I would assume I am one of your more conservative readers. Here's what scares me about single payor and what the Republicans will message to death of Democrats push it: They want to make it illegal for you to have private health insurance. They want the government to have a monopoly on healthcare. etc.
As I said, I'm moderately conservative, and I'm actually FOR universal health care and I am very persuadable depending on the specifics of the proposal-- and there are many different ways to get there. I agree that it should be universal and preferably portable and not tied to employment. However, single payor is a full government takeover which crowds out all choice and is therefore simply a nonstarter. I'm not at all persuadable on that and I would prefer the current system. This would be the functional equivalent of making private schools illegal and demanding that all children attend public schools only. I've been wrong before, but I cannot imagine that would fly in this country...
He doesn't want to rock the boat. Employers are free to raise their employees' salaries by how much they take out of their overall compensation to pay for healthcare (in my personal case, 36% of my overall compensation goes to health insurance) and let them use the money to buy into the public option. But they have to stop offering health insurance as a benefit.
Great article Marc, and I totally agree with you that our goal should be increasing coverage, period, and that we should apply political pressure to achieve any individual policy that would get us closer to that goal. I think a big pitfall is being overprescriptive on specific policy, and we all too often in this debate we somehow let perfect be the enemy of the good (see: you are literally killing people if you don't support immediate universal 100% government provided healthcare).
Honesty, pragmatism, and ambitious goals good politics make.
We've got to talk more about deductibles as part of this conversation. If you have an insurance plan with a $3,000 deductible, you don't actually have insurance unless you've got $3,000 to spend, and you'll be just as reluctant to go to the doctor as if you didn't have insurance at all. There's a difference between efficiently rationing care, and inducing people to put off dealing with legitimate health problems as long as they can.
I understand that deductibles can offer flexibility when they're chosen, but if you're forced to buy insurance, can't afford a high premium, and get stuck with a high deductible as a result, then the same lack of funds that pushed you toward the low-premium/high-deductible plan then keeps you from meeting the deductible and having your insurance actually reimburse your costs like insurance is supposed to do. This seems to be a common outcome with Obamacare, and it's a result of aiming to boost insurance enrollment without caring enough about whether the insurance is really usable.
> If you have an insurance plan with a $3,000 deductible, you don't actually have insurance unless you've got $3,000 to spend, and you'll be just as reluctant to go to the doctor as if you didn't have insurance at all
Two things here:
- This is how “insurance” works! Someone paying predictable monthly payments for you isn’t real insurance, it’s just someone paying for things for you. Health insurance programs of course do this, but only catastrophic health insurance is actually insurance, and it’s probably confusing things that we use this word for what’s actually, like, a healthcare subscription.
- On my plan at least, there’s still cost sharing below the yearly maximum, so having insurance always makes things cheaper at the start of the year. But the HDHP setup is pretty silly, it’s pointless that they give you fake HSA money so they can charge you fake HSA money for a prescription I can’t optimize out of my life.
A lot of health care expenses are unpredictable, well under the catastrophic "I got hit by a bus" level. Something like a broken leg or an animal bite that gets infected chew up a lot of money in an unavoidable way that puts you on the hook for several hundred or a couple thousand dollars, and in that situation, insurance isn't helping you one bit if you have a high deductible.
High deductibles seem like a way for companies or the government to say "well, you/we can't/don't want to pay a high premium, but you need insurance, so here's 'insurance' with a low premium that only picks up costs after you pay a few thousand dollars out of pocket." Something like banning deductibles would take away this dodge, and while, yes, it would take away some consumer choice, we also have laws around usury and unfair contracts that do the same sort of thing.
To be clear, I'm not complaining about cost sharing or co-pays, I'm taking issue with the "you pay everything until you spend $X, then plan covers X%" framework. In an emergency situation, this leads to a sudden unpredictable expense - the kind of thing insurance is supposed to prevent - andn in a situation where you have some flexibility, it pushes toward you not getting that weird cough or pain checked out sooner.
HSAs like you mention do help avoid this, but it's bizarre that the system is set up in such a way that it makes sense for an employer to pick a plan with a high deductible and then separately reimburse you for expenses that apply to the deductible. And as you point out, all the "consumer-driven" stuff implies that health care consumers are easily able to scale back their consumption, when in fact stuff like "prescription I need to live" is something you can't consume less of.
I guess this is as good a place as any to toss out an idea I've had rattling around in my head for a few years now. The basis for it is the fact that we already have in the US working examples of both single payer (Medicare, Medicaid) and socialized medicine (the VA). My suggestion is to establish pilot programs that allow a small portion of the general population to enroll in those programs, measure the results and slowly expand them as warranted.
