With debate raging over federal tax reforms, health care has temporarily moved off center stage in U.S. policy debates. But with costs soaring, it won’t stay in the backseat long. Progressives will continue to promote the single-payer idea, with Senator Bernie Sanders and others advocating for “Medicare for All.”
The Affordable Care Act (ACA), also known as Obamacare, is a highly complex law and has made our current health care system more confusing. A single-payer system is attractive to many people because of its perceived simplicity – the U.S. government would provide direct health services to all Americans.
We already have two examples of a single-payer system in the U.S. The Veterans Administration (VA) health care system is a socialized, single-payer program. Taxpayers fund the system, hospitals are owned by the government, and providers are all government employees. Although the VA system has offered good health care to many veterans, we have learned that on balance the system is plagued with cost overruns, inefficiencies, and prolonged wait times for care.
The second example is Medicare, which began in 1965 and is a single-payer system for seniors, 65 years of age and older. Funding is through payroll taxes, premiums, and an ever-increasing percentage of money from federal general taxes. By 1990, spending in Medicare was seven times over the original budget. Medicare is not financially sustainable in its present form.
Like the VA system, Medicare has helped many people, but the cost of “Medicare for All” would devastate the overall economy. The non-partisan Committee for a Responsible Federal Budget (CRFB) analyzed Senator Sanders’ proposal from a financial standpoint. He calls for six new or expanded taxes. Everyone would pay 6.2% more in payroll tax and 2.2% more in income tax.
Higher-income workers would experience four additional taxes. Income taxes would increase, capital gains would be taxed as ordinary income, certain current deductions would be eliminated, and estate taxes would increase.
Even with these expanded taxes, the CRFB reports that multiple analysts, including the non-partisan Congressional Budget Office, find Senator Sanders’ calculations to be short by up to $14 trillion over 10 years.
Canada has had a single-payer system for over 30 years and its experience is revealing. Canadians are proud that every citizen has health insurance. From a cultural standpoint, the principle of universal coverage is a priority for the country. It also makes it easier for the citizens to overlook the problems within the system.
The demand for health care far outweighs the supply of care in Canada. Health care spending is now one of the greatest expenses for every province in the country.
The long wait times in Canada are not in the patient’s best interest and would not be acceptable for the vast majority of Americans. Health care rationing through waiting-lists is effective when supply is overwhelmed by demand. The question is whether government bureaucrats should have the authority to pick and chose what procedures patients receive and who should actually receive those treatments, while others are forced to wait for care.
Canada actually has a two-tiered health care system. Wealthy Canadians who do not want to wait for care and can pay cash, can and do receive treatment in the U.S.
Under a single-payer system, health care spending must compete with all other government activity for funding. This makes health care very political and subject to change with every new budget. It also forces each health care sector to compete with the other for limited money.
A single-payer system sounds like a simple solution to the U.S. health care problem. The reality is far different. Fundamentally, a single-payer system centralizes all health care with the government, is far too expensive, and limits access to health care by rationing. Instead of patients and doctors making key decisions, bureaucrats get to make those life and death choices about the kind and amount of health care people receive.
