Tyler Cowen's argument against Medicare-For-All is really quite strange. He writes that "Private insurance has been covering prescription drugs for -- what -- about twenty-five years?...So when it comes to the one thing that really works, government insurance was twenty or more years behind private insurance." Let's argue this in a numbered, Cowen-esque way.
1) The example proves the point. Medicare was barred from covering prescription drugs -- and is currently kept from negotiating down their prices -- by the insurance and pharmaceutical companies, who spent hundreds of millions lobbying against Medicare's entrance into this most profitable market. Those millions, passed onto consumers through premiums and prices, added no value to the system, but kept the elderly from getting necessary drugs at affordable prices. This all goes to show the essential undesirability of a prviate insurance system, and the necessity of a Medicare-for-All structure.
2) Medicare's eventual entrance into prescription drugs, over the screeching opposition of the industry, was evidence of the insurers' failure to hold down the cost of drugs. As the recent Lewin Group report on American health care spending found, we overpay for prescription drugs by $66 billion. If you compare brand name drugs in the US and Canada, the same drug will cost you a full 60% more here. If you restrict that to the top selling drugs, you find we pay 230% more than anyone else. For generics, the difference evaporates. So on average, we overpay by 60-70% for pharmaceuticals. So somehow, all those other countries with systems more similar to Medicare-for-All were squeezing discounts of 50%-70% compared to America's private delivery systems. For years, domestic insurers were politically successful in blocking Medicare's entrance but absolutely incompetent at holding down costs. Eventually, their failure overwhelmed their political success.
3) Medicare Part D, which most everyone agrees is an oddly-designed program that sidesteps Medicare's natural economies of scale and bargaining power, has already scared insurers into providing better service, and so their premiums have clocked in below expectations. That's not only because the insurers fear the more aggressive entrance of Medicare, but because Medicare has been managing them. As Nobel Laureate Daniel McFadden found, "First, the success of Part D depends substantially on thoughtful and muscular management of the market...A health insurance market like Part D probably requires this level of active management to work well; after-the-fact oversight in the style of the SEC or FTC is inadequate. If privatization is going to work elsewhere in health care, active market management will be needed."
On no level, in no way, have private insurers proven uniquely or even particularly capable of effectively delivering pharmaceuticals at a low cost. Indeed, their basic strategy of simply channeling increases into premiums while ignoring the cost-savings offered by formularies and tough negotiations has allowed a flowering of me-too drugs and comparative gouging. Medicare's late entrance into the market was part and parcel of this inefficiency -- the insurers spent hundreds of millions in consumer dollars preventing it, eventually lost, and have been better behaved as the threat of government competition loomed larger. And even now, they are putting money and resources into preventing Medicare from bargaining down prices. Medicare's tardiness is not a lack of foresight, it's evidence of how the insurers are not working in the best interests of consumers.