It could work like this: we pass a bill that provides a little bit of seed money to expand the capacity of the VA and cover more people in Medicare and Medicaid. Let's say for starters we expand each by 1% or so. Then we allow the public to apply to any or all of them, with the understanding that if they are accepted they will pay a monthly premium that roughly matches the government's average cost per user (which of course would vary between the 3 programs). Then we run a lottery to choose which applicants get the extra slots provided by the 1% expansion. Then we study the spending and outcomes of both the winners and losers of the lottery. If the winners are getting better care at lower cost (which we should expect) then we do another small expansion of the program and bring more people in. Rinse, repeat.
Ideally, you would structure such a program so that it automatically grows as long as there are more applicants and the outcomes of current participants are good. Maybe you put it on an accelerating path, so once we figure out the system works in the first few years it starts growing faster. If necessary you can add a few points of margin onto the premiums so that each group pays for the next expansion. And obviously some subsidies would have to be in order for lower-income applicants; that's true of really any approach to healthcare given US inequality, and hopefully the ACA subsidies can simply be applied so we can sidestep controversy on that point. Similarly we emphasize the research aspects of the program (this is not a huge rework of the healthcare system!) and the fact that it is 100% voluntary (nobody is being forced to change their insurance!) and that it only grows to the point that more people want in.
Obviously this is the barest outline of a plan. And I just threw 1% initial expansion out there; maybe 5% or 0.2% makes more sense. But the bottom line is that if it was carefully structured and well run, such a plan could eventually get us to a point where anybody who wants socialized medicine or single-payer (at two price/benefit points!) has that option.
It's just the beginning of an idea; poke some holes in it for me...
Good post, thanks Marc! I have often thought that Noah Smith's idea of extending the existing Medicare system to everyone would be a good compromise between the status quo and Bernie Sanders proposal which in some ways is more generous than the health care system of any OECD country.
There are also some ways that the expansion would not have to be entirely tax paid, for example having companies and individuals pay into existing Medicare though the end call should be for Medicare to be available to all.
“Part of fighting for [Thing A] means trying to recruit allies rather than expel heretics, and that in turn means displaying a little more precision than you sometimes see from the [Thing A] movement.”
The problem with the past decade or so of Progressive politics in a nutshell.
Large employers like offering healthcare benefits because it’s good for hiring. (This is the entire appeal of working at Starbucks.)
For small employers I’m sure some like it and some are run by petit bourgeois who just aren’t giving benefits in the first place.
It would actually help people like Matt who want to become sole proprietors the most, I think. That might be why the EU has fewer large tech companies since it’s natural enough to do software as a sole proprietor if you have healthcare
This is a very bad take overall, and not in keeping with the rigorous "what does the data actually say, even if Twitter doesn't like it" brand that was what convinced me to subscribe to Slow Boring.
For goodness sake, this is advocating straight Medicare-For-All, Bernie-style, and then ignores that "Medicare-for-all that involves eliminating private health insurance companies" polls at -21 points!
As far as I can tell, the popularity of the phrase Medicare-For-All comes from people assuming that it's Medicare-For-All-Who-Want-It (Buttigieg-style), not Medicare-For-All-Even-If-They-Want-To-Keep-Their-Current-Insurance (Bernie-style).
We *just* had a primary about this. If private insurance eliminationists can't win the argument in a Democratic primary, they can't win the argument in a general election.
The job mobility point is a big one that advocates should get behind. This is a way to win the moderate right.
As a business owner (feels terribly cliche conservative to say that), I want nothing more than to get out of the healthcare game forever! I don't want to know or be a barrier to my employee's healthcare. It's a ridiculous idea that I have to think about that, and causes a litany of supreme court cases (Hobby Lobby?) that shouldn't happen. This is a butterfly effect where past tax policy dictates the current equilibrium.
Beyond that, this is an argument that works with the honest, non-hyenas of the right wing. There are few left, but I hope that Mitt Romney and Susan Collins (or better yet their younger counterparts) can appreciate the idea that employers should have NOTHING to do with health insurance.
That said. If you told me that New Jersey was unveiling a single-payer system run by the state, I would be forced to vote against it. In principle, all for it. But, their administration would render it inoperable, and thus forcing a right wing backlash. This is why good governance is so critical to these initiatives. In this way, we need to consider being more like Switzerland. Single payer system, but we involve the private providers to do the delivery. This still requires good governance, but takes the technological and operational burden off the government, something I know they can't handle at the moment.
