A typology of responses to Bernie’s single payer proposal

September 15th, 2017 at 10:51 am

It’s Friday, I’m on the Amtrak with coffee and bagel at hand, so let’s get metaphysical!

I’ve received many responses to my piece praising Sen. Sanders newly unveiled Medicare for All plan, and read many different takes. Here’s a rough grouping of where they fall:

Go, Bernie, Go!

This group shares my enthusiasm of the aspirational goal of the plan, is less worried about the extent to which, at this early juncture, the numbers add up, and is especially impressed to see the evolution of the political support among Democrats.

Politically, some of these supporters are motivated by the belief, one that appears to be shared by some politicians with national aspirations, that Democrats need a strong, simple progressive message like this. It is a signal, one that’s heretofore been missing from the party, to a lot of economic vulnerable people, that Ds are willing to get outside the usual establishment box, go around vested interests, and fight for a policy that the base has long believed in.

Wonkily, some people in this group operate from the simple principle that if we’re spending 17 percent of GDP on healthcare while other countries with various versions of universal coverage—not all single payer, but all heavily regulated with cost controls and coverage mandates—pay an average of 10 percent—that’s 7 percent of GDP, $1.4 trillion/year, that could be put to better uses than excess profits by drug companies and insurers. True, many in this group recognize the missing pieces stressed by the next group, but they’re less worried about such details at this point.

Go, Bernie, but there are a lot of details to fix, especially re financing…

This group is supportive of the goal of universal coverage, if not single payer, but sees higher barriers to getting there than group #1. They also have issues with the plan as articulated thus far.

Some of the critiques, ones I find to be highly valid, center on the financing. Though I cited a number of options offered by Sanders as payfors, my pal Jason Furman points out that these options understate the cost of the proposal and their tax base is too narrow. Over to the Furmanator:

I appreciate the way in which the Sanders bill is moving the dialogue forward on how we can and should continue to expand coverage. But I am concerned that it is missing a big opportunity to have the honest debate we should be having about what fiscal direction we want to take as a country and, in the process, offering false hopes of free(ish) lunches. When we established Social Security and Medicare, they were paid for in a broad-based manner through payroll taxes. The system was progressive but everyone paid. The European social welfare systems take this principle even further—people, and not just the wealthy, pay more and get more. They achieve much more progressivity through their fiscal systems than the United States and do it largely through providing broadly shared benefits rather than making the tax systems very progressive.

Whether the United States should move further in the direction of broader-based benefits is an important debate—and one that Senator Sanders would be ideally poised to lead. But instead in this proposal, and in previous rhetoric, he is implying that most of this could be paid for by closing tax loopholes on corporations and taxing the wealthy.

Do not get me wrong—I am all for closing tax loopholes and taxing the wealthy more. But there is a limit to how much that could raise and it certainly is not enough to cover Medicare for All, let alone also paying for higher Social Security benefits, preschool, free college, paid leave, infrastructure, and deal with our existing fiscal hole. If we keep focusing on only raising taxes on the top 2 percent of Americans and corporations we will not be able to do all of this [JB: that’s a particularly germane point]. Advocates of these ideas need to convince the public that it is worth the cost to them—a cost that would be borne in a broad-based VAT or a payroll tax or some other instrument. And, in the process, advocates should make sure that the focus of the debate is on the overall progressivity of the system—how we raise the money and what we spend it on—not just on each of those ideas individually.

Another econo-pal, Dean Baker, crunches some numbers in the journal Democracy and finds Sanders’ financing to come up short to the tune of $650 billion per year—real money, even in DC.

Other objections from supporters relate to major transitional challenges. I’d put most of these under the heading of status-quo bias, which is not, btw, to be at all dismissive. Almost 160 million people, 57 percent of the under 65 population, get health care through their employer, and they often like it. So, if you believe that keeping what you have is a major selling point, you’ve got to consider the possibility that the hit to many service providers under single payer would be highly disruptive (many would presumably change who, where, and what they treat). I’m less worried about this part, ftr, as “keeping your doctor” is already less a feature of most people’s coverage and every employer I’ve worked for over the past few decades pretty regularly changes plans.

