The Case For Medicare For All

If there’s one thing America’s great at, it’s sucking at healthcare. We spend way more than other developed countries on healthcare and have worse health outcomes. The last major effort at reforming the healthcare system, the Affordable Care Act (ACA) of 2010, did somewhat improve access and outcomes, partially sealing the hole in the tub. Unfortunately, Donald Trump now tweets from the tub, so it’s cracking under an elephant’s pressure. Most consequentially, Trump repealed the individual mandate, a key feature of the ACA, in his 2017 tax bill.

The major accomplishment of the ACA, reducing uninsurance levels (which fell from 46.5 million in 2010 to 26.7 million in 2016), is slipping away. Since a low in 2016, uninsurance is on the rise again, up to 27.9 million in 2018. Uninsurance disproportionately affects low-income people (most uninsured people have family income below 200% of the federal poverty line). And it costs lives too, by one estimate over 30,000 annually.

With the 2020 Democratic presidential primaries underway, healthcare reform has taken center stage, registering as the top issue of voters and a frequent topic of debate. The major candidates have put forward varied proposals on healthcare reform, which have fallen into two distinct camps. Some sort of public option is the preferred path of the centrists (Joe Biden, Pete Buttigieg, Amy Klobuchar), while the progressives (Bernie Sanders and Elizabeth Warren) favor single-payer, although Warren’s commitment to this proposal is questionable.

On the grounds of both policy and politics, there really isn’t much of a competition between these plans: single-payer outranks any public option proposal. But before getting into why single-payer is better than a public option, what is single-payer and what makes it great?

The most well-known single-payer proposal in the U.S. is Bernie Sanders’s Medicare for All plan, which essentially calls for an upgraded version of Canada’s healthcare system. In short, it enrolls all U.S. residents in a single government insurance plan resembling an enhanced version of the current Medicare plan and pretty much eliminates private insurance.

Under Medicare for All, there would be no premiums, co-pays, deductibles, or out-of-pocket costs except for a maximum of $200 out of pocket for drugs. There would also be no networks, so patients would have much more freedom in choosing providers than under the current system. Medicare for All would mean universal coverage, better health outcomes, less paperwork, greater stability (no insurance churn), and more freedom (whether for workers no longer tied down by employer-based insurance or uninsured people who don’t have to worry about going bankrupt if they get sick). Whatever rationing of care occurs, a problem principally of funding rather than system design, will be based on level of need under single-payer rather than ability to pay as it is now.

The question of “How do you pay for it?” that inevitably attaches itself to seemingly any proposal that would benefit ordinary people actually reveals one of the best parts of Medicare for All. For one, while it would achieve universal coverage, insuring close to 30 million more people than are currently insured, Medicare for All could actually save the country money.

Studies on the economic impact of single-payer have reached conflicting conclusions, but there’s plenty of reason to think that the many suggesting net cost savings are the most accurate. For instance, while the prospect of increased use of healthcare leads some studies to score single-payer as a net cost to the system, other countries with single-payer have generally seen small or insignificant increases in utilization rates after implementation and unsurprisingly have lower overall healthcare costs than the U.S. In fact, Canada’s single-payer system—the closest international parallel to Medicare for All—achieves universal coverage with about 6% less of GDP than the U.S. spends on healthcare. Coupled with evidence from past coverage expansions in the U.S., this data suggests that higher-end estimates of utilization rates under a single-payer system are misguided and net cost savings are quite likely.

On top of the potential system-wide net cost savings, Medicare for All would redistribute the burden of costs upward. Take the case of employer-sponsored insurance, the method by which roughly half of Americans get healthcare coverage. As Berkeley economists Gabriel Zucman and Emmanuel Saez note, because they are both “quasi-mandatory” by law and essentially necessary, premium payments for employer-sponsored insurance are like private taxes. By combining these private healthcare taxes with public taxes, we get a picture of what it would look like if the U.S. funded healthcare through taxes like other developed countries largely do. We also find that the U.S. private/public tax system is currently quite regressive, with middle-class families paying the most in taxes as a percentage of income (around 40%) and the bottom 10% paying a higher percentage than the richest 400 Americans.

Medicare for All would get rid of private premiums, which effectively constitute a regressive tax called a poll tax, and replace them with formal, highly progressive taxes. As a result, most people would pay less for healthcare under single-payer than under the current system, with the wealthy shouldering a greater bulk of the burden. This restructuring of healthcare payments alone could cut poverty by over 20%. (If you’re interested in seeing just how effective single-payer’s redistribution of costs could be, TaxJusticeNow.org allows you to model the effects of replacing private premiums with taxes.)