I think the biggest issue in government supporting health insurance is that ACA premium subsidies fall off a cliff to zero at about $70k family income for a 2 person family. The unsubsidized premium isn't really an option for a couple earning less than ~$120k. That gap covers a lot of self-employed, gig-workers, small business owners and small business employees. Solving this should be as simple as extending the subsidy on a tapering basis till it disappears at say $140k. You won't cover many more people this way -- those people are still getting insurance somehow -- but you will address a real middle-class pain point and neutralize a huge GOP talking point about helping working families. If you go extending Medicare for all or beefing up Medicaid without addressing this issue, the complaints of clientelism would be justified.
The Mayor Pete option plus medicaid expansion sounds like the best options. Let's look for ways to make this a state level issue, too.
Won't we have to look at the tax consequences for employers who use the public option or allow their employees to do so? [Angus Deaton argues that employer "provided" health insurance encourages employers to structure jobs for fewer higher income employees instead of more lower-paid employees and subcontract low wage services like janitorial.]
Also, we should have automatic enrollment in ACA for anyone losing a job or income.
We should also look at the fiscal cost because this will hit the full employment deficit and however low the interest rate, borrowing for current expenditures at full employment is not a good idea.
Ideally, health insurance (and retirement) benefits should be finance with a VAT instead of a tax on wages.
The primary problem with US healthcare is that we are spending way too much money for pretty crappy results. Expanding access to that does nothing to solve the problem. Remember “bending the cost curve” that was supposed to happen as part of the ACA, but then actually never happened?!
Why not just ditch insurance all together and move to a market-based fee-for-service model where everyone has access? It would be popular (since no one would be left out of the system) and it would be better in terms of cost:benefits since incentives to spend money would be better aligned with improving health outcomes. The government could simply undergird this system so everyone could afford their healthcare instead of making it so everyone can afford their health *insurance* which allows access to a pretty overpriced, underperforming product.
I would assume I am one of your more conservative readers. Here's what scares me about single payor and what the Republicans will message to death of Democrats push it: They want to make it illegal for you to have private health insurance. They want the government to have a monopoly on healthcare. etc.
As I said, I'm moderately conservative, and I'm actually FOR universal health care and I am very persuadable depending on the specifics of the proposal-- and there are many different ways to get there. I agree that it should be universal and preferably portable and not tied to employment. However, single payor is a full government takeover which crowds out all choice and is therefore simply a nonstarter. I'm not at all persuadable on that and I would prefer the current system. This would be the functional equivalent of making private schools illegal and demanding that all children attend public schools only. I've been wrong before, but I cannot imagine that would fly in this country...
Solid inaugural post by the Intern!
I agree that everyone should be insured. However it is not the case that "almost everyone who is insured is insured through their employer". In fact, less than half of those who are insured were insured through their employer in 2019 and I am guessing that as a result of COVID, those numbers are even lower. https://www.kff.org/other/state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
It's also worth noting that in 2019 over 29 Million people were uninsured. Though that latter point doesn't really affect your argument.
What justification does Biden give for not allowing employers to get the public option?
He doesn't want to rock the boat. Employers are free to raise their employees' salaries by how much they take out of their overall compensation to pay for healthcare (in my personal case, 36% of my overall compensation goes to health insurance) and let them use the money to buy into the public option. But they have to stop offering health insurance as a benefit.
Great article Marc, and I totally agree with you that our goal should be increasing coverage, period, and that we should apply political pressure to achieve any individual policy that would get us closer to that goal. I think a big pitfall is being overprescriptive on specific policy, and we all too often in this debate we somehow let perfect be the enemy of the good (see: you are literally killing people if you don't support immediate universal 100% government provided healthcare).
Honesty, pragmatism, and ambitious goals good politics make.
We've got to talk more about deductibles as part of this conversation. If you have an insurance plan with a $3,000 deductible, you don't actually have insurance unless you've got $3,000 to spend, and you'll be just as reluctant to go to the doctor as if you didn't have insurance at all. There's a difference between efficiently rationing care, and inducing people to put off dealing with legitimate health problems as long as they can.
I understand that deductibles can offer flexibility when they're chosen, but if you're forced to buy insurance, can't afford a high premium, and get stuck with a high deductible as a result, then the same lack of funds that pushed you toward the low-premium/high-deductible plan then keeps you from meeting the deductible and having your insurance actually reimburse your costs like insurance is supposed to do. This seems to be a common outcome with Obamacare, and it's a result of aiming to boost insurance enrollment without caring enough about whether the insurance is really usable.
