Seven Years Until Single-Payer (1/3)


Now that it’s clear President Trump didn’t “fail” in his quest to reform healthcare — he was just negotiating — I think it’s a good time to wade into the issue. To be honest, I am not interested in partisanship (even though I just engaged in a bit of it myself) and the main debate. The arguments over the merits of the AHCA (Trump/Ryancare) vs. the ACA (Obamacare) always seem like cherry-picking and wishful thinking to me. Every commentator acts like he or she knows the right plan for America. But I think an honest assessment of what he had, what we have and what is proposed reveals that no one really has a clue how to fix this disaster.

So let’s sidestep that question and go to what I believe is the heart of the matter: Is healthcare a right? And whether it is or not, do the American people believe that it is?

Two recent articles caused me to focus on this. One is a Washington Times article titled, “Krauthammer predicts U.S. will have single-payer health care ‘in less than seven years.’ ” Here’s the key excerpt (emphasis mine):

“I think historically speaking we are at the midpoint,” the conservative author [Charles Krauthammer] said. “We had seven years of Obamacare, a change in expectations. And I would predict that in less than seven years, we will be in a single-payer system. I think that’s the great irony of this. Obamacare failed at every level. Politically, the Democrats were crushed over six years and four elections, whereas you say, they lost seats in the House, the Senate, the governorships, etc. largely because of Obamacare …
“[Yet] I think Obamacare wins the day because it changed expectations,” the pundit said. “Look at the terms of the debate. Republicans are not arguing the free market anymore. They have sort of accepted the fact that the electorate sees health care as not just any commodity. It’s not like purchasing a steak or a car. It is something people now have a sense that government ought to guarantee.”

The other article is a Bloomberg column by Tyler Cowen titled, “What Democrats Won’t Admit About Voters and Health Care.” Here are the most salient points (emphasis again mine):

Since the Republican House approved its replacement for Obamacare, critics of the bill have told us how it will take health insurance away from millions of people, while doing little to control medical costs or bring fiscal rectitude. Those arguments are mostly true, but the same commentators have neglected to acknowledge a crucial point. The House plan won’t work for the same reasons Obamacare has had trouble — namely there is no social consensus on who should pay the bills 
Consider the part of the plan that would take away many federal-level protections embedded in Obamacare for those with pre-existing conditions … [yet] the American Health Care Act of 2017 does not prevent states from spending whatever is needed to cover pre-existing conditions, if they so choose. The underlying truth is that voters at the state level just aren’t that interested in paying for these benefits, preferring instead to lower taxes, or to spend the money on roads, schools and prisons …
Another way to manage health-care subsidies would be a single-payer system, and some commentators suggest that is where the Democratic Party is headed. I wouldn’t be so sure … The Americans who get health insurance through their jobs often enjoy privileged access to doctors and benefit from superior reimbursement rates. If the price of covering the sick is for millions of wealthier and more influential people to give up those advantages, I don’t see that happening.
The health-insurance industry and other medical lobbies will be opposed, too, with doctors fearing that a single-payer system would bargain down their reimbursement rates. Even a relatively progressive state such as Vermont could not make a single-payer system happen.
You can think of current debates over health policy as a game of hot potato in which “who loses?” and “who pays?” are questions nobody finds easy to answer but also questions that no party can ultimately avoid.

After considering these points of view, I have reached the following conclusion: Krauthammer is right, Cowen is wrong. America will have a single-payer system before long. That’s because what Cowen (correctly) points out won’t matter in the long run. We will reach a tipping point, if we haven’t already, where too many people believe “government ought to guarantee” quality healthcare, as Krauthammer put it.

Now, Cowen rightly argues no one will want to pay for the consequences of this right, so any plan is ultimately unsustainable. My rebuttal is that this has never stopped us before. We will just find a way to create the mass delusion that each person is getting a free lunch at someone else’s expense. Whose expense? Who knows? Fill in the answer that makes you feel best and never-you-mind about those negative unintended consequences.

Look at other unfunded liabilities such as social security. People believe all kinds of delusional things about it. They believe the money they paid in was held somewhere and invested for them. (Let’s pause here for a hearty laugh!) They believe they can cash in on what the government (rightly) owes them while simultaneously believing the deficit is a serious problem someone needs to address somehow. They fail to understand social security is one of several government Ponzi schemes that are falling apart because the sucker money no longer funds the money being paid out.

But then you realize: It doesn’t matter! We’re the world’s #1 superpower. (Back-to-back world war champs!) We’ll just borrow or print as much money as we need to avoid the political pain of dealing with the reality of these situations. Imagine if Bernie Madoff had been immune to prosecution, owned a limitless credit line and had been given a license to print legal tender. He would have lived forever!

So will we do the same with healthcare as we did with social security? Absolutely! Cowen points out healthcare expenditures “are about 1/6 of GDP,” a huge number. You almost want to be worried. But does that really matter when you can run up an unlimited tab? I think not.

Bottom line: Krauthammer is absolutely right. Someday soon, we’ll have free healthcare for all. Who loses? Who pays? Someone in some hypothetical, apocalyptic future, so who cares!

OK, maybe I am being overly cynical. Maybe there is a way we can strike a balance between socialized medicine and free-market medicine. I am aware of at least one system (in Hong Kong) that seems to be achieving that, although I don’t know that it would work on our scale.

What are your thoughts?

Read surya’s response ->

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