The American healthcare system is broken. We spend around twice as much on healthcare as other industrialized countries — over $10,000 per person on average annually. Given this massive level of spending, one would expect an exceptionally generous system. Instead, the U.S. stands alone in the industrialized world as the only country to routinely deny its citizens access to healthcare.
Nearly 10% of Americans lack any health insurance; millions more are unable to afford their medical expenses. Even most people who have insurance remain on the hook for massive and unpredictable out-of-pocket costs, and hospitals, ambulances, and prescription drugs come with sky-high price tags. This has devastating effects on the lives of working people: approximately 530,000 people annually are pushed into bankruptcy due to healthcare costs, and tens of thousands lose their lives every year because they lack insurance.
It’s no surprise, then, that healthcare consistently polls as a top issue for voters. Progressives, like Bernie Sanders, usually support a program called “Medicare For All,” whereas more moderate candidates like Joe Biden and Pete Buttigieg support a “public option.” But in order to assess our menu of policy solutions, it’s important to understand the problem: how, exactly, has the system failed us?
For one, the U.S.’s health insurance landscape is extremely complex and fragmented. Instead of having a single government program to cover everyone’s healthcare costs, as exists in Canada, Americans must navigate a patchwork of overlapping insurance programs, some public and some private, most fairly ungenerous and equipped with bundles of red tape.
Most Americans have private insurance as a benefit through their employer. Companies that provide insurance to employees pay a percentage of the monthly “premium” payment to the insurance company, and the remainder is billed to the employee. Insurance companies subsidize medical costs, but most individuals still pay co-payments (“co-pays”) to fill prescriptions and receive care — a ritual completely foreign to our Canadian neighbors. Additionally, some insurers may not pay for anything at all until an employee reaches their “deductible,” meaning until they spend a certain amount out of their own pocket on healthcare costs. Deductibles are often on the order of thousands of dollars.
If an employee loses their job, they will likely lose their insurance with it. If they’re poor enough at this point, they may qualify for Medicaid, a government insurance program for low-income and disabled people. If they don’t qualify for Medicaid, they are welcome to buy their own private insurance plan from the individual marketplace, in which patients pay premiums directly to insurance companies without assistance from an employer. The 2010 Affordable Care Act, also called “Obamacare,” created a subsidized individual marketplace in which insurance plans are slightly less expensive and more comprehensive. Despite this palliative reform, 30 million Americans are still without health insurance. The only options remaining are finding a good job, becoming poor enough to receive Medicaid, or staying healthy until turning 65 and enrolling in Medicare, the government program for seniors, without getting sick or injured in the meantime.
Not only does our byzantine healthcare system allow millions of people to fall through the cracks, it makes life unnecessarily difficult for the majority of Americans that do have insurance. If an individual with insurance wants to see a doctor, they’ll have to check to make sure that the doctor is “in-network” — whether their specific insurance plan covers this specific provider. The same goes if they want to purchase a prescription drug, undergo a procedure, or purchase healthcare in any way. Top-shelf insurance plans allow nearly unrestricted access to providers and medical services; less expensive plans leave patients with limited options. If an employer decides to change the insurance plans offered to employees, their in-network options can change completely and patients may lose access to their doctors. Even if a provider or procedure is ostensibly in-network, private insurance companies are notorious for finding excuses not the foot the bill. This is only rational given that their function is not to provide quality care to all, but to turn a profit — the imperative driving all private economic actors in any capitalist economy.
This brings us to perhaps the most urgent problem with our healthcare system: everything is obscenely expensive. We pay over 60% more for knee replacements than Canadians; twice as much for the average surgery; and ten times as much for a vial of insulin. At every level of our system, healthcare industries are ripping patients off, and the federal government does virtually nothing to regulate costs. Prescription drug manufacturers jack up the prices of life-saving drugs, hospitals charge absurd rates for routine procedures, and insurance companies set lofty premiums and then deny care to patients when they need it most. Our healthcare system serves private industries at everybody’s expense.
Senate Bill 1129, or the Medicare for All Act, would do away with this oppressively dysfunctional system. By abolishing private insurance in this country, and expanding Medicare to automatically cover every citizen and permanent resident in the country, it would achieve universal coverage while shielding patients from prohibitive healthcare costs. The program would cover virtually all healthcare needs, including medically necessary services like routine vision care, dental care, hearing aids, and home care, which are not covered by Medicare today. Patients would no longer have to pay premiums, co-pays, or deductibles to go to the doctor — the government would be the sole payer of medical bills, hence the term “single-payer.” In short, Medicare for All (M4A) is a simple way to achieve universal coverage while shielding patients from prohibitive healthcare costs. Despite its detractors’ hyperbolic claims, M4A is not “government-run healthcare” — patients would still go to existing (and new) clinics and hospitals to receive medical care, two-thirds of which are already non-profit. Only private, profit-seeking insurance firms would be cleared away.
