By IGOR DERYSH
PUBLISHED MARCH 14, 2020 10:00AM (EDT) “Salon Magazine”
Medicare for All health care system would create millions of new jobs despite critics’ concerns that it would cause widespread job losses by eliminating the private insurance industry, according to a new analysis by the Economic Policy Institute (EPI).
Opponents of the Medicare for All proposals offered by Sen. Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass., have argued that the plan would eliminate nearly 2 million jobs in the private insurance sector. But the analysis from EPI, a progressive think tank, found that a Medicare for All system would not only replace those jobs but also create millions of new ones.
More than 20 recent studies concluded that a Medicare for All system would cost less than the status quo. A recent study published in the Annals of Internal Medicine found that much of the added costs that Americans pay compared to nations that already have single-payer health systems comes from propping up the system itself. Roughly 34% of all health costs are spent on covering overhead — bloated salaries for insurance company executives and administrative costs — which comes out to $2,497 per person each year, about four times what Canadians pay.
The main reason that research consistently finds that Medicare for All would cost less than the current system is that it would eliminate about 1.8 million private insurance jobs, according to a recent estimate. But this would not “profoundly affect the total number of jobs in the US,” EPI argued. While it is a significant number, American companies laid off 21.9 million workers in 2018 without any policy eliminating an entire industry.
“Our economy generates a huge amount of job churn every year,” said Josh Bivens, EPI’s economic research director. “This churn is the hallmark of growth in productivity — getting more economic output with fewer inputs. Relative to the scale of other gross measures of job churn, the churn associated with M4A [Medicare for All] is not large.”
Spaced out over a four-year phase-in period, these job losses would add just 2% to the national rate of layoffs, the report noted, adding that there have already been 1.7 million layoffs over the past four years in the finance and insurance sectors.
Other economists have also argued that propping up these jobs is not a good reason to sacrifice affordable health care.
“Treating the health care system like a (wildly inefficient) jobs program conflicts directly with the goal of ensuring that all Americans have access to care at an affordable price,” Harvard University economists Katherine Baicker and Amitabh Chandra said in a 2012 article in the New England Journal of Medicine.