Almost every other industrialized nation has it. 43 million uninsured Americans wish they had it. Our businesses are less competative because we don't have it.
The time has come for Congress and the President to initiate legislation making Medicare available to all citizens, young and old. Known as "single-payer health insurance," Medicare For All would instantly solve one of the worst problems our country faces: an almost unworkable health care system with spiralling costs that now sees over 43 million Americans with no health insurance at all.
This will be a two-part article. Part one rebuts the arguments made by pharmaceutical companies, health insurance companies and libertarians against Medicare For All. Part two rebuts anecdotal attacks against single-payer health plans in other nations.
Since Lyndon Johnson signed it into law in 1965, our nation's senior citizens have been covered by a phenomenally successful single-payer health plan called Medicare. Before then, only about 50% of citizens over age 65 were covered by health insurance; today about 97% of our older citizens have insurance. Almost from its inception Medicare has been efficient and reliable. Medicare represents the best our government can do, and the program is almost universally respected among the populace.
If Medicare works so well and almost everyone enrolled is happy with it, doesn't it make sense to make the program available to all citizens? After all, everyone agrees that having almost one-sixth of the citizenry uncovered by any health plan at all is a travesty.
Well, the health insurance industry and Big Pharma don't quite see it that way. The current system serves them just fine, thank you; health care is big business in this country, and business is good. Top health care executives garner multi-million dollar salaries and millions more in stock options. They fly in private jets and own multiple vacation homes. To say they have a vested interest in the status quo is a vast understatement.
Their arguments against Medicare For All almost always boil down to three issues: first, they claim Medicare isn't really more efficient than the current system. Second, that Medicare For All would result in fewer choices and a substandard health care system. Finally, they argue Medicare For All would be too expensive.
In 2006 the Council For Affordable Health Insurance (CAHI), an advocacy group comprised of most of the nation's health insurance providers, published a white paper by Dr. Merrill Mathews entitled Medicare's Hidden Administrative Costs (pdf. file here). This paper is based in part on a study published by Mark Litow of Milliman, Incorporated, a consulting firm that delivers health insurance plans, investing plans and employee benefits plans for businesses.
Leaving aside the fact that, given their financial interests, neither CAHI nor Milliman, Inc. can be expected to be impartial in their analysis, let's look at the claims in Dr. Mathews' white paper. One of the arguments often put forth by advocates of Medicare For All is the program's legendary efficiency; most claim that just two or three percent of all Medicare outlays are administrative, whereas for-profit insurance firms typically spend 20 to 30 percent for administration. Mr. Litow says that, contrary to popular belief, Medicare's legendary efficiency is overstated (he says it's 5.2%), and for-profit inefficiency is overstated (he says it's 16.7%). We'll come back to those numbers in a moment.
Dr. Mathews further claims that Medicare should appear more efficient because the average yearly claim amount for a Medicare recipient is $6,600, while a private insurance recipient receives just $2,700 per year. Thus the administrative costs per dollar paid should be lower for Medicare.
Dr. Mathews then goes on to make the bizarre claim that private insurance administrative costs actually add value for the consumer, because much of those costs involve a closer scrutinizing of claims and a subsequent denial of coverage (about how this helps health care consumers I haven't the foggiest notion).
Therein lies the rub: much of the higher administrative costs associated with for-profit health insurance involve the one thing most people hate about private health insurance: in their drive for profits, insurance companies consistently deny coverage to people that their own doctors think they need.
In addition, private insurance companies further enhance their profits by excluding patients with pre-existing conditions, shunting them to far more expensive plans, or off the rolls altogether. No wonder their administrative costs are higher: they reduce claims by only taking healthy people, and when those healthy people do happen to get sick, they deny them coverage.
O.K., let's get back to the numbers. The insurance industry's advocacy group claims the current system works just fine, even though, by their own numbers, administration of Medicare is 11.5% more efficient. In other words, if we had Medicare For All, we'd immediately save 11.5%. Maybe I'm crazy, that sounds like a compelling argument to throw out the entire for-profit system and make Medicare available to everyone.
The second argument, that consumers won't have any choice under Medicare For All, is patently ridiculous on its face.
Private schools didn't disappear with the advent of public education. People who can afford it and choose to do so still send their children to private school. But they also understand why it's important to contribute tax dollars towards public education: an educated and productive citizenry is advantageous for society as a whole.
Likewise, Medicare For All would neither destroy the private health insurance industry nor lead to fewer choices for consumers. People who can afford it and choose to do so could buy private plans. But people would come to realize funding Medicare For All benefits society for the same reason they support public education: a healthy and productive citizenry is also advantageous for society as a whole.
Finally, the cost issue. Most estimates are that it would cost about $1.86 trillion dollars per year, at least initially, to begin offering Medicare For All. Of this, the federal government already spends about %852 billion on Medicaid, Medicare and a host of other health care programs, so we need to find about a trillion dollars per year to institute Medicare For All. Eventually those costs would come down somewhat, provided the Federal Government was given the power to negotiate drug prices with the big pharmaceutical companies.
Also, the 43 million uninsured cost us proportionally more than they should because they often don't seek preventative treatment and, when they are treated, it's usually in an emergency room, which costs more. Still, most experts say premiums will be in the $90 to $120 per month range -- far less than most people currently pay for their private plans.
The group Physicians For a National Health Plan (PNHP) have come up with this plan to raise the money for Medicare For All. It involves employee contributions and employer contributions (albeit at a far lesser level than most employees and employers currently contribute under our for-profit system), and a variety of taxes, mostly on the top 5% of wage earners.
Having said this, I think I've come up with an alternative funding plan -- not just for Medicare For All but for a host of other programs I think we need to Fix America. I will detail that funding plan in Step 10 of my 10 Steps, but I'll give a hint: in also involves asking the rich to accept a much more progressive tax program than is currently in place. After all, the rich got rich primarily because of the vast infrastructure that is the American economy; it seems only fair they contribute proportionally greater sums back to that infrastructure.
Medicare For All is, above all, a moral imperative. Basic health care services should be a universal human right. The time has come for the most powerful economy on the face of the earth to cover the health care of its citizens.
Next: Exploding the anecdotal myths about single-payer in other industrialized nations.
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