Medicare-for-all has been the dominant issue of the Democratic presidential primary debates. So far, the battle over whether to expand Medicare to cover every American has largely been waged around two questions: 1. Whether Americans would still be allowed to purchase private health insurance, and 2. Whether Senator Elizabeth Warren will be goaded into filming her own Republican attack ad by agreeing that Medicare-for-all will be funded in part by new middle-class taxes.
But there's another, potentially more vexing consequence of Medicare-for-all that has been largely ignored by moderators, as well as the 2020 contenders: the plan's expected effect of eliminating some two million blue-collar and middle-class jobs in the United States.
Medicare-for-all promises to deliver a simpler, more humane health-care system. Inefficient and redundant bureaucracy would be eliminated. The immiserating time-suck of navigating network restrictions and doing battle with insurance companies would become a thing of the past. The globally outlandish sums the United States spends not on health-care services themselves but on wasteful administration would be redirected to more socially useful ends.
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That would be sweet relief in countless ways. But Medicare-for-all's promise is a double-edged sword. The flip side is that reducing bureaucracy and administration means eliminating the jobs of bureaucrats and administrators. As University of Massachusetts-Amherst economist Robert Pollin put it, "Every proponent of Medicare-for-all — including myself — has to recognize that the biggest source of cost saving is layoffs."
Needless to say, the vast majority of those left jobless by Medicare-for-all would not be insurance CEOs. In a 2018 analysis, Pollin and his colleagues at UMass's Political Economy Research Institute found that Medicare-for-all would eliminate more than 1 million jobs for medical assistants, billing clerks, and other administrative support staff. The median wage for these workers is around $34,500. Nearly 92 percent of these jobs are held by women, and over a third are held by people of color. And over 80 percent of these workers have less than a four year degree. Indeed, medical assistant work has been the rare fast-growing career opportunity open to those without a college degree.
That impact of Medicare-for-all is especially uncomfortable for the plan's advocates: the workforce affected by these layoffs are the very people meant to be the base of their working-class movement.
Moreover, the elimination of the private insurance industry under Medicare-for-all would in turn eliminate more than 800,000 jobs in that industry. At least half of these are middle-class and blue-collar jobs like insurance agents, secretaries, and customer service specialists, with a median wage around $54,000. A third of these workers are over 50 years old — a notoriously hard stage in one's career to transition to a new line of work.
Some health care workers may find new opportunities under Medicare-for-all as nurses, home health aides, and other in-demand roles. But other workers will be displaced. While the immediate impact would be felt by health insurance and health-care administration employees, job losses could reverberate into hospitals, other providers, and ultimately into the broader economy — especially in communities that depend on health care as a major economic engine.
Medicare-for-all proponents are aware of this. The bills introduced by Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.) each set aside transitional funding for wage replacement and job retraining for workers who lose their jobs under the health care overhaul. But is this good enough? We've provided similar adjustment assistance to compensate those who lost jobs in the transition to a free trade system. But that has hardly seemed to quell the discontent by those who have borne the concentrated costs of globalization.
Today Medicare-for-all is being debated in a low-unemployment economy. But that could always change. There is a very real chance the economy could tip into a recession within the next few years, and the manufacturing industry is already in one. That could happen even before November 2020, in which case policy-inflicted job losses could suddenly become a political lightning rod for a Democratic presidential nominee tethered to Medicare-for-all. And even without an economic downturn, President Trump will undoubtedly use the plan's projected employment effects to paint his Democratic opponent as a job-killer.
Our health-care system shouldn't double as a jobs program. But decades of letting our broken system fester have turned it into one. It's precisely because health care in America has grown so bloated and entrenched for so long that such prudence is required to transition toward a more sensible and humane way of paying for care. For instance, one possible path forward could be to use private insurance companies and their employees to administer Medicare-for-all as a sort of "back room for government."
Medicare-for-all very well may be worth doing despite its employment side effects. But it's a debate that Democratic voters deserve to hear discussed — at least as much as the umpteenth attempt to get Senator Warren to say the "t-word."
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