Dem hopefuls target pharma, insurer profits
WASHINGTON — Sen. Bernie Sanders and other progressives seeking the Democratic presidential nomination are zeroing in on pharmaceutical and insurer profits, money they say would be better spent providing health care for everyone under “Medicare for All.”
Their idea: Health care dollars from government programs, employers and families that are going into the pockets of investors instead could be used to pay for services. If people want a health care system that will not bankrupt them, “the answer is to get rid of the profiteering of the drug companies and the insurance companies (and) move to Medicare for All,” Sanders said during the recent Democratic debates.
But research by The Associated Press suggests those dollars might not go so far. While there’s no single ledger for drugmakers and insurers, the AP found major companies had about $97 billion in profits last year. That wouldn’t even cover a couple of weeks in a health care system that costs $3.6 trillion a year.
“My view is that we are having a debate in fantasy world,” said Marc Goldwein, senior policy director with the nonpartisan Committee for a Responsible Federal Budget. “Insurer profits and excess drug costs are large in dollar terms but small relative to the size of national health expenditures.”
In a statement, Sanders’ office said he believes that “guaranteeing health care for all Americans as a right requires ending the profit motive of the insurance industry.”
During the last round of Democratic debates, Sens. Elizabeth Warren of Massachusetts and Kamala Harris of California joined Sanders in training rhetorical fire on drugmakers and insurers. They had their own profit estimates.
“Insurance companies do not have a God-given right to make $23 billion in profits and suck it out of our health care system,” Warren said.
Harvard University health care economist Amitabh Chandra said focusing on the profitability of major drugmakers misses a crucial part of the drug industry’s story. Many companies engaged in research and drug development don’t make money and are instead kept afloat by investors hoping for discoveries that will lead to big returns.
“It’s incomplete — it’s not the universe of all companies,” Chandra said. “It’s sort of like saying lottery winners are rich.”
Tara O’Neill Hayes, a health policy expert with the American Action Forum, a center-right think tank, said Medicare for All proponents have found a simple, appealing argument for their proposal. But it skips over the complexities of a plan that would put 18% of the economy under government control.
“It is really easy, and it sells with the general public,” Hayes said. “People like to have an enemy, and they like to point to someone as the problem. We’ve known that for decades.”