Who Will Control Congress in 2019?
Everybody cares about health care. In the U.S., it’s about one-fifth of GDP, and total spending on it goes well over $3 trillion annually. People get sick – or even if they’re young and healthy, they know people who are really sick. It’s one of the few political issues that can generally grab anyone’s attention no matter their partisan affiliation, background, or socioeconomic status. Recent polling shows – to nobody’s surprise – health care is cited as the No. 1 issue of concern for those planning to vote in the midterm election.
But health care is also a huge umbrella term for a vastly complicated system that includes everything from visits to your local internist to multibillion-dollar wonder drugs that can keep rare cancers at bay. Democrats and Republicans know they’ve got a very limited attention span with the general public, so to get people motivated to vote, they tend to push one or two major health care talking points at a time. This election cycle is no different.
For the GOP, including the Donald Trump White House, the big push is to lower prescription drug prices. Across the aisle, the Democrats are more openly than ever advocating “Medicare for All,” which is really a euphemism for European-style single-payer health care.
Democrats and Republicans know they’ve got a very limited attention span with the general public, so to get people motivated to vote, they tend to push one or two major health care talking points at a time.
Let’s start on the GOP side. The cost of prescription drugs has been a major policy issue with the Republicans all year. President Trump has said that “fixing the injustice of high drug prices is one of his top priorities.” A quick look at the numbers shows why the president has focused on this.
Americans spent $323 billion ($450 billion based on list prices, before rebates and discounts) on prescription drugs in 2016, and that cost is growing at roughly 5% a year. And with the current regulatory distortions in place, high-priced new drugs that benefit 1% of insured beneficiaries will account for half of drug spending within five years. Many of the federal regulations in place – ones that create actual monopolies for certain drug companies – are the result of outdated or simply foolish FDA interventions.
President Trump has been all over this problem. The U.S. Department of Health and Human Services put out the “American Patients First” proposal this past May, which outlined the scope of the problem and presented concrete steps to address it. The short version is that the government will try to increase competition to bring down prices and negotiate more effectively for bulk purchases. While it’s going to take some time to see the efficacy of this approach, the first generic EpiPen was approved recently as part of the administration’s push. Others are sure to follow.
Now for the Democrats: Their main health care pitch is a hard Left “health care for all.” They call it “Medicare for All,” but that’s not really an accurate description. While the details are hazy (probably intentionally so) and different individual Democratic politicians have variations on the theme, the Bernie Sanders wing of the party wants to go even further than a Medicare model. Medicare requires some cost sharing and co-pays, and many Medicare recipients buy supplemental insurance. What is fashionable right now among Democratic politicos is more along the lines of “everyone is covered, everything is covered.” It simply would be the federal government paying for all health care expenditures across the board, taxing the rich into oblivion, and completely eliminating private insurers.
Now, you might be thinking, “Hold on, that’s got to be insanely expensive” – and indeed it would be. Depending on whose estimate you prefer, the Democrats’ single-payer approach would add somewhere from $14 trillion to $30 trillion to the deficit over a 10-year period. It would require massive tax raises on the middle class, the estate tax, capital gains, and dividend income. Wages would likely get crushed. True, you would no longer be fighting with insurers to get timely and effective health care – you’d be fighting with the federal bureaucracy. Good luck with that.
Remember, when Democrats had 60 votes back in 2009, they didn’t go for single-payer health care. While the political ground has shifted considerably since then thanks to Obamacare, all of the real-world problems remain with what would essentially be Medicare on steroids for 320 million Americans.
But lots of folks like to believe in Santa Claus. At a time when political demagoguery seems to have completely outmatched reasonable discourse, promising a lot of free stuff to everyone and claiming that only the rich will pay for it might just do the trick at the polls. Midterms are all about base turnout, and few things energize the Left as much as a massive push toward a European-style welfare state.
The Democrats need to flip 24 Republican seats to take control of the House of Representatives, and need a gain of two seats to take the Senate. There will be a lot of talk in the weeks ahead about Russia collusion, deep-state spying, and other media distractions.
Meanwhile, control of the House and maybe even the Senate could change hands based on whether the promise of universal health care – or better drug prices – pushes more people to show up on November 6.
It’s free stuff versus the free market. We’ll see who wins.
Buck Sexton is host of the nationally syndicated talk radio program, The Buck Sexton Show, heard on over 100 stations across
A former CIA and NYC Police Department Intelligence Officer, Buck is also the co-host of Stansberry Investor Hour, a weekly radio show that you can subscribe to for free right here: investorhour.com.