Perhaps M4A’s loudest critic in the 2020 presidential race is former McKinsey consultant Pete Buttigieg. In his plan, “Medicare For All Who Want It,” Buttigieg proposes a “public option,” a government health insurance program similar to Medicare that would compete with private plans. Employers and individuals would have the option of buying into the public plan or sticking with private insurance. Under Buttigieg’s plan, individuals may be automatically enrolled in the public option or eligible for subsidized insurance depending on income level, state of residence and employment status. Virtually all public option plans include some sort of premium and deductible, and charge co-pays to patients; conversely, M4A would all but eliminate out-of-pocket costs and make healthcare free at the point of purchase.
Proponents of “Medicare For All Who Want It” including Buttigieg often argue that the government should not impose a single insurance plan on the whole country; that a public option is preferable to M4A because it would achieve universal coverage while leaving people a choice. It’s important to note that while public option plans would expand coverage to millions of uninsured Americans, they are unlikely to achieve universal coverage as their proponents claim. Joe Biden released his public option plan in July and bragged that it would cover 97% of Americans, meaning nearly ten million people would remain uninsured. Buttigieg’s plan is very similar and would likely do the same.
Buttigieg’s appeal to “choice” is also misleading. A public option would leave multiple insurance programs from which to choose, but would preserve a status quo in which these choices are usually made by employers, not individuals. If a public option were implemented successfully, many employers would opt into the public plan without giving their workers a choice of any kind — perplexingly, the exact outcome that public option proponents say we must avoid.
A public option could also limit patients’ ability to choose their doctors and healthcare providers — a choice that Americans value far more than their ability to choose insurance plans according to recent polling. Rather than simplifying our convoluted insurance system by creating one universal plan, it would throw yet another program into the mix, condemning patients to navigate the ever-changing maze of in-network and out-of-network providers until the day they die. Worse yet, a public option could lead to a two-tiered healthcare system in which expensive private plans offer wealthy patients priority access to quality providers, while low-income people are pushed onto the second-rate government program. Choice is actually a major benefit of M4A — with all Americans on the same program, no provider could deny patients care on the basis of their insurance plan or economic class, and patients could from the full array of providers.
Joe Biden’s most frequent critique of M4A is its enormous price tag, which he claims would bankrupt the country. He’s right that M4A would increase federal government spending, but that doesn’t mean it would increase overall costs on a national or individual basis. A single-payer system would shift revenues away from private plans, which are funded by premiums, and onto the federal government, which is funded by taxes. Most plans to finance M4A include progressive taxation, meaning rich people and large corporations pay more and take some of the burden off of small businesses and working class people.
As for overall costs, a single-payer system would reduce national healthcare spending in ways that a public option could not. First of all, it would ensure that no one goes without health insurance. This, in turn, would decrease hospitalization rates, as fewer people would feel the need to wait to get something checked out in order to save money. Preventative care is simply cheaper, and safer, than emergency care. Second, if Medicare were the only major buyer of medical goods and services, they could negotiate down prices of prescription drugs and other services — companies would have nobody else to sell to. Third, M4A would simplify the billing process for providers, as they would no longer have to devote time and energy to battling with insurance companies and processing payments from various plans that all reimburse at different rates. Finally, M4A would do away with the private insurers that profit off of healthcare, whose business model is based on charging as much as they can and paying for as little as they can get away with — a moral victory.
Last year, single-payer’s cost-effectiveness was confirmed by, of all sources, a right-wing think tank called the Mercatus Center. They found that, despite expanding health insurance to 30 million more Americans and providing comprehensive healthcare benefits to every person in the country, M4A would cost us $2 trillion less than the current system over ten years. This clearly refutes the claim that M4A is “unaffordable,” as Biden warns — it would actually save us money. Meanwhile, the current system imposes massive costs on working people and pushes thousands of families into bankruptcy every day. No one asks how we can afford to pay for the status quo because everyone already knows the answer: we can’t.
This line of reasoning demands a serious caveat: just because M4A would give the government the ability to lower costs does not mean that they would necessarily take advantage of this power. Medicare has the ability to negotiate drug prices right now, but doesn’t. In some cases, the federal government goes out of its way to keep drug prices absurdly high, including by protecting domestic drug manufacturers from foreign competition. You can probably guess the reason for this: drug companies and other healthcare industries have enormous influence over our political system.
The success of any healthcare reform depends on the political allegiances of those designing it, and their willingness to challenge the healthcare industry. When progressive candidates like Sanders and Warren tout their refusal to raise money from corporate executives, it’s more than just cheap posturing; when Buttigieg and Biden host fundraisers with pharmaceutical industry lobbyists, it’s more than just a bad look. Both are implied policy commitments.
A generous public option would improve our healthcare system in numerous ways, and it’s certainly a program worth fighting for. But right now, there’s no need to settle. Both M4A and Medicare For All Who Want It are opposed by the healthcare industries, and both would require a powerful political movement to pass. If we want to mobilize grassroots support for political change, we must offer more than a half-measure. Solving our healthcare crisis means fundamentally restructuring our dysfunctional system to serve the interests of the American people. This is the promise of Medicare for All.