Richard Quinn | Jan 8, 2019
SOME PEOPLE SEE Medicare-for-All as the utopia for health care, resulting in lower costs, higher quality and universal coverage. Others see M4A—a common shorthand for Medicare-for-All—as destroying health care in America, with total control residing in the hands of government bureaucrats.
Neither assessment is correct. Consider eight points:
- Every health care system in the world has problems. Each system struggles with rising costs driven by factors like aging populations, development of new drugs and new medical technology, and the impact of poor individual lifestyle choices.
- There is no such thing as “free.” Whatever the system, you pay for health care through some combination of out-of-pocket costs, insurance premiums and taxes.
- Whether it’s actual insurance or a government plan, the majority are going to subsidize the minority. A tenth of American families account for 50% of health care spending in a given year, while half of families account for just 5% of spending.
- To say one system doesn’t work is misleading. Different systems in developed countries around the world work reasonably well for their populations, with each nation’s citizens accepting the benefits, costs and constraints.
- Measuring health care outcomes is complex. Some systems do better in one area and worse in others. The reasons go beyond the system for delivering and paying for care, and include factors like lifestyle and obesity. It isn’t accurate to say less or delayed health care always leads to bad outcomes. Recent data shows life expectancy declining in the U.S. Is that our health care system’s fault—or is it the result of the causes typically mentioned, including opioid abuse and suicide?
- Changing health care systems would create losers as well as winners. A single-payer system would likely be funded through some combination of taxes, premiums and co-payments. Workers who have the bulk of their health care paid for by their employer may see higher net costs, while Americans who today pay 100% of their insurance premiums may find they’re better off.
And, of course, a tax-funded system would likely be progressive in some manner. That means those with higher income would likely pay more than others—something that’s not the case with private health insurance.
- The assumptions used can greatly impact projected costs under different health care systems—and yet such assumptions are hardly reliable. Even Medicare’s actuaries note the difficulty in making projections, given the many variables.
One example: If a new U.S. system included no out-of-pocket costs at the point of service, would demand for services increase? Could such demand strain the delivery system? If the system cut fees paid to health care providers, as has been proposed, would providers respond by leaving the system?
- Once implemented, any system will face the challenge of controlling costs. Even if a new system in the U.S. realizes a measurable reduction in costs upon implementation, it’s uphill from there. How will costs be managed? We can look to systems in other countries for possibilities.
But unlimited, unrestrained access to health care—as some fans of M4A expect—is not among the possibilities. Every system puts some control on usage. Other national systems apply direct limits. In the U.S., we constrain demand indirectly—through a combination of limits on insurance coverage and the price mechanism.
Clearly, there’s a growing frustration with the current U.S. system. Surveys show that 70% of Americans support Medicare-for-All. But many Americans are also confused about what a single-payer system means. For instance, in a recent survey, 47% of respondents believed they would be able to keep their current insurance under such a system.
We are years away from a major change in the U.S. health care system—years likely filled with heated rhetoric and contentious debate. It’s crucial for Americans to keep their eyes wide open, rather than accepting some appealing promise out of frustration.
Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous blogs include Saving Ourselves, Required Irritation, We’re Stuffed and Clueless. Follow Dick on Twitter @QuinnsComments.
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Out of frustration of the present system something radical could be implemented even if it is not well thought out or equitable. As it is now those on medicare are well taken care of at the expense of everyone else and most of the recipients don’t even know it. There could be a reckless reckoning if costs between age classes are not more balanced like the ACA was originally intended to do.
When the flood insurance program was nationalized in 1978 they projected savings of $14 to $15 million dollars. Currently the flood program is insolvent in the amount of around $24 billion dollars. (Someone was slightly off on their projections.) Flood insurance is actually a very, very simple program. Health insurance is much more complicated. If we do something, I hope our projections are a little more accurate.