As the health care debate continues in Washington, one fact has become increasingly apparent. Americans don’t want to go back to the bad old days being proposed by Republicans. They don’t want to live in a country where one-in-six citizens lack health coverage, where rural hospitals struggle to survive, and where insurance companies routinely deny coverage for pre-existing conditions.
By the same token, Democrats can hardly take comfort in the Affordable Care Act. It’s a half-measure at best, that only got us halfway to the goal of universal coverage, and failed to get America’s unprecedented health care cost spiral in check.
We can do better, by taking the most successful aspect of the ACA— the Medicaid expansion— and extending it to the entire population under age 65. Medicaid is the most efficient health insurance system in the country, costing about 22 percent less per beneficiary than private insurance. And its cost per beneficiary has increased at an average annual rate of just 4.1 percent over the past 30 years, compared to 6.9 percent under the private insurance system. At the same time, Medicaid provides comprehensive coverage with much lower deductibles than is typical of private insurance.
And Medicaid is a well-run and well-established program, providing health care benefits to more than one-in-five Americans already.
Extending Medicaid to the 29 million Americans who remain uninsured as well as the approximately 160 million Americans currently covered by employer-based or other forms of private insurance, would cost a lot of money— likely close to one trillion dollars per year. But before dismissing the idea as too costly, consider that we currently spend a combined $1.125 trillion a year for Medicare, Medicaid, and veterans hospitals. Indeed, nearly half of all Americans are already covered by a government-run health insurance program, and those Americans express high satisfaction with the experience. To suggest that covering the other half of Americans, who are mostly working age and reasonably healthy, would create some kind of implosion of the health care system is nothing more than scare tactics by special interests that benefit from the inefficiencies in the current system.
The move to a single-payer system, such as Medicaid, would be a boon to most U.S. businesses, which have increasingly struggled to fund health insurance for their employees and are forced to compete with foreign companies that benefit from the low cost of funding similar single-payer systems in their own countries. Such a transition would certainly be a boon to the 29 million Americans who currently lack health insurance coverage. And it would provide better coverage than all but the most generous of employer-based insurance policies. In other words, the benefits would be enormous and widely shared.
Certainly, such a transition would require a funding mechanism, but the new taxes needed to pay for a full Medicaid expansion would be significantly less than what a huge majority of Americans currently pay for private insurance premiums, big deductibles, and other out-of-pocket health expenses. A modest payroll tax, similar to the funding mechanism for Medicare, would cover the bulk of the cost.
Medicaid would provide an excellent system of basic coverage, which Americans could supplement if they desired, just as many Medicare recipients do.
Keep in mind, a transition to a single-payer system does not mean that your doctor will work for the government or that some government bureaucrat will decide what care you receive. The only change for health care providers is who they bill for their services, and single-payer will save them considerably on administrative overhead because they won’t have to deal with dozens of different private insurance companies and their byzantine billing practices.
Imagine no longer having to worry about going without health coverage if you lose your job. Imagine having the freedom to start your own business without worrying how you’ll pay for health insurance.
Would there be complications? No doubt. Some health care providers would resist the lower reimbursement rates offered by Medicaid. Some critical access hospitals and clinics, such as those in Cook and Ely, would probably need additional funding, just as they currently receive under Medicare. Health care is complicated to be sure, but a single-payer system could significantly reduce the complication, provide significant efficiencies, and provide universal coverage in the U.S. for the first time. If there’s one thing that the current debate over health care has demonstrated, it’s that the alternatives currently being offered in Washington don’t measure up to the benefits of single-payer.