Sen. Bernie Sanders has started a political revolution: not enough of one to win the Democratic presidential nomination, but enough to put the dream of single-payer health care back on the national political agenda in a way few would have expected five years ago.
Sanders’s campaign website states: "The only long-term solution to America's health care crisis is a single-payer national health care program." Many Americans — by no means all of them Sanders voters — seem to agree. Just this week, Gallup released a poll indicating that "58% of U.S. adults favor the idea of replacing [the Affordable Care Act] with a federally funded healthcare system that provides insurance for all Americans." Politico Magazine reports that Sanders’s health plan "is the most popular of the three remaining candidates."
Critics have noted many shortcomings and gaps in Sanders’s specific plan. Still, the public’s appetite for single-payer suggests that policymakers should take the idea seriously. Though Sanders has thought through some specifics of how to implement his plan, the newly awakened single-payer constituency will have to answer some hard questions about how America might implement a sound single-payer plan.
Here are 10:
1) What taxes should be enacted or raised to pay for it?
Single-payer would greatly increase federal spending, putting hundreds of billions of additional dollars onto the federal budget every year. Proponents estimate that the required increment to federal revenues would be roughly equivalent to a doubling of the federal income tax. Much of this increase would be offset by other reductions in public and private expenditures.
Even if single-payer reduced overall medical expenditures, it would still require big federal tax increases. These would bring correspondingly big efficiency and distributional implications across the American economy. It’s probably unwise to finance single-payer through the income tax. Some experts have proposed a value-added tax, which causes fewer economic distortions and losses per dollar raised. A carbon tax — which should be enacted anyway for environmental reasons — could be another valuable revenue source.
2) Would patients pay copayments or deductibles?
Sanders’s plan is labeled "Medicare for all." Yet as Ezra Klein observed here at Vox, Sanders’s proposed coverage is much more generous and comprehensive than the current iteration of Medicare. It apparently includes no patient copayments or deductibles. This generous structure would protect millions of chronically ill Americans who now sometimes face punishing medical bills.
Yet recent analysis by an Urban Institute team indicates that such generous coverage would sharply increase costs. Some patient copayments and deductibles, guided by evidence-based approaches such as value-based insurance design, might improve the quality and cost-effectiveness of a single-payer plan.
3) Who decides what is covered, for whom, and at what price?
A sensible single-payer program should say no to questionable or overly costly interventions more often than our current system is able to do. Private insurers lack the public legitimacy to reject dicey therapies. Medicare is susceptible to pressure from industry, provider, and patient groups.
It’s especially hard for private insurers to refuse coverage for a particular drug, device, or surgical procedure once Medicare agrees to pay. (I haven’t even mentioned bitter social policy disputes over immigration, abortion coverage and birth control. I’ll get into these later.)
A single-payer system requires tougher mechanisms. The Affordable Care Act established the controversial Independent Payment Advisory Board (IPAB). Yet IPAB and most other cost-containment efforts encounter fierce bipartisan congressional resistance. The ACA unwisely limits the use of economic tools such as cost-utility analysis in coverage decisions. An effective single-payer system requires real economic analysis to determine who is covered for what service, and at what reimbursement rates.
4) Is the "public option" the right path to single-payer?
One might think that Congress could pass a short law that simply announced all Americans are now eligible for Medicare. For a million practical reasons, that can’t happen. There are too many delicate and interconnected moving parts to the American health care financing system. Patients, providers, and pretty much every other interested stakeholder would rebel against abrupt radical changes.
No one knows what a careful transition to single-payer would actually look like, and how this transition might be accomplished without causing undue damage to existing systems. A Medicare-based public option such as the one Hillary Clinton endorses offers one strategy to develop infrastructure that might someday evolve into single-payer. This is one reason the public option attracts both fervent support and bitter opposition.
5) What happens to Medicaid and other state programs?
Healthy low-income Medicaid recipients could be subsumed in a single-payer plan. Single-payer could integrate supports for nursing home care now financed through Medicaid. The intricate and costly patchwork of disability, school-based, and medical services would be much more difficult to incorporate or to replace, as would the complicated world of Medicaid-financed social services to vulnerable populations.
