No Reason to Demonize US Single-Payer Health

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Bloomberg

No Reason to Demonize US Single-Payer Health

by
John F. Wasik

It's time to stop kicking sand in the face of single-payer health care. It may be the strongest solution around to insure every American at a lower cost.

After decades of industry campaigns against this model -- dubbed by its critics as "socialized" medicine -- it's important to stop whining and evaluate the many economic benefits. Health care is a fundamental human right.

If President Barack Obama wants real change in American health care, he will have to get over the fear of even mentioning single-payer concepts. At his health-care summit last week, only the threat of a demonstration garnered late invitations for Oliver Fein and Congressman John Conyers, two leading proponents of the single-payer plan.

Health-care costs have become a crippling personal-finance burden for 45 million uninsured and 25 million underinsured Americans. Those outside of the fractured employer-based system are only one illness away from financial ruin.

Lose your job and most likely your health coverage will disappear unless you want to pay exorbitant rates. And it's getting worse. Because of the growing jobless rate, some 14,000 Americans are losing their coverage daily, according to the Center for American Progress Action Fund.

A single-payer plan would cover everybody regardless of employment situation and save money by cutting out middlemen.

$400 Billion

Fein, president of Physicians for a National Health Program, said a single-payer program would offer $400 billion in annual administrative savings and provide "effective cost containment provisions such as bulk purchasing and global budgeting."

Obama has said he would keep an open mind on health-care solutions. Yet when asked on March 5 about why he was against single-payer medicine, White House spokesman Robert Gibbs replied: "The president doesn't believe that's the best way to achieve the goal of cutting costs and increasing access."

The mainstream media have similarly been sheepish about touching the subject.

Most media outlets covering last week's summit didn't even mention the idea of a single-payer proposal, according to Fairness and Accuracy in Reporting, a New York-based group.

While Obama's team has strategically avoided backing a specific proposal, under the administration's 2010 fiscal year budget outline, the burden for whatever plan that emerges will be shared by creating a $634 billion pool.

New Levies

Letting Bush-era tax cuts expire on the 2.6 million highest- earning Americans and imposing new levies on corporations and oil companies will pony up some funds needed for a national plan. The preferential tax rate on capital gains and dividends would be raised to 20 percent from 15 percent.

Even when employers cover most medical expenses, workers are paying an increasing share that isn't financed by personal-income growth. Premiums for employer-sponsored health care have risen four times faster than workers' earnings since 1999.

-- Since 1999, average premiums for family coverage have climbed 119 percent, according to the Kaiser Family Foundation, a non-profit that tracks health-care issues. Out-of-pocket contributions for workers have more than doubled in that period.

-- Employers are asking more from employees and covering less. More than 93 percent of workers with family coverage need to contribute to the total premium.

-- Without universal health-care, the number of uninsured will rise to 54 million from 45 million today over the next decade, according to the Congressional Budget Office.

-- Every 30 seconds, someone in the U.S. files for bankruptcy because of their medical bills. An estimated 18,000 Americans die each year from lack of insurance.

Grace Period

How would market economics work with a single-payer model? Legislate a grace period in which Americans would have a choice between private plans and the expanded Medicare buy-in model.

In a "Medicare-for-all" program, care would be publicly financed and privately delivered. You would keep your own health- care providers and hospital. The government wouldn't dictate who your doctor is or choose your hospital. It would be acting more like a huge purchaser bargaining for the best treatment and drugs at the lowest price.

Of course, you would have to level the playing field by eliminating health-care tax deductions for employers and give every individual a tax credit.

There would be a national market and regulation for health policies and no one could be denied affordable coverage. No more "cherry-picking" of only the healthiest people and rejection of the sickest or those with chronic conditions.

Working Model

A good working model would be the National Health Insurance Act, which was introduced in 2007 by Conyers, a Democratic representative, and had 93 co-sponsors in the 110th Congress.

Neighborhoods and communities are imperiled when health-care expenses drive everyone to economic ruin. More than 1.5 million families lose their homes every year to foreclosure due to medical bills.

The urgency is there, but the Obama team needs to get even more aggressive if it wants to craft a fiscally sustainable program. Medicare earnings limits and subsidies for drug companies and managed care should also be on the table.

If Congress doesn't act soon, the fiscal and social sacrifices in the future will be draconian.

Single-payer haters don't like the idea of seeing who will provide the highest-quality, low-cost coverage and will do anything to shut down the discussion. But let's at least put this free-market comparison to the test.

John F. Wasik, co-author of “iMoney,” is a Bloomberg News columnist.

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