Finance

Paying For Single-Payer Medicare For All: Financial Messaging For Kamala Harris And Other Democratic Candidates

We’re already paying for Medicare for all, and then some. We’re just not getting it.

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(Photo by Mason Trinca/Getty Images)

Senator Kamala Harris had a pretty nice start to her presidential campaign. She even got some rare praise from the president, who said she had “the best opening so far.” The little speed bump seized on by the commentators came after she discussed ending private health insurance in favor of a single-payer, Medicare for all system. Let’s help Senator Harris steamroll right over that criticism.

Soft Transition To Medicare For All Could Placate Risk Aversion Voters And Highlight Cost Messaging

Unsurprisingly, people who already have health insurance like having health insurance. It’s classic loss aversion psychology. You have something that keeps you from dying alone and miserable in the streets, you don’t want to give up that thing, even when you’re promised something better.

This loss aversion fear bears out pretty clearly in the single-payer opinion numbers. A Reuters-Ipsos poll released last year found that 70 percent of Americans support a single-payer, Medicare for all national health insurance plan. That even included 51 percent of Republicans. In a survey from the Kaiser Family Foundation a few months before the Reuters-Ipsos poll, Republican voter support for Medicare for all reached 64 percent if it was “open to anyone who wants it but people who currently have other coverage could keep what they have.”

A softer transition to a truly single-payer system could help bolster support for the plan by allowing people who so choose to “keep what they have.” If Medicare for all (who want it) works like it’s supposed to, the remaining private insurers would likely be starved out of the marketplace anyway within a few years. The continued existence of private insurance for a time would also give proponents of Medicare for all a good messaging opportunity to respond to the ever-present right-wing criticism that we would never be able to afford a single-payer system, by comparing single-payer to how we pay for healthcare now.

U.S. Already Pays More For Healthcare Than A Better Single-Payer System Would Cost

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The response to the question, “How are we going to pay for Medicare for all?” — and I cannot emphasize this enough — is that we are already paying far more than Medicare for all would cost for a vastly inferior product. So we take the money we are wasting on our current garbage system, redirect as much of it as is required to a better system, and pocket the savings.

We pay more for healthcare than any of the many countries that have successfully implemented a single-payer system, and have far worse health outcomes. A Bloomberg analysis from last year put our neighbor-to-the-north Canada’s annual healthcare expenditures at $4,508 per capita, or 10.4 percent of GDP. Norway, which is a relatively big spender on healthcare, footed $7,464 per capita, or 10.0 as a percentage of its GDP. Japan spent just $3,733 per capita at 10.9 percent of its GDP. All of these countries have some version of single-payer, and all of them dramatically outperform the U.S. in health outcomes. Meanwhile, the United States spent $9,536 per capita on healthcare, a staggering 16.8 percent of our GDP, with our mostly private-insurer health system (the Census Bureau reported that as of 2017, 67.2 percent of the insured population had private health insurance coverage and 37.7 percent had government coverage, with employer-based insurance being the most common type of coverage overall, covering 56 percent of the population).

Here’s where the messaging comes in. How does your healthcare get paid for now in our inefficient garbage system?

First, a big premium goes to your health insurer. Your health insurer skims a bunch of profit out of that, and then uses some of it to actually pay for a little part of your healthcare. Just imposing the same health insurance premium amount as a tax and using the whole sum to fund single-payer healthcare would be intuitive and relatively simple, just like John Snow’s also-resisted 19th Century healthcare revelation not to store human waste in the drinking water supply. If you have employer-provided health coverage and you want to “keep what you have,” your employer can go on paying your private insurance premiums, but it also has to pay the same amount as a tax to cover the employees on the new public plan. Easy. Employers who do not currently provide health coverage should also be taxed, being as how it is their workers continuing to be alive that allows them to keep making a profit.

Second, we currently pay for some healthcare ourselves with a gordian combination of copays, deductibles, coinsurance, and whatever else they want to call you just reaching into your pocket (the existing Medicare system includes a lot of out-of-pocket costs too; many could be eliminated). We could impose an individual tax on people commensurate with the out-of-pocket costs, but how about we just make the exorbitantly wealthy pay for that part through one of the several wealth tax proposals floating around out there and/or AOC’s modest 70 percent marginal tax rate on people who earn/exploit-the-labor-of-the-rest-of-us-to-obtain more than eight figures a year? We all good with that? Good.

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Third, right now we pay for healthcare for some members of our society by hospital emergency departments eating the cost to begrudgingly take care of health problems for the indigent, by society bearing the brunt of medical bankruptcies, and through already-existing government subsidies. You can’t really tax those things, but driving down healthcare costs and forcing healthcare providers to begrudgingly eat more costs would certainly be part of any all-American single-payer plan.

Seemingly Outrageous Sticker Price Touted By Single-Payer Opponents A Comparative Bargain

A bunch of pundits freaked out last summer when a libertarian policy center claimed their study found that Medicare for all would cost $32.6 trillion over 10 years. Even if that result wasn’t wildly biased, so what? We already spent $3.5 trillion on healthcare in 2017. Go ahead and multiply that by ten, I’ll wait.

Kamala Harris and the rest of the Democratic field deserve praise for unifying behind some form of universal health coverage, but they all need to step up their responses to the right-wing lie that there’s no possible way we could ever pay for single-payer. We’re already paying for Medicare for all, and then some. We’re just not getting it.

Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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