Simon Johnson Claims the Warren Health Plan is a Gift to U.S. Businesses

Alan ReynoldsAn advisor to the Warren campaign,Simon Johnson of MIT, has written an impressively fact-freeWall Street Journalarticle claiming Senator Warren's "remedy for health care costs" would be a wonderful gift to American businesses."Americans currently spend nearly 18% of gross domestic product on healthcare. . . and a great deal of this burden falls directly on companies." He claims "this dead weight gets heavier each year" and "companies cannot by themselves easily constrain health-insurance premiums." The impression is that businesses shoulder a large and rising share of total spending on health care. And unlike all other employee compensation (such as salaries and retirement benefits) this is said to be just a "deadweight cost" that "get heavier each year" yet remains "unpredictable."According to theCenters for Medicare and Medicaid Services (CMS), however, "the private business share of overall health care spending remained fairly steady since 2010." That steady 20% share is neither "a great deal of" the total nor did it "get heavier each year." Whathas gotten heavier each year is the burden of Medicare and Medicaid which, unlike private companies, obviously cannot "constrain health care premiums" –­ including those collected in the form of taxes.Federal, state and local governments accounted for 48% of spending in 2017, says CMS, compared with 34% for private insurance. If someone is spending too  much, the private sector seems the least likely culprit. And J...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs