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Lady Bird Johnson, former President Harry Truman, and Bess Truman look on as President Lyndon Johnson signs Medicare into law. Photo by Francis Miller/The Life Picture Collection/Getty

Universal healthcare is nothing to fear.

Those who use “socialism” as a pejorative term to fear-monger want you to think that America can’t afford to provide universal healthcare. But the fact is, we can’t afford not to.

Julie Oliver
Feb 20 · 12 min read

In this piece, I’m going to make the case for 4 arguments:

  1. Universal healthcare is fiscally responsible.
  2. Not only is universal healthcare the moral thing to do, our current system is un-American and anti-entrepreneurial.
  3. The status quo props up a hugely wasteful, inefficient system — a.k.a., socialism for corporations and the rich.
  4. America has never been afraid of taking on the big, bold, ambitious and aspirational goals. Providing a basic necessity like healthcare to our fellow Americans is nothing to fear. Failing to do so is un-American.

tl;dr: Universal healthcare is fiscally responsible, and American taxpayers already provide socialism for corporations and for the rich. Our blended economy would derive enormous benefit by moving to single-payer healthcare.


In his State of the Union address, Donald Trump declared that “America will never be a socialist country.”

Dr. Martin Luther King would often point out that America is already a socialist country¹ — our government provides socialism for the rich, powerful, and corporations. And the rest of us pay for it

“SOCIALISM FOR THE RICH, FREE ENTERPRISE FOR THE POOR” — Excerpt from Southern Christian Leadership Conference newsletter, 1967. Source: The King Center.

Universal healthcare is fiscally responsible. Our current path is not.

During my 2018 campaign for US House of Representatives, Republican candidates in Texas used the word “socialist” in the hope of frightening voters into supporting them and to fear-monger around candidates like me, who chose to listen to the people of Texas instead of corporations and lobbyists. (Despite those claims, our first-time campaign, relying 100% on individual grassroots donations, swung our heavily gerrymandered “red” district 12 points.)

Exploiting fear for political ends is nothing new. It is most pronounced in this country in the way politicians scapegoat immigrants and any imagined “other”, to produce paranoia and anxiety to justify any political end — even an unpopular, failed, racist campaign promise like Trump’s border wall.³

Children separated from asylum-seeking families at the now-closed Tornillo camp in West Texas, June 2018. Photo: Joe Raedle/Getty Images

But in addition to anti-immigrant scapegoating, Republicans have been trying to use the word “socialist” as a dirty word since FDR’s New Deal,⁴ LBJ’s Great Society, and of course, President Obama’s Affordable Care Act.⁵

And that appears likely to continue.

Socialism for the rich, capitalism for the poor

Never mind that Donald Trump enjoys taxpayer-funded trips to his own for-profit golf club, or that Trump’s inherited real estate empire grew as a result of $885 million in taxpayer funded subsidies.⁶ Never mind that Congress, comprised overwhelmingly of millionaires, either enjoys a gold-level ACA product, 72% of which is subsidized by taxpayers, or Medicare — our country’s wildly successful socialized healthcare program.⁷

We see socialism for the rich in a tax bill, literally written by lobbyists for the banking industry,⁸ that added $2 trillion to the national debt, and which handed 80% of the benefits to the top 1% wealthiest people in this country.⁹

Hand-scribbled notes, literally written by lobbyists, in the Senate’s tax plan — a $1.4 trillion tax cut — permanently cut the corporate tax rate from 35 percent to 20 percent, repealed the ACA’s individual mandate, estimated to leave 13 million fewer insured over the next decade, and overwhelmingly advantaged the country’s wealthiest. Source.
May 4, 2017: House Republicans after they voted to repeal major parts of the ACA, including ending protections for those with pre-existing conditions. Mark Wilson, Getty Images.

None of that has stopped politicians from trying to fear-monger by using the word “socialism.”

And nowhere is the term “socialism” used more pejoratively¹¹ than in the status quo’s defense of America’s massively failed for-profit healthcare system, a system of legalized corruption that enriches lobbyists and corporations at the expense of every American, of the sick, of the poor, of medically fragile children, and of those with disabilities.

In the discussion surrounding the fact that the wealthiest, most powerful country in the history of the planet does not provide healthcare for those who need it most, “socialism” is the term most often deployed by politicians to terrorize voters.

