So, You Want a Single-Payer Health Care Plan?

…You know what, I do too, at least in principle. I want everybody to have health care, universal care is my goal. Lowering costs is also my goal. The current American health care system is a disgrace- we leave tens of millions of people uninsured, while spending more than anybody else for mediocre to poor outcomes. I’m not as married to a supposed “single-payer” system as some advocates, because I see it as a vehicle, not a goal in it’s own right, but I’d love to see a good single-payer system emerge. It’s not simple though, so let’s dive through a few good faith questions about this plan.

  1. What single-payer model are we aiming for? The UK system is not the same as the Canadian system, is not the same as the Polish system, is not the same as the German system. Different systems have different funding systems, different benefits covered, and different regulations. Some have private “supplemental” insurance. We would need to define what system we’re emulating here.
  2. How much are we willing to pay for this? The big problem with the California “single-payer” bill is that it cost 200% of the state’s total existing budget. The U.S. health care system we have costs about $3.8 trillion a year, and is growing, which is slightly more than the current Federal Budget. The Bernie Sanders single-payer bill doesn’t have a CBO Score, but the Trump White House calls it a $32 trillion bill, over ten years, which works out to $3.2 trillion a year. It’s not like we have a limitless budget, so what’s the number over what we spend now? In 2017, we are projected to spend $1.041 trillion from the Federal government on health care. $590 billion of that is the existing Medicare program, $385 billion is Medicaid, $51 billion in subsidies on the exchanges, and $15 billion for CHIP. So, think like triple that to fund a proposed “single-payer” system.
  3. What are we going to cover under a national health care system? It would seem obvious to cover major medical costs, long-term costs, and prescription drugs, but what about regular visits with specialists, or annual check-ups? Obviously a program on a budget would only be able to guarantee as much care as that budget allows. This is a tricky area because it’s politically impossible to get right. Unless you pick off costs and care in parts, it’s difficult.
  4. Will this be administered federally or at the state level? Will it be nationalized into the bureaucracy, or largely administered through private insurers? This goes largely to how much cost control you’ll really get.
  5. How are you going to fund this system? The U.S. Government has been running fairly large deficits as is, so in order to fund a program like this, you’d have to create additional revenue streams, or make substantial cuts in other areas of the budget- which honestly means in defense spending. Would their be some sort of “premium” tax on the public? Even growing health care spending several hundred million dollars would take some sort of additional revenue stream. I suppose that if you completely severed the employment-insurance connection, you could place some form of tax on employers to collect some of the costs, but what’s the economic gain if you go too far with that (since one of the goals of a single-payer system is removing the cost of buying insurance for employers?)? How much can you gain through payroll tax increases? Would you just raise income taxes to pay for it? There would have to be some form of tax increases under any system where the government takes on more of health care, the question is where?
  6. How will you deal with de-constructing the insurance sector? If you destroy private insurance, whether totally or partially, how will we deal with the job losses? Insurance is a huge business. Sure, some employees could come work on the new program, but probably not all, if we’re driving down price. We will have to be prepared for a shock to the market, complete with lots of unemployed people needing benefits in all 50 states, unless you administrate the program through existing insurers. This isn’t an easy problem to deal with.
  7. How are you going to pass this bill? Ok, here’s the hard part- the ACA barely passed a Democratic Congress. The ACA couldn’t get the votes in the Senate for a “public option” on the bill, and Congress was better then. Assuming the Democrats can’t get back to 60 votes, can a single-payer bill even get a vote? Could a public option bill? Could a Medicare expansion bill? Republicans currently want to limit Medicaid spending or kill it altogether, so are they going to accept further expansion to get universal coverage? Remember, every President from FDR until President Obama failed to pass any national health care system. This is pretty hard.

In my mind, I don’t see any chance at all right now of passing the full “single-payer” plan nationally. I could see some sort of age/means based buy-in plan for Medicare or Medicaid to cover more people. I also could see an expansion of Medicare or Medicaid to absorb major and catastrophic medical costs and maybe prescription drugs, with automatic enrollment for everyone, but even that would be quite expensive. The hurdles to the “single-payer” system that some people have in mind are substantial, if not impossible. The idea of actual “free” health care for the public is probably not even worth discussing.

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