> If you have an insurance plan with a $3,000 deductible, you don't actually have insurance unless you've got $3,000 to spend, and you'll be just as reluctant to go to the doctor as if you didn't have insurance at all
Two things here:
- This is how “insurance” works! Someone paying predictable monthly payments for you isn’t real insurance, it’s just someone paying for things for you. Health insurance programs of course do this, but only catastrophic health insurance is actually insurance, and it’s probably confusing things that we use this word for what’s actually, like, a healthcare subscription.
- On my plan at least, there’s still cost sharing below the yearly maximum, so having insurance always makes things cheaper at the start of the year. But the HDHP setup is pretty silly, it’s pointless that they give you fake HSA money so they can charge you fake HSA money for a prescription I can’t optimize out of my life.
A lot of health care expenses are unpredictable, well under the catastrophic "I got hit by a bus" level. Something like a broken leg or an animal bite that gets infected chew up a lot of money in an unavoidable way that puts you on the hook for several hundred or a couple thousand dollars, and in that situation, insurance isn't helping you one bit if you have a high deductible.
High deductibles seem like a way for companies or the government to say "well, you/we can't/don't want to pay a high premium, but you need insurance, so here's 'insurance' with a low premium that only picks up costs after you pay a few thousand dollars out of pocket." Something like banning deductibles would take away this dodge, and while, yes, it would take away some consumer choice, we also have laws around usury and unfair contracts that do the same sort of thing.
To be clear, I'm not complaining about cost sharing or co-pays, I'm taking issue with the "you pay everything until you spend $X, then plan covers X%" framework. In an emergency situation, this leads to a sudden unpredictable expense - the kind of thing insurance is supposed to prevent - andn in a situation where you have some flexibility, it pushes toward you not getting that weird cough or pain checked out sooner.
HSAs like you mention do help avoid this, but it's bizarre that the system is set up in such a way that it makes sense for an employer to pick a plan with a high deductible and then separately reimburse you for expenses that apply to the deductible. And as you point out, all the "consumer-driven" stuff implies that health care consumers are easily able to scale back their consumption, when in fact stuff like "prescription I need to live" is something you can't consume less of.
I guess this is as good a place as any to toss out an idea I've had rattling around in my head for a few years now. The basis for it is the fact that we already have in the US working examples of both single payer (Medicare, Medicaid) and socialized medicine (the VA). My suggestion is to establish pilot programs that allow a small portion of the general population to enroll in those programs, measure the results and slowly expand them as warranted.
It could work like this: we pass a bill that provides a little bit of seed money to expand the capacity of the VA and cover more people in Medicare and Medicaid. Let's say for starters we expand each by 1% or so. Then we allow the public to apply to any or all of them, with the understanding that if they are accepted they will pay a monthly premium that roughly matches the government's average cost per user (which of course would vary between the 3 programs). Then we run a lottery to choose which applicants get the extra slots provided by the 1% expansion. Then we study the spending and outcomes of both the winners and losers of the lottery. If the winners are getting better care at lower cost (which we should expect) then we do another small expansion of the program and bring more people in. Rinse, repeat.
Ideally, you would structure such a program so that it automatically grows as long as there are more applicants and the outcomes of current participants are good. Maybe you put it on an accelerating path, so once we figure out the system works in the first few years it starts growing faster. If necessary you can add a few points of margin onto the premiums so that each group pays for the next expansion. And obviously some subsidies would have to be in order for lower-income applicants; that's true of really any approach to healthcare given US inequality, and hopefully the ACA subsidies can simply be applied so we can sidestep controversy on that point. Similarly we emphasize the research aspects of the program (this is not a huge rework of the healthcare system!) and the fact that it is 100% voluntary (nobody is being forced to change their insurance!) and that it only grows to the point that more people want in.
Obviously this is the barest outline of a plan. And I just threw 1% initial expansion out there; maybe 5% or 0.2% makes more sense. But the bottom line is that if it was carefully structured and well run, such a plan could eventually get us to a point where anybody who wants socialized medicine or single-payer (at two price/benefit points!) has that option.
It's just the beginning of an idea; poke some holes in it for me...
Good post, thanks Marc! I have often thought that Noah Smith's idea of extending the existing Medicare system to everyone would be a good compromise between the status quo and Bernie Sanders proposal which in some ways is more generous than the health care system of any OECD country.
There are also some ways that the expansion would not have to be entirely tax paid, for example having companies and individuals pay into existing Medicare though the end call should be for Medicare to be available to all.
“Part of fighting for [Thing A] means trying to recruit allies rather than expel heretics, and that in turn means displaying a little more precision than you sometimes see from the [Thing A] movement.”
The problem with the past decade or so of Progressive politics in a nutshell.
