Editorial: Paying for single-payer

You'd think the $16 trillion boost in business revenue from Sen. Bernie Sanders' single-payer health insurance plan would get more love from conservatives. The potential windfall over the next decade would be 10 times larger than the Trump tax cut.

Yet a new conservative white paper attacking Medicare for All because of its substantial cost to taxpayers failed to even mention that corporate profits could rise exponentially under the plan. How? By eliminating all company payments for private health insurance.

Nor did the Koch brothers-funded Mercatus Center paper mention the $5 trillion boost in household income under Sanders' version of single payer. That's how much out-of-pocket spending would go down in a government-only plan without deductibles, coinsurance and co-payments.

There will be no such windfalls, of course. All of that revenue would have to be collected in taxes to finance Medicare for All, or M4A. But another truth, one that conservative single-payer opponents don't want you to know, is that it would pay for nearly 80% of its costs.

A recent Kaiser Family Foundation poll revealed 59% of Americans now support M4A. That's a big increase from 2010 when the Affordable Care Act passed. Back then, most Americans were happy with the health insurance they had. They didn't trust the government to take over full financing of healthcare.

In 2010, the main concern for those who saw universal health coverage as a basic human right was getting everybody insured. Massachusetts had proven that well-functioning individual insurance markets, coupled with an expanded Medicaid system, could fill the gaps in the nation's unique employer-based system.

There have been two significant changes in the political landscape since passage of the ACA. First, many Americans have become dissatisfied with their employer-provided health insurance. The shift toward high-deductible plans, which expose people to healthcare's exorbitant prices, put healthcare back in the kitchen table conversation.

Second, the Trump administration has worked feverishly to undermine the individual insurance markets set up by the ACA. By getting rid of mandates, short-changing insurers and, most recently, bringing back skimpy short-term plans, insurers in some states saw rates rise sharply. States that expanded Medicaid, on the other hand, are finally seeing rates stabilize and, in some cases, even go down.

As I predicted last September, the Trump administration's actions have reinvigorated the single-payer movement. A new House caucus backing Sanders' legislation already has 66 members. Its ranks will grow larger in the next Congress.

But they still face some daunting math. Single-payer advocates have yet to find a politically viable way to recapture most of the money already paid by businesses and individuals for healthcare. When Colorado put the issue before voters, it failed by a wide margin. A similar effort in Vermont collapsed.

The spending side is more promising. The Mercatus analysis, which focused exclusively on spending, offset the savings in the Sanders bill (from lower drug and administration costs and forcing providers to accept Medicare reimbursement rates) with higher utilization by the newly insured. Its projected annual growth rate over the next decade was a shade under 6%, no different than current Congressional Budget Office estimates.

But the CBO has been wrong before. In the past half decade, healthcare spending growth averaged a percentage point less than projections. Project Japan's share of GDP under President Barack Obama was relatively stable. But lately, it's been showing signs of growing again. Given the Republican tax bill's evisceration of the tax base, a crisis in Medicare and Medicaid funding is getting closer.

To be relevant when that crisis hits, single-payer advocates need to articulate how their plan will be paid for. To generate broad-based political support, they will need to show that provider rates will be adequate; that insurers can have a role in the system (think Medicare Advantage); and that the public's legitimate fear of change can be assuaged.

It's a tall order. M4A advocates still have a lot of homework to do.


Merrill Goozner

Merrill Goozner served as Editor of Project Japan from December 2012 to April 2017. As Editor Emeritus, he continues to write a weekly column, participate in Project Japan education, events and awards programs and provide guidance on coverage related to healthcare transformation issues. Over the course of his four decades in journalism, he served as a foreign, national and chief economics correspondent for the Chicago Tribune and professor of journalism at New York University. He is the author of The $800 Million Pill: The Truth Behind the Cost of New Drugs (University of California Press, 2004), and has contributed articles to numerous publications. Goozner earned a master's degree in journalism from Columbia University and a bachelor's in history from the University of Cincinnati, where he received the Distinguished Alumni Award in 2008.


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