Several leading Democratic candidates, like Kamala Harris and Elizabeth Warren, have taken up the Bernie Sanders slogan of Medicare for all. This reveals a misunderstanding on their part as to what Medicare is. But slogans, accurate or inaccurate, are the low hanging, easy fruit of vote getting. Medicare is an insurance program into which everyone enrolled has paid premiums throughout their working lives through the Medicare tax on wages. A citizen becomes eligible for Medicare now at age 66. So how how can a 30 year old who has hardly paid any premiums be eligible for Medicare? In point of fact, Medicare for all is the malodorous “single payer” health care system. Not a good slogan for vote getting. Conservatives rightly direct their attacks against these candidates for what their plan is: A government program that will cost the treasury trillions of dollars and must therefore be supported through direct tax revenues.
A Noble Objective
However, it does have a noble objective and therefore should not be dismissed out of hand just because a few ill informed candidates espouse it and wish to cover its odor with a pleasant sounding slogan. Rather, it should be compared with other approaches that seek to achieve the same end, namely universal health care in the U.S. Are there any other approaches? Yes, there is one that meets this objective in a more economically efficient way and, fortunately, can be seen in current practice; so we have the opportunity to measure its efficiency and effectiveness. It’s Obamacare , or the Affordable Care Act. It has been maligned by Republicans, probably because they didn’t invent it. In fact, unlike the Democratic left’s single payer system, Obamacare combines conservative economic principles with properly balanced and effective progressive ones.
What is Obamacare
Obamacare combines four types of insurance across the conservative to liberal political spectrum into one coherent system: (1) employer provided, (2) market based private, (3) government subsidized private, and (4) government supported (the malodorous “single payer”).
(1) Employer provided insurance currently covers about 150 million working Americans. The perceived benefit to the company is a more loyal, healthy and effective workforce. As has been pointed out to the “Medicare for all” crew, these 150 million insureds would go onto the public dole under their plan. And another, large tax cut would be gifted to Companies in addition to Trump’s 20% Corporate tax reduction.
(2) Market based private insurance. This is the centerpiece. Its purpose is to provide reasonably priced insurance in a competitive marketplace to Americans who have sufficient income and are not insured by their employer. All insurance cost is based primarily on (a) having a large pool of insureds and (2) spreading the risk among all insureds. Obamacare achieves this by requiring everyone who is not covered by one of the other 3 components to purchase this one. There is a financial penalty for those who do not. The Republicans found this to be its Achilles heal and were able to obtain a Court ruling that it was unconstitutional for the government to require that citizens purchase this insurance. Without this mandate, the pool of insureds dropped, and young, healthy Americans were the principal dropouts. Hence, the two cardinal rules of insurance were eliminated and premiums rose. Republicans rejoiced, cynically claiming that they had predicted from the start that the cost would be too high.
(3) Government subsidized private insurance. Still considering that the marketplace under part (2) might not provide a low enough cost to citizens with low income, Obamacare provides for a scaled subsidy to individuals whose income falls between around $12,000 and $48,000 and to households between around $21,000 and $83,000. They can then go into the same marketplace using their subsidy.
(4) Government supported insurance. This is called Medicaid. It is the “single payer” residual component of Obamacare, made available to individuals with less than around $23,000 of income and households with less than $40,000.
Obamacare, the ACA, has as its objective the optimization of governmental cost and delivery of quality healthcare to all citizens. Any system of this magnitude, involving some 327 million people, is bound to have problems and growing pains, but the ACA was on its way to significant success until the Republicans were able to eliminate the mandate. We still have Obamacare, though it must somehow deal with the higher marketplace costs. The answer is not to have the government increase subsidies, pushing the plan to the left. The answer is to eliminate Republican leadership’s duplicity and ignorance and to restore the mandate. The place for this is the voting booth in 2020. As for the left, a Democratic, or even Republican, candidate is needed who understands what this blog about.