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Here's why creating single-payer health care in America is so hard

To become politically feasible, an American single-payer system would necessarily replicate our current system’s most glaring defects.

Bernie wants to believe in single-payer. But how would we get there?
Bernie wants to believe in single-payer. But how would we get there?
Joshua Lott/Getty Images

The Hillary Clinton campaign is taking some hard knocks from liberals over its maladroit attacks on Bernie Sanders’ single-payer proposal. In one sense, the knocks are well-deserved. Even if single-payer markedly lowers medical expenditures, proponents such as Larry Seidman estimate that a tax increase of at least 8 percent of GDP would likely be required to finance it. That’s a heavy political lift. It’s about as much as the entire federal income tax on individuals.

Yet as proponents rightly observe, these taxes would replace many visible and invisible ways we now provide to support a health sector that consume more than 17 percent of our economy. The experience of peer industrial democracies suggests that a well-designed single-payer system would be more humane and markedly less expensive than what we have right now.

Such a system would certainly be less convoluted and bureaucratically hidebound. Aggressively deploying government power to rein in prices, a well-designed single-payer system would be more fiscally disciplined, and would probably be more effective in targeting resources to best promote public health. Sanders deserves credit for noting the real virtues of a well-executed single-payer system.

In another way, though, Clinton's critique raises uncomfortable questions that deserve greater attention. It’s commonplace (though true) to note that single-payer is beyond the current boundaries of American politics. But what if, by some miracle, liberal Democrats won comprehensive victories that created a window of opportunity in which single-payer becomes realistically possible?

Designing a single-payer system in America

Imagine what would happen were President Bernie Sanders to sweep into office backed by a Democratic congressional majority similar to what President Obama enjoyed in 2008. Imagine further that President Sanders were sufficiently fortunate and skilled after that victory to enact a single-payer system. I wonder how different our policy dilemmas would really be from what we now face in implementing the Affordable Care Act.

As I have written at length in the Journal of Health Politics, Policy, and Law (and draw upon here), an American single-payer system would be more complex and kludgy than many proponents have considered or admitted. The source of these problems resides in American politics rather than the technocratic or ideological premises of our health care system. A different system operating through the same political mechanisms would produce similar complexity and kludge.

The pitch for single-payer is admirably simple: We cover every (legal) resident. We mail a Medicare card to everyone. Everyone is covered. That’s a lot easier to explain and market than it is to explain the convoluted structures of Medicaid and state marketplace plans.

This is also a caricature of how such a single-payer plan would be passed and how it would touch the lives of millions of Americans. Single-payer would immediately raise myriad intricate and divisive transition issues. It would potentially uproot thousands of critical arrangements President Obama, Speaker Pelosi, and Sen. Reid struggled to leave intact.

After all, ACA’s sales pitch to the healthy and insured was, "If you like your insurance, you can keep it." This pledge proved politically damaging when it could not be fully kept for several million people. Single-payer would be far more disruptive to even more people.

Winners and losers in the single-payer system

It’s telling that no fully articulated single-payer bill was ever drafted as an alternative to the ACA. Such a bill would have been no less complicated, and would probably have been more encyclopedic than the ACA was. A huge reform that creates millions of winners creates millions of losers, too.

As with ACA, the biggest winners would be relatively disorganized low-income people in greatest need of help. The potential losers would include some of the most powerful and organized constituencies in America: workers who now receive generous tax expenditures for good private coverage, and affluent people who would face large tax increases to finance a single-payer system. At least some of these constituencies would need to be accommodated in messy political bargaining to get single-payer enacted. And states would have a role to play, too, potentially replicating the messy patchwork we got with ACA reforms.

Single-payer would require a serious rewrite of state and federal relations in Medicaid and in many other matters. It would radically revise the Employee Retirement Income Security Act (ERISA), which strongly influences the benefit practices of large employers. Single-payer would require intricate negotiation to navigate the transition from employer-based coverage. The House and Senate would be in charge of this tension, and at risk of the negotiations among key legislators and committees who hold sway.

How even the public option died

Single-payer would be openly or quietly opposed by virtually the entire supply side of the medical economy. We saw this dynamic during the political knife fight over ACA’s "public option." Early versions of the public option would have allowed consumers shopping in the state marketplaces to buy into some public insurance modeled on Medicare.

Many stakeholders who supported other aspects of ACA noisily or quietly wanted to see the public option dead. Community hospitals, medical groups, pharmaceutical and medical device companies feared precisely the outcome liberals hoped to see: a viable public insurance product that gained broad acceptance and market share, and that used Medicare’s tremendous market power to discipline providers.

These constituencies understood and dreaded the heavy hand of government across from them at the bargaining table. These constituencies helped to kill the public option. They would be a force to be reckoned with in any political process that seeks to implement a single-payer system.

What the Supreme Court might do in a single-payer world

Given our polarized judiciary, there would be legal and constitutional challenges, too. Whatever fine print of the ACA found its way to the Supreme Court, the real fight concerned the propriety of an expansive federal government that seeks to regulate and humanize a national health care market. Constitutional conservatives reject this vision of American government. A single-payer system would engage even more contentious issues of federalism and the reach of national government.

Some progressives hope that single-payer could provide an attractive replacement for the grubby, path-dependent logrolling that now dominates our $3 trillion health care political economy. No viable single-payer program will replace these grubby politics. That’s logically impossible, because such a program must be produced through that very same process. Barring a historically comprehensive defeat of Republicans at every level of American government, advocates for expanded health coverage will face this discomfiting reality.

Passing a single-payer plan requires precisely the same interest group bargaining and logrolling required to pass the ACA. The resulting policies will thus replicate some of the very same scars, defects, and kludge that bedevil the ACA.

Progressives should still push for basic reforms that improve our current system. I supported the public option in 2009. I still do. I hope it resurfaces in some form, particularly for older participants in the state marketplaces. It may open a pathway to a true single-payer. If it doesn’t — which I suspect it will not — it might still provide a valuable alternative and source of pricing discipline within our pathological health care market.

Whatever policy one supports, we must actually consider how this imperfect and messy process will actually play out. There’s no immaculate conception in American politics.

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