Why is single-payer better than a public option? “Public option” is a loose term, so there’s not one public option plan to compare with Sanders’s Medicare for All single-payer plan. The Kaiser Family Foundation in fact lists six different public option-esque plans proposed in the House during the 2019-2020 congressional session. But a few general things can be said about how public option proposals stack up against single-payer on policy grounds.

Even the most robust public options would retain some private insurance competing with the public plan. At best, then, a public option would maintain insurance churn, meaning less stability than single-payer, and would miss out on some of the greater efficiencies of single-payer due to more complex administration. By allowing rich people to opt-out and purchase better coverage, a public option would also lack the equality inherent in having everyone on one plan.

At worst, a public option could fail to guarantee universal coverage or perhaps even barely lower uninsurance levels. Moreover, public option proposals that keep cost-sharing measures in place would offer much less financial freedom than single-payer.

If the policy argument for a public option doesn’t hold much weight, what about the political argument? Again, since there are plenty of different public option proposals, with different levels of political viability, the question most worth addressing here is “Why not push for Medicare for All?” Public option advocates point to the difficulty of pushing Medicare for All through a gridlocked, non-progressive Congress and to the possibility of public backlash due to the disruption that Medicare for All would entail.

Given obstructionist Republicans, the political viability of Medicare for All hinges on sufficient Democratic backing and control of the government. Thus, the first point to note with regard to passing the plan through Congress is that the House version of Sanders’s Medicare for All bill is currently co-sponsored by the majority of House Democrats, meaning it has more than double the co-sponsors of the most popular public option bill. The groundwork for the passage of a public option, therefore, hasn’t been laid in the same way as it has for single-payer.

Electing a president (i.e. Bernie Sanders) who staunchly supports single-payer would put massive pressure on all Democrats to fall in line behind the plan. It’s worth remembering that the current House version of Medicare for All has about double the Democratic co-sponsors the 2015-2016 congressional session version had, and that’s just after a strong progressive challenge to the establishment candidate in the 2016 presidential primary and a few new progressives winning seats in the House.

A couple more considerations strengthen the case for advocating directly for Medicare for All. First, basic negotiating logic dictates aiming high rather than low. Settling for a public option without first trying for Medicare for All is absurd by this logic. After all, advocacy for Medicare for All has already reoriented the party, making a public option the current compromise position.

Second, Medicare for All, which garners majority public support, would be an excellent central plank of a popular progressive agenda that could secure long-term Democratic control of the government. The potential public backlash cited as a concern by public option advocates due to hiking taxes and switching people’s insurance plans seems pretty surmountable given that both the status quo and a public option would cost more and deliver less than Medicare for All and, in the long run, cause more people to lose their insurance. Plus, tax hikes could be fairly minimal if single-payer cuts costs effectively. Furthermore, the collective buy-in generated through Medicare for All’s universality would likely make the program durably popular and difficult to cut, similar to Social Security and Medicare.

The past electoral success of an economically progressive Democratic platform reinforces the idea that a powerful progressive wing could remedy insufficient near-term Democratic support for single-payer with progressive victories in future elections. Remember, during the 36 years from FDR through LBJ, before Democrats underwent a neoliberal transformation, the Democratic Party held majorities in Congress for all but four years and the presidency for all but eight. In 2016, after decades of centrist control of the party, Democrats held “fewer elected offices nationwide than at any time since the 1920s,” and promptly lost that year’s presidential election to a clown. If anything, a progressive agenda with Medicare for All at its center would boost Democrats’ public support, facilitating increased Democratic power and better prospects for such an agenda’s passage.

For years, a national health insurance program was, in a sense, the unfinished business of the New Deal. The furthest Democrats made it in the decades following Harry Truman’s failed attempt to pass national health insurance legislation was Medicare and Medicaid. Not long after the passage of these programs, the Democratic Party swung rightward, the New Deal order crumbled, and progressive economic goals were largely removed from the table.

Finally, there’s a popular progressive agenda on offer more sweeping and inclusive than the New Deal itself, with Medicare for All positioned at its heart. With Bernie Sanders, the current frontrunner for the Democratic nomination, along with a growing number of legislators, unapologetically championing this agenda, its chances of passing look better and better. So the question is: Why back down when we have a real shot at winning?