The fact is that the majority of Americans favor single-payer healthcare — that support is broad and bipartisan.¹²

Yet while our insurance premiums — and with them, the amount of people unable to see a doctor or afford their prescriptions — continue to increase, and while medical GoFundMe’s become the norm, those in power have stymied any efforts at healthcare reform.

How did our Congressional priorities get so out of whack?

Those politicians’ campaigns are massively funded by the for-profit insurance, healthcare, and pharmaceutical lobbies.¹³ The Supreme Court ruled in Citizens United that corporations were people and money was speech.¹⁴ That unleashed a dangerous amount of spending by PACs, corporations, and special interests — meaning that those who are politically connected are protected from accountability and that the American people suffer as a result. Pharmaceutical and insurance corporations are able to buy influence and outcomes through lobbying, PAC contributions and sympathetic political appointees.

We’re left footing the bill.

Campaign spending and lobbying expenditures by the pharmaceutical and health product industry. Source: OpenSecrets.org.

You already pay for everybody’s healthcare.

One of the complaints we often hear deployed amongst those politicians who oppose universal healthcare is: “You, the taxpayer, shouldn’t have to pay for someone else’s healthcare.”

I’m an expert in how healthcare finance works. I worked in corporate healthcare finance for 15 years for one of the largest healthcare corporations in the world. (I also have a law degree, and I’m an accountant with a tax background). So I can say, definitively and with authority:

You already pay for everyone’s healthcare. You just do it in the most expensive, inefficient and wasteful way,¹⁵ with the worst outcomes.¹⁶

Source: OECD Health Data 2016. Data are for current spending only, and exclude spending on capital formation of health care providers. GDP refers to gross domestic product.
Source: Harvard T.H. Chan School of Public Health, Harvard Global Health Institute, London School of Economics. Credit: Rebecca Coleman/Harvard Staff

All of us already currently pay for everyone’s healthcare in America under both federal law and, in Texas, state law.

Federal law¹⁷ requires anyone coming to an emergency department to be stabilized and treated, regardless of their insurance status or ability to pay. Many people think that hospitals eat this cost; some do, but many don’t.

Texas state law¹⁸ requires counties to provide healthcare assistance to eligible, indigent residents; this requirement creates a huge burden on rural hospitals, and that leads to hospital closures in communities where hospitals are one of the primary economic drivers.

Tex. Health and Safety Code § 61. The Indigent Health Care and Treatment Act. Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. “Sec. 61.022. COUNTY OBLIGATION. (a) A county shall provide health care assistance as prescribed by this subchapter to each of its eligible county residents.”

The argument against socialized medicine is clearly being made in bad faith, because it’s too late — we already pay for universal emergency care regardless of whether someone has insurance or can pay for it.

So what’s the difference between what we have — wasteful, expensive, inefficient, propped up by the status quo, and subsidized by the taxpayer — and what we should have?

The critical difference is that under our current system, preventive care isn’t covered.

Preventive care is life-saving, and providing it for everyone is fiscally responsible — it is a fraction of the cost of emergency care. Until we provide preventive care for every single person in this country, everyone’s taxes and insurance premiums will continue to go up.

Let’s take two very treatable chronic illnesses as examples — Type 2 diabetes and hypertension. Diabetes and hypertension are very common and also very treatable. But if left untreated, these conditions cause devastating complications and become some of the most expensive conditions to treat.¹⁹

If a patient comes in through an emergency room because they’re in cardiac arrest that could have been prevented by medication management and regular office visits with a physician, the cost of that patient’s care is exponentially more expensive because of the trip to the ER. Assuming a hospital charge of $160,000 for cardiac surgery and a hospital stay²⁰, a patient could have scheduled visits with his doctor over 1,000 times (assuming an office visit charge of $150).


Universal healthcare is fiscally responsible.

Because Texas did not expand Medicaid, we have the highest population of uninsured people in the country.²¹ But, insurance or no, — and it seems silly to even have to say this — every single person is going to need healthcare at some point in their lives. Healthcare is a basic human necessity. And when those without insurance need healthcare, they go to an ER.

What happens when uninsured folks visit emergency departments at hospitals? The federal government does provide some reimbursement to hospitals who have a significant Medicaid or uninsured population through disproportionate share (DSH)²² and 1115 waiver payments²³ — but these payments only cover a fraction of the associated costs.

If a hospital is in a high-density, urban area with lots of insured patients, it bundles the costs of “uncompensated care” (a term used to describe anyone who can’t or doesn’t pay their medical bills), and pushes them to insurance companies the next time they negotiate insurance reimbursements.

The insurance companies, in turn, push those costs (plus their profit and administrative fees of up to 20%) to employers, who then share the costs with their employees. That leaves insured people and the companies who employ them footing the bill for billions of dollars of healthcare annually.²⁴

So even if you’re lucky enough to have insurance through your employer in this country, your premiums will continue to rise as a function of the way we pay — or don’t pay — for healthcare in America.

Former Governor Rick Perry opted Texas out of Medicaid expansion.²⁵ That left Texas taxpayers footing the bill for billions of dollars in uncompensated care. You can thank him (and Governor Abbott) for high insurance premiums and high property taxes.

Texas’ rural hospital crisis

Texas leads the nation in hospital closures, with 15 since 2013 — almost double any other state — and they have all been rural.²⁶ If there isn’t enough county tax revenue, hospitals close. Many county hospitals in rural Texas no longer deliver babies — so if a mom goes into pre-term labor, and the next hospital is an hour or more away, the outcomes can be and often are unfavorable. Time is of the essence in treating strokes, heart attacks, brain injuries, and rattlesnake bites; if a county hospital closes, the danger is very real, and that community suffers.

Remember those “uncompensated care” costs that hospitals in urban areas pass along to insured patients and their employers? Hospitals in rural communities aren’t able to do that; they can’t push those costs onto insurance companies. Many operate at a deficit and must collect property tax revenue to cover the shortfall (urban communities also collect property tax revenue to pay for indigent healthcare). That means that it is the counties — and those paying local property taxes — paying for the uninsured who seek emergent care.

The way forward

So how do we lower healthcare costs for everyone? We allow every American to seek preventive care, and to avoid unnecessary and preventable hospital visits. We move to guaranteed universal healthcare — that reduces the administrative fees that all of us subsidize in the massively wasteful corporate healthcare business in America.

Insurance companies are the middle men we pay for administering insurance claims. Medicare’s administrative costs are 2%, and there is no profit margin with Medicare. On the other hand, insurance companies’ administrative fees and profit are roughly 20% of the costs of care they administer; part of this 20% includes the 2017 compensation for health insurance CEOs of $342.6M; those costs are part of our healthcare costs.²⁷

Insurance companies also notoriously deny claims, and hospitals pay millions of dollars annually fighting these denials; again, we, the American taxpayer, end up paying for these costs.

The case is not that America can’t afford to provide healthcare to everyone. It is that it would be disastrous for this country to continue not to provide it.

The reality is that our county’s mixed-market economy would derive huge benefit from healthcare reform, and specifically by introducing singe-payer healthcare. We are already the beneficiary of socialized programs. When you travel by highway or air, a federal agency ensures that your travel is safe. Veterans can seek healthcare and housing services through the Veterans Affairs department. And the FDA ensures we are safe from virulent strains of E. coli, botulism, or salmonella because we have national food safety guidelines and testing. And, of course, public schools are probably the largest social program in our country.

The economic benefits to single-payer healthcare are transformative and impossible to ignore. Imagine the increase in productivity across the American workforce: when people are well, they can live and work to their full potential. Imagine the freedom that would come with separating insurance from employment — when providing insurance is no longer a barrier to starting a business, or it’s no longer keeping you from chasing your version of the American dream.

Today’s politicians use the term “socialism” in the way that Orwell described political language in Politics and the English Language: “to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”

But all of us should have a say in how the country’s vast wealth should be used, and nowhere can that do more good than in providing healthcare for every single man, woman and child, rich or poor, young or old, pre-existing conditions or not. That is only going to be possible when we get corporations and big-money donors out of our democracy, and when lawmakers are truly accountable to the people.

I don’t think that’s too much to ask.


Footnotes:

  1. Thomas F. Jackson, Martin Luther King: From Civil Rights to Human Rights: Martin Luther King, Jr., and the Struggle for Economic Justice, ISBN 0–8122–3969–5, ISBN 978–0–8122–3969–0, page 332.
  2. Robert Reich, “Trump offers socialism for the rich, capitalism for everyone else,“ The Guardian, February 11, 2019.
  3. Amber Phillips, “‘They’re rapists.’ President Trump’s campaign launch speech two years later, annotated,” The Washington Post, June 16, 2017.
  4. “Roosevelt is a socialist, not a Democrat,” Republican Rep. Robert Rich of Pennsylvania, House of Representatives floor speech, July 23, 1935.
  5. Roger Williams, “Barack Obama is a Socialist,” Campaign Website, June 13, 2012.
  6. Charles V. Bagli, “A Trump Empire Built on Inside Connections and $885 Million in Tax Breaks,” The New York Times, Sept. 17, 2016.
  7. Esther Bloom, “Here’s how much members of Congress pay for their health insurance,“ CNBC, July 25, 2017.
  8. “A Hasty, Hand-Scribbled Tax Bill Sets Off an Outcry“, The New York Times, Dec 1, 2017.
  9. “Distributional Analysis of the Tax Cuts and Jobs Act, as Ordered Reported by the Senate Committee on Finance on November 16, 2017, Excluding the Effects of Eliminating the Individual Mandate Penalty”, Congressional Budget Office, November 27, 2017.
  10. Wallace, James S. and Ferris, Kenneth R., Irc Section 162(M) and the Law of Unintended Consequences, November 2006. Available at SSRN: https://ssrn.com/abstract=942667 or http://dx.doi.org/10.2139/ssrn.942667.
    See also: Executive Excess 2016: The Wall Street CEO Bonus Loophole, August 31, 2016.
  11. Rushefsky, Mark E.; Patel, Kant (2006). Health Care Politics And Policy in America. Armonk, N.Y.: M.E. Sharpe. p. 47. ISBN 978–0–7656–1478–0. “….socialized medicine, a pejorative term used to help polarize debate.”
  12. Kaiser Family Foundation, KFF Health Tracking Poll, “Poll: Majorities Favor a Range of Options to Expand Public Coverage, Including Medicare-for-All”, January 23, 2019.
  13. Lee Fang and Nick Surgey, “Lobbyist Documents Reveal Health Care Industry Battle Plan Against ‘Medicare for All’”, The Intercept, November 20, 2018.
  14. Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)
  15. Karen Feldscher, “What’s behind high U.S. health care costs”, The Harvard Gazette, March 13, 2018.
  16. Eric C. Schneider, Dana O. Sarnak, David Squires, Arnav Shah, and Michelle M. Doty, “U.S. Health Care Ranked Worst in the Developed World”, How the Performance of the U.S. Health Care System Compares Internationally, 2017.
  17. 42 U.S. Code § 1395dd. Examination and treatment for emergency medical conditions and women in labor.
  18. Tex. Health and Safety Code § 61. The Indigent Health Care and Treatment Act. Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. “Sec. 61.022. COUNTY OBLIGATION. (a) A county shall provide health care assistance as prescribed by this subchapter to each of its eligible county residents.”
  19. Jha AK1, Aubert RE, Yao J, Teagarden JR, Epstein RS, “Greater adherence to diabetes drugs is linked to less hospital use and could save nearly $5 billion annually.” US National Library of Medicine/National Institutes of Health, August 31, 2012.
    See also: Lifetime Direct Medical Costs of Treating Type 2 Diabetes and Diabetic Complications; The Cost of Diabetes; Trends in Healthcare Expenditures Among US Adults with Hypertension: National Estimates, 2003–2014; Cost-Effectiveness of Hypertension Therapy According to 2014 Guidelines
  20. Chad Terhune, “Life-Threatening Heart Attack Leaves Teacher With $108,951 Bill“, NPR Health Shots, August 28, 2018.
  21. Rachel Garfield, Anthony Damico, and Kendal Orgera, “The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid“, Kaiser Family Fund study, June 12, 2018.
  22. “Medicaid Disproportionate Share Hospital (DSH) Payments“, Medicaid.gov.
  23. 42 U.S.C. § 1315.
  24. Much of this data is private, but I know this from my 15 years of experience working in healthcare finance for a large hospital system. See also: “Hidden Health Tax: Americans Pay a Premium”.
  25. Wade Goodwin, “Texas Politicians and Businesses Clash Over Medicaid Expansion”, NPR, May 29, 2015.
  26. Ayla Ellison, “7 states with the most rural hospital closures”, Hospital Review, March 26th, 2018.
  27. Fierce Healthcare, ”Health insurance CEOs earned $342.6M in 2017,” May 7, 2018.

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