Politics & Policy

No to Single-Payer

Sen. Bernie Sanders introduces the “Medicare for All Act of 2017” on Capitol Hill, September 13, 2017. (Yuri Gripas/Reuters)

Fifteen Democratic senators have signed on to a universal-health-care bill introduced Wednesday by independent Bernie Sanders. Dubbed “Medicare for All,” the bill is light on specifics, but it constitutes an undisguised proposal to nationalize health care. The most important consideration is that single-payer is a bad idea that would cede control of one-sixth of the American economy to the government.

Senator Sanders’s arguments are heavy on populist bromides. He says the path toward single-payer ought to be straightforward, and sinister corporate interests are the only obstacles standing in the way. But the truth is that a plan like his would threaten people’s existing coverage. While insurance companies certainly want to stay in business, the fundamental roadblock to single-payer is not that politicians are beholden to them. It’s that many Americans are satisfied with their current coverage and would like to keep their doctors.

A true single-payer plan, one that replaces the panoply of available private insurance plans with just one offered by the government, would obviously infringe upon their liberty to choose their own health-care arrangements. President Obama sought to allow Americans to keep their existing plans with his Affordable Care Act and, infamously, failed. And Sanders’s plan represents a far more drastic assault on the market than Obamacare did. While Obamacare implemented onerous regulations on insurers and required citizens to purchase insurance, it did not in the end fundamentally transform the health-care system. “Medicare for All,” by contrast, would expand Medicare to cover people of all ages within four years, and effectively phase out private insurance by forbidding employer-based coverage to offer the same benefits as the government.

Weaker iterations of single-payer try to evade the problem by allowing people to keep their coverage, at least initially: Consumers can buy in to the public system if they so choose, but are not forced into it. But for the public plan to be workable, it would have to attract consumers. And to attract consumers, the system would have to be made attractive. That costs money.

Indeed, any single-payer plan, whether it forces citizens to participate or permits consumer choice, would be colossally costly. It’s no surprise, then, that Sanders’s plan is thin on details. The plan he introduced during the 2016 election would have inflated the federal budget by trillions of dollars, necessitating a massive tax hike — and not just on the rich. This time around, the senator is not willing to say how much he’d raise taxes. That’s for good reason.

Two of the country’s most liberal states make for instructive cases. California’s legislature, where Democrats have supermajorities in both houses, recently considered a single-payer plan only to balk when the price tag was calculated to be more than double the state budget. Vermont’s legislature actually passed a single-payer plan three years ago. The state abandoned Green Mountain Care, however, when it came time to actually appropriate funds for the program. Advocates of single-payer tout its supposed popularity among Americans, but these blue-state lawmakers, and properly designed polls, have found that it becomes less attractive when its realities are laid bare.

Nationalizing health insurance would have further destructive consequences, creating a system governed by political rather than market incentives. A single-payer system would devote resources to people who are mildly sick. It could well be popular, as many people would have positive experiences. But the investment of capital spurred by economic incentives has made the American health-care sector the most innovative in the world. While those innovations do not offer immediate political rewards, they benefit those with more-serious ailments, especially over a longer time horizon. Despite the rhetoric of its supporters, single-payer is not the more humanitarian approach.

That Democrats are moving in its direction is dispiriting, but predictable. Our health-care system was flawed when Obama came along, and Obamacare made it worse. People still can’t purchase cheap, renewable catastrophic coverage for themselves thanks to the law’s regulations, and there have been loud demands to fix the system.

Such a fix could be accomplished with reforms designed to cultivate a functioning marketplace, removing regulations on the types of plans companies can offer while keeping tax credits in place for Americans who need assistance. Democrats, however, prefer the alternative of direct government control. If we don’t move toward the first, we will continue to drift in the direction of the second. That would be unfortunate in the extreme.


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