We’re all aware of the drama that surrounded the oft-promised “repeal and replace” of the Affordable Care Act, known as Obamacare. Last year, following the late-night vote rejecting the last of the Republican proposals, many calls for bipartisan action emerged. Small-scale proposals started to come forward. Unfortunately, none of those dealt with the fundamental issues facing health insurance in this country – with one exception: A single-payer health insurance system, referred to as “Medicare for All.”
“Medicare for All” bill has recently come back into the news, as a paper by the Mercatus Center found that under the plan, the US would save roughly $2 trillion over 10 years. Controversies surrounding fact-checking the paper and its findings abound.
While the answer may not be the simple expansion of the Medicare program as-is to all people, the efficacy of a single-payer system remains. If enacted, it would guarantee that everyone would be covered with comprehensive health insurance; would reduce costs by an estimated 24 percent, saving $829 billion in the first year; and would save insurance costs for 95 percent of the population.
Before getting into some of the details, a few statistics will demonstrate why such a move is necessary.
- Every comparison to other developed economies shows that they spend anywhere from half to a third of what we spend on healthcare. The OECD reports that in 2012 (latest figures available) the US spent $8,508 per capita on health; Canada, $4,522; France, $4,118; and Sweden, $3,925 – to name a few.
- This may not be an issue if the health outcomes were significantly better. Nope. In 2014, the Commonwealth Fund ranked the United States last of 11 developed countries in health outcomes – the first 10 all had single-payer systems and spent half or less than the U.S.
- Even with the Affordable Care Act, while coverage improved, there were still 31 million people (10.9 percent) without health care coverage. We, the taxpayers, wind up paying for their health care through higher insurance premiums and the increased use of the high-cost emergency room facilities.
- Ultimately, our current system is unsustainable. Health care spending is $3.42 trillion dollars out of a total GDP of $18.6 trillion, and is projected to reach 20 percent of GDP by 2022.
It is no wonder there is universal agreement that something has to be done. Why single-payer?
Well, the starting point is a belief that health care is a human right. And every other developed country that guarantees that right has found that a single-payer system is the most cost-effective way to provide it.
In the U.S. we already have a single-payer system for those over 65 – Medicare. It is a public, universal plan that costs less than private insurance, and provides better financial security, and studies have shown that Medicare is preferred by patients. It is paid for through taxes instead of insurance premiums.
While the rights’ argument might be enough for some, there are some very hard-headed reasons for a single-payer system.
- First, cost savings. It is estimated that moving to single-payer would save on the order of $829 billion which would be achieved by eliminating these costs: eliminating Federal subsidies and tax credits would generate $260 billion per year; bringing insurance admin costs to Medicare levels would save another $201 billion; replacing hundreds of payers with one reduces admin costs for the health care providers by $221 billion; paying the same price for prescription drugs as in Europe and Canada would save another $116 billion; and finally, eliminating the need for employers to manage health benefits would save $32 billion annually.
- These savings could fund universal, comprehensive coverage for every resident; would eliminate co-pays and deductibles; and would still provide fair compensation for physicians and hospitals.
- So, the trade-off is higher taxes but no insurance premiums which would reduce costs for 95% of the population. What would disappear are insurance company profits and high drug prices which is why there is so much opposition to this type of plan.
- On a personal note, I lived in Canada for a number of years and was covered by their universal, single-payer health care plan. I did not experience the criticisms of single-payer systems and Canadian data supports that for the country as a whole.
- There were no long lines or rationing of care. In some cases, generally for elective surgery or imaging, there were some waits.
- When the program was first introduced in Canada there were the predictable cries about “socialized medicine”, similar to what we hear from certain quarters here. I’m not sure what that refers to as single-payer only refers to health care insurance, not healthcare delivery. Doctors don’t work for the government and can remain out of the system if they choose; hospitals remain in private hands; and you get a free choice of doctors and hospitals.
Many in Congress are arguing that the country can’t afford a single-payer plan, that such a plan would bankrupt the Federal government. Instead we have more than 30 million people uninsured and a high percentage of personal bankruptcies due to uninsured medical costs. While it is true that Medicare is facing fiscal challenges, those challenges pale in comparison with the private insurance and drug industries and the spiraling costs of health care discussed earlier.
Here is my test: Ask anyone on Medicare whether they would prefer to go back to either private health insurance or have no coverage. Defense rests.