospitals are expected to make do with much less money than they would be currently, but are expected to care for more people, then they're going to have to really tightly restrict the access to services that people currently expect to get," Pope said.

All in all:

Warren is aggressively optimistic both about how much Medicare for All would cost, and how much tax revenue she could raise to pay for it. A report from the Committee for a Responsible Federal Budget sounded a more sober note: Paying for a $30 trillion plan would likely require a doubling of income taxes, a huge value-added tax, or some other major imposition on the middle class.