WU Political Review
The Case for Medicare for All Conor Smyth
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f there’s one thing America’s great at, it’s sucking at healthcare. We spend way more than other developed countries on healthcare and have worse health outcomes. The last major effort at reforming the healthcare system, the Affordable Care Act (ACA) of 2010, did somewhat improve access and outcomes, partially sealing the hole in the tub. Unfortunately, Donald Trump now tweets from the tub, so it’s cracking under an elephant’s pressure. Most consequentially, Trump repealed the individual mandate, a key feature of the ACA, in his 2017 tax bill. The major accomplishment of the ACA, reducing uninsurance levels (which fell from 46.5 million people in 2010 to 26.7 million in 2016), is slipping away. Since a low in 2016, uninsurance is on the rise again, up to 27.9 million in 2018. Uninsurance disproportionately affects low-income people (most uninsured people have family income below 200% of the federal poverty line). And it costs lives too, by one estimate over 30,000 annually. With the 2020 Democratic presidential primaries underway, healthcare reform has taken center stage, registering as the top issue of voters and a frequent topic of debate. The major candidates have put forward varied proposals on healthcare reform, which have fallen into two distinct camps. Some sort of public option is the preferred path of the centrists (Joe Biden, Pete Buttigieg, Amy Klobuchar), while the progressives (Bernie Sanders and Elizabeth Warren) favor single-payer, although Warren’s commitment to this proposal is questionable. On the grounds of both policy and politics, there really isn’t much of a competition between these plans; single-payer outranks any public option proposal. But before getting into why singlepayer is better than a public option, what is single-payer and what makes it great? The most well-known single-payer proposal in the U.S. is Bernie Sanders’s Medicare for All plan, which essentially calls for an upgraded version of Canada’s healthcare system. In short,
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it enrolls all U.S. residents in a single government insurance plan resembling an enhanced version of the current Medicare plan and pretty much eliminates private insurance. Under Medicare for All, there would be no premiums, co-pays, deductibles, or out-of-pocket costs except for a maximum of $200 out of pocket for drugs. There would also be no networks, so patients would have much more freedom in choosing providers than under the current system. Medicare for All would mean universal coverage, better health outcomes, less paperwork, greater stability (no insurance churn), and more freedom (whether for workers no longer tied down by employer-based insurance or uninsured people who don’t have to worry about going bankrupt if they get sick). Whatever rationing of care occurs, a problem principally of funding rather than system design, will be based on level of need under single-payer rather than ability to pay as it is now. The question of “How do you pay for it?” that inevitably attaches itself to seemingly any proposal that would benefit ordinary people actually reveals one of the best parts of Medicare for All. For one, while it would achieve universal coverage, insuring close to 30 million more people than are currently insured, Medicare for All could actually save the country money. Studies on the economic impact of singlepayer have reached conflicting conclusions, but there’s plenty of reason to think that the many suggesting net cost savings are the most accurate. For instance, while the prospect of increased use of healthcare leads some studies to score single-payer as a net cost to the system, other countries with single-payer have generally seen small or insignificant increases in utilization rates after implementation and unsurprisingly have lower overall healthcare costs than the U.S. In fact, Canada’s single-payer system—the closest international parallel to Medicare for All—achieves universal coverage with about 6% less of GDP than the U.S. spends on healthcare. Coupled with evidence from past coverage
expansions in the U.S., this data suggests that higher-end estimates of utilization rates under a single-payer system are misguided and net cost savings are quite likely. On top of the potential system-wide net cost savings, Medicare for All would redistribute the burden of costs upward. Take the case of employer-sponsored insurance, the method by which roughly half of Americans get healthcare coverage. As Berkeley economists Gabriel Zucman and Emmanuel Saez note, because they are both “quasi-mandatory” by law and essentially necessary, premium payments for employersponsored insurance are like private taxes. By combining these private healthcare taxes with public taxes, we get a picture of what it would look like if the U.S. funded healthcare through taxes like other developed countries largely do. We also find that the U.S. private/ public tax system is currently quite regressive, with middle-class families paying the most in taxes as a percentage of income (around 40%) and the bottom 10% paying a higher percentage than the richest 400 Americans. Medicare for All would get rid of private premiums, which effectively constitute a regressive tax called a poll tax, and replace them with formal, highly progressive taxes. As a result, most people would pay less for healthcare under single-payer than under the current system, with the wealthy shouldering a greater bulk of the burden. This restructuring of healthcare payments alone could cut poverty by over 20%. (If you’re interested in seeing just how effective single-payer’s redistribution of costs could be, TaxJusticeNow.org allows you to model the effects of replacing private premiums with taxes.) Why is single-payer better than a public option? “Public option” is a loose term, so there’s not one public option plan to compare with Sanders’s Medicare for All single-payer plan. The Kaiser Family Foundation, in fact, lists six
