Does Single-Payer Have Legs?

In anticipation of the “unveiling” of his proposed legislation implementing a federally administered single-payer system for the United States, Vermont Sen. Bernie takes to the pages of the New York Times with an op-ed promoting the plan:

The transition to the Medicare for All program would take place over four years. In the first year, benefits to older people would be expanded to include dental care, vision coverage and hearing aids, and the eligibility age for Medicare would be lowered to 55. All children under the age of 18 would also be covered. In the second year, the eligibility age would be lowered to 45 and in the third year to 35. By the fourth year, every man, woman and child in the country would be covered by Medicare for All.

Needless to say, there will be huge opposition to this legislation from the powerful special interests that profit from the current wasteful system. The insurance companies, the drug companies and Wall Street will undoubtedly devote a lot of money to lobbying, campaign contributions and television ads to defeat this proposal. But they are on the wrong side of history.

Guaranteeing health care as a right is important to the American people not just from a moral and financial perspective; it also happens to be what the majority of the American people want. According to an April poll by The Economist/YouGov, 60 percent of the American people want to “expand Medicare to provide health insurance to every American,” including 75 percent of Democrats, 58 percent of independents and 46 percent of Republicans.

This will mark the first time in 40 years that any member of Congress has introduced legislation implementing a federal single-payer insurance system and the most ambitious reform to our health care system introduced in more than a half century. It will be interesting to see the details of the plan, particularly its assumptions. Not unexpectedly, opposition to the plan is already emerging. At the Wall Street Journal William Galston remarks:

In May 2016, the Urban Institute—not previously known as a hotbed of conservatism—released its analysis of the Medicare for All proposal Sen. Sanders offered during his presidential campaign. The study found that if the plan were enacted into law, the federal government would absorb the bulk of the current spending by states, localities, employers and households. Federal spending would rise by $2.5 trillion in the plan’s first year, and by $32 trillion over the first decade.

A parallel study conducted by the bipartisan Tax Policy Center found that Mr. Sanders’s revenue proposals would raise only $15.3 trillion over the first decade, leaving a gap of $16.6 trillion between expenditures and revenues. “The proposed taxes,” the Urban Institute observed, are “much too low to fully finance the plan,” and “additional sources of revenue would have to be identified.”

I supported a single-payer system for more than 20 years but as health care costs rose I came to question our willingness or ability to pay for such a plan. Most proposals for a single-payer system assume that substantial efficiencies of administration will be realized over our present system in which about 30% of health care spending is administration. Nearly all such proposals exaggerate the efficiencies that can be be realized and more recently I’ve come to doubt that efficiencies substantial enough to pay for the plan without tax increases which few will be willing to bear can be realized. The experience in the United Kingdom, France, or Germany is just not relevant here. We pay more for education than any other country in the world, more for defense than any other country in the world, and more per mile to build highways than any other country in the world despite these programs being “single-payer” systems for practical purposes. IMO government-run programs are more expensive here than in France because that’s the way we roll.

In addition I believe that supporters of “Medicare for All” would be prudent not to make claims they can’t back up. Sen. Sanders already does that in his op-ed by conflating a right to health care insurance with a right to health care. It may be true as some have claimed that you cannot obtain health care without insurance but it is definitely true that even with health care insurance you may not be able to receive care.