State Medicaid programs greatly vary in structure, generosity, and expense. Medicaid subsidizes many state and local social services, too. Plenty of questions remain about how 51 state Medicaid programs might be combined into one national framework, whether states could or should offer complementary programs on top of a single-payer effort, whether the federal government might provide some cost-sharing for such state efforts.
National policy might emulate generous Medicaid programs in Massachusetts and New York. Or it might resemble less generous Medicaid programs in Arkansas or Illinois.
6) What about the potential losers?
Single-payer is potentially cheaper than our current health care financing system because government could use its market power to impose lower prices. There are many advantages to such a system.
Yet if government squeezes too hard or too indiscriminately, it could cause serious harm. It might also provoke a punishing political backlash from virtually the entire supply side of the medical economy. Rural hospitals on thin margins would be one obvious vulnerable constituency. Veterans, current Medicare recipients, and unionized workers with generous tax-subsidized health plans are three others. Single-payer cannot pass until the interests of such constituencies are addressed.
7) How would our kludgy political process produce a decent system while deterring political meddling?
Fragmentation of American governance poses another serious obstacle. Efforts by solid ACA supporters to weaken the ACA’s medical device tax exemplify this challenge. Establishing coherent and disciplined national policies requires a major power shift from Congress to the executive branch health care bureaucracy.
Many Democrats and Republicans oppose a more centralized policy process that might work better for the nation as a whole but would also reduce their individual leverage to help constituents and political supporters. A robust single-payer system must retain proper congressional oversight while constraining toxic micromanagement and special interest pleading.
8) What about abortion, immigration, and other related policy disputes?
Single-payer further nationalizes fights that are now addressed through private coverage or through diverse policies across the different states. Obvious questions remain about low-income women’s access to abortions and reproductive health services in a single-payer system.
One must also address the myriad coverage challenges related to the presence of undocumented children and adults in millions of households. Democrats prefer not to ponder the prospect of a future President Ted Cruz issuing executive orders on sensitive social policy matters. At some point, conservative Republicans will be at the helm, exercising considerable power over national health policy.
9) Could the affluent buy additional or alternative coverage?
Many among the top 20 percent will perceive themselves to be losers within a single-payer plan. As with ACA, they would pay higher taxes to support universal benefits, even as a single-payer plan will likely offer less attractive coverage than they currently have, typically supported by generous tax subsidies.
Many democracies strike an implicit bargain by allowing wealthy people to skip waiting lines or purchase generous wrap-around coverage. Such policies provide a safety valve that reduces some political opposition. Allowing some complementary private coverage also reduces pressure for overgenerous basic coverage. Allowing too many private add-ons runs the risk of unraveling the universal nature of single-payer coverage. An American system would have to manage these trade-offs.
10) How do we get from here to there without replicating the defects of our current system?
Sanders and his supporters rightly note that a well-implemented single-payer system would likely be cheaper, more disciplined, and more humane than our current health system. Yet two huge questions must be answered before the potential of such a single-payer plan can be realized.
First, we need a realistic road map that does not merely describe a sound single-payer system but that also describes how we might get there from here. It’s telling that no detailed single-payer legislative proposal has been advanced that provides a realistic transition plan. Many of the presumed or hoped-for financial savings one might expect from a single-payer system won’t be achieved. The political and administrative obstacles are simply too high.
Second, we require a strategy to ensure that a politically achievable single-payer system won’t replicate prominent defects of our current system. Almost by definition, single-payer cannot cure the pathologies that underlay our current health care system, because single-payer would necessarily be enacted through the same legislative structures, implemented within the same path-dependent $3 trillion medical care political economy, that created and sustained our current pathologies.
These are huge challenges, but at least we have some time to think about them. Single-payer can’t be enacted until progressives win comprehensive presidential and congressional victories on a scale we haven’t seen since the New Deal. If and when that moment comes, progressives will be hard-pressed to provide more solid answers than anyone has provided thus far.