Why aren’t employers more enthusiastic about single payer? Wouldn’t they save a ton of money and never have to deal with deciding to cut benefits?
Large employers like offering healthcare benefits because it’s good for hiring. (This is the entire appeal of working at Starbucks.)
For small employers I’m sure some like it and some are run by petit bourgeois who just aren’t giving benefits in the first place.
It would actually help people like Matt who want to become sole proprietors the most, I think. That might be why the EU has fewer large tech companies since it’s natural enough to do software as a sole proprietor if you have healthcare
This is a very bad take overall, and not in keeping with the rigorous "what does the data actually say, even if Twitter doesn't like it" brand that was what convinced me to subscribe to Slow Boring.
For goodness sake, this is advocating straight Medicare-For-All, Bernie-style, and then ignores that "Medicare-for-all that involves eliminating private health insurance companies" polls at -21 points!
As far as I can tell, the popularity of the phrase Medicare-For-All comes from people assuming that it's Medicare-For-All-Who-Want-It (Buttigieg-style), not Medicare-For-All-Even-If-They-Want-To-Keep-Their-Current-Insurance (Bernie-style).
We *just* had a primary about this. If private insurance eliminationists can't win the argument in a Democratic primary, they can't win the argument in a general election.
The job mobility point is a big one that advocates should get behind. This is a way to win the moderate right.
As a business owner (feels terribly cliche conservative to say that), I want nothing more than to get out of the healthcare game forever! I don't want to know or be a barrier to my employee's healthcare. It's a ridiculous idea that I have to think about that, and causes a litany of supreme court cases (Hobby Lobby?) that shouldn't happen. This is a butterfly effect where past tax policy dictates the current equilibrium.
Beyond that, this is an argument that works with the honest, non-hyenas of the right wing. There are few left, but I hope that Mitt Romney and Susan Collins (or better yet their younger counterparts) can appreciate the idea that employers should have NOTHING to do with health insurance.
That said. If you told me that New Jersey was unveiling a single-payer system run by the state, I would be forced to vote against it. In principle, all for it. But, their administration would render it inoperable, and thus forcing a right wing backlash. This is why good governance is so critical to these initiatives. In this way, we need to consider being more like Switzerland. Single payer system, but we involve the private providers to do the delivery. This still requires good governance, but takes the technological and operational burden off the government, something I know they can't handle at the moment.
I think the biggest issue in government supporting health insurance is that ACA premium subsidies fall off a cliff to zero at about $70k family income for a 2 person family. The unsubsidized premium isn't really an option for a couple earning less than ~$120k. That gap covers a lot of self-employed, gig-workers, small business owners and small business employees. Solving this should be as simple as extending the subsidy on a tapering basis till it disappears at say $140k. You won't cover many more people this way -- those people are still getting insurance somehow -- but you will address a real middle-class pain point and neutralize a huge GOP talking point about helping working families. If you go extending Medicare for all or beefing up Medicaid without addressing this issue, the complaints of clientelism would be justified.
The Mayor Pete option plus medicaid expansion sounds like the best options. Let's look for ways to make this a state level issue, too.
Won't we have to look at the tax consequences for employers who use the public option or allow their employees to do so? [Angus Deaton argues that employer "provided" health insurance encourages employers to structure jobs for fewer higher income employees instead of more lower-paid employees and subcontract low wage services like janitorial.]
Also, we should have automatic enrollment in ACA for anyone losing a job or income.
We should also look at the fiscal cost because this will hit the full employment deficit and however low the interest rate, borrowing for current expenditures at full employment is not a good idea.
Ideally, health insurance (and retirement) benefits should be finance with a VAT instead of a tax on wages.
Efforts to reduce medical costs should continue.
Just pass a public option. that's all that's needed to kill employer coverage.
The primary problem with US healthcare is that we are spending way too much money for pretty crappy results. Expanding access to that does nothing to solve the problem. Remember “bending the cost curve” that was supposed to happen as part of the ACA, but then actually never happened?!
Why not just ditch insurance all together and move to a market-based fee-for-service model where everyone has access? It would be popular (since no one would be left out of the system) and it would be better in terms of cost:benefits since incentives to spend money would be better aligned with improving health outcomes. The government could simply undergird this system so everyone could afford their healthcare instead of making it so everyone can afford their health *insurance* which allows access to a pretty overpriced, underperforming product.
These aren’t my ideas. This was published over a decade ago and it’s still the best idea for American health care reform out there. https://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/
> Remember “bending the cost curve” that was supposed to happen as part of the ACA, but then actually never happened?!
A comment above says this did happen but nobody noticed/we don’t know why, because it’s too much work to read the data.