The Democratic presidential candidates’ debates on health-care policy have been pretty incoherent. I don’t blame the candidates; it’s virtually impossible to explain these ideas in one-minute bursts, with moderators pushing them to fight with one another. The best most listeners can come away with, I suspect, is that some of them (Sens. Bernie Sanders, Elizabeth Warren and Kamala D. Harris) want to implement a version of reform that’s a lot bigger than some of the others (former vice president Joe Biden and Sen. Amy Klobuchar).
So let me try to clarify the issues under debate and suggest a way forward that ties these two camps together. There’s an important complement: They share the same goal, they both pose a steep challenge to the status quo, and it will take both arguments to achieve their goals.
The goal is a good place to start, because it’s simple and we can work backward from it to understand the logic and policy ideas on offer from both sides. That goal is to allow Americans to access affordable, comprehensive coverage that’s reliably there when they need it. The urgency of this goal is underscored by new information out last week showing that uninsured rates, which were plummeting because of the Affordable Care Act, are rising again, thanks to the Trump administration’s long campaign to sabotage the program.
The candidates who support single-payer, or Medicare-for-all, think the best way to achieve this goal is to have the government be the sole insurer. To be clear, this isn’t the British system – the National Health Service – where most (not all) health care is delivered through a government provider, i.e., doctors are government employees (our veterans hospitals also work this way). It’s closer to Canada, where the government is the major insurer but providers are private.
The more incremental approach advocated by Biden and others leaves the private insurance system in place but adds an option for more people to get covered through the public sector. Importantly, Biden’s public option is accessible to many more people than the one you may have heard about back when the Obama administration was contemplating this addition (disclosure: I was Biden’s chief economist).
Keep in mind that about one-third of Americans have government-sponsored coverage, mostly Medicare and Medicaid, so the build-on-what-we-have advocates are not starting from scratch.
But why the fireworks between the two groups? There are many workable ways to achieve the goal of comprehensive, affordable coverage, and they’re not all single-payer. Some countries (Switzerland, Germany) have private insurers, doctors and hospitals, but they heavily regulate every aspect of the system to keep costs down and access up. But nobody has a system like ours, where most coverage is private, and the sector is lightly regulated compared with those in other countries.
This is a dysfunctional combination. Health care is not a “normal good,” such as apples or laptops (or Apple laptops). First, it’s an essential service to which we all need access. Some will, of course, need it more than others, but we can’t know who in advance. Second, most of us don’t have the technical knowledge to be informed shoppers. For all the touting of consumer choice in health care, everybody I know does pretty much what their doctor tells them to do, especially in critical situations. Third, there are negative spillovers to the rest of society if sick people don’t get treated.
When you combine these factors with for-profit insurers and providers, you get a system that spends about 6.5 percent of GDP more per year (about $1.4 trillion) than other advanced economies, with worse results, especially for those with moderate and low incomes. The Democratic candidates deserve credit for pointing out facts like these as motivations for reform. But they do a disservice when they suggest that this massive chunk of change can be easily rechanneled into a more progressive system.
Behind that antiseptic number is a large, powerful system of stakeholders who will go anything but gently into that good night. What we call waste or “rents” (excess profits), they call salary. Moreover, here are two related facts: Along with the most inefficient health sector among advanced democracies, we’ve also got the most money in politics.
And yet resistance is not futile. Though the health-care lobby working alongside congressional conservatives was initially able to block Medicare, the logic of providing public coverage to retirees in an economy where most insured working-age people got health care through their job eventually won out.
So, with all this as background, let’s go back to the debate (and for now, suspend the reasonable view that not much of consequence will be legislated no matter who wins).
The go-big reformers think the savings from cutting out all the health-care-delivery middlemen with their hands in the more than $1 trillion cookie jar could be applied to providing cheaper yet better coverage to those who lack it. Though they don’t always say it out loud, they know people will have to pay more for coverage through the tax system. But because we’d be spending less on health care than we are now, their income after (higher) taxes and (lower) insurance premiums will be higher.
The other camp doesn’t see how we can seamlessly accomplish two parts of the bolder agenda: cut out the millions of players benefiting from the current system while moving 55 percent of Americans from private to public coverage. You can say they lack imagination, but I share their skepticism. Trust me, I get the logic of single-payer. I just don’t get how even a functional Congress with a progressive majority (which is to say, a Congress very different from the one we have) leapfrogs from where we are to a single-payer system.
But that’s not game over on reform. To the contrary, it’s game on! The idea, one that’s perhaps more powerful than it sounds, is to embed a public system alongside the private one and let a lot more people opt into it. The cookie-jar-feeders will oppose this too, because they know it will increasingly encroach on their model and their profits.
But the political strategy is to make this the fallback position from going directly to single-payer, which is why the two sides of the Democrats’ argument are complementary. If the political stars should align to allow progress in health-care reform – granted, a big if – the fight for single-payer could create an opening for a robust public option.
One reason this hasn’t happened so far is the Democrats’ bad habit of negotiating with ourselves. We start with the fallback and end up falling back even further. Instead, those of us who want to build on the progress we’ve made should effusively thank the single-payer advocates for broadening the debate.
This approach is surely disappointing to those who want to go right to single-payer, but the logic of the model eventually gets you there. A workable strategy needs to recognize where we’re starting from.