Finally, I’d add that any such plan needs more internal cost controls on the demand side, often through some degree of cost-sharing.

Stop, Bernie, Stop!

Of course, many in this last camp are stakeholders who risk potential displacement under single payer, or even under a more tightly regulated health care sector, i.e., the folks who lose when you take numerous percentage points of GDP out of the system.

Others just think you can’t get there from here, full stop. Single payer, or even Euro-style highly regulated universal coverage is not our fate, and Sanders and his co-sponsors are falling into the Democrats version of the trap in which the Republicans recently got caught. The status-quo and path dependency are too strong; having started from where we did, we now have an entrenched private sector presence in the sector, and the best we can maybe do is inject some sort of public option somewhere into the ACA.

Moreover, they argue, by falling into the health-care trap, Democrats will rue the day they stood with Bernie on this.

FTR, I’m in group #1.5, i.e., I reject the pessimism of group #3 and very much share the enthusiasm of group #1. But I think points like Jason’s are essential to start steering the policy process in a more feasible direction (to state the obvious, nothing in this space is feasible today or tomorrow, no matter how deep the love affair between Don, Chuck, and Nancy). In fact, that dynamic lies at the core of my WaPo piece. If Bernie didn’t get this out there, then Jason, Dean, et al. don’t get to start wonking about it.

So let the analysis, the politics, the advocacy, and the argumentation begin, develop, and penetrate the echo chamber of the possible. That’s a highly salutary development, a sliver of light in our pretty dark times.

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9 comments in reply to "A typology of responses to Bernie’s single payer proposal"

  1. Dude says:

    Unfortunately I don’t think we can trust the Democratic party to be honest about working through the financing. Most neoliberal economists have proven to be dishonest and hypocritical in almost all public discussions in my opinion. I’m also wary that you point to a position by Furman of the Peterson Institute (who I would call the chief deception officer for NAFTA and the TPP). Furman is also the one who wrote in the reports to Obama about the benefits of China’s ‘investment’ in our treasury bonds, which any person with a vague understanding of macro and international finance would believe to be a deliberate deception.

    I know that Jared knows what I’m talking about. It is time for the influence of people like Furman to be discarded forever. Ignored, shunned, whatever it takes. He’s no bud of mine or of the working people of this great country.


  2. Smith says:

    1) Americans have no idea what they pay for health costs. Even the total amount of medicare payments is hidden until the end of year paystub or W2 has the year’s contribution, but not your total cumulative contribution. Moreover, the employer’s contribution is hidden. And if you ask, the employer may decline to reveal it (this happened to me). It should be mandatory for the employee to see his cumulative total of medicare each year, and especially, the combined employer and employee contribution, plus the subsidy the employer obtains from the tax break by deducting the contribution. This is not too complicated since we have something called computers, and the federal government collects this information.
    2) Most European countries do not have the equivalent of Medicare for all. It would be helpful to discuss how their systems actually work, especially the largest countries in Europe, France, Germany, UK, Spain, Italy.
    3) VAT tax is a stupid, regressive, dishonest, inefficient way of raising taxes. It’s like a sales tax except you don’t see it at the register. Just because Europeans use it is no reason for us to consider. Despite arguments about it being a consumption tax, it’s use is primarily motivated by it’s hidden nature, and regressive effect. Unlike income tax, no one will ever win an election campaigning to lower the VAT tax. Be honest about taxes, please.
    4) Taxing at more progressive rates should not be so easily dismissed as inadequate. They would be an extremely important and essential component of selling higher tax rates to middle class tax payers, not to mention raising adequate revenue.
    5) What about European systems? I’m not seeing enough about how other systems work, or how other large modern countries raise revenue and control costs. Is it really the case that even one paragraph can not be devoted to this?


  3. John Ferrari says:

    My comment is simple. One way or another there will be a single payer system in the next 7 years. However it will be because there will be a crisis of how much healthcare is consuming national GDP. Having a one payer system without European type cost controls will be a disaster. So sit back and watch the show because it’s going to happen. And when it does it’s going to be crazy.


  4. Smith says:

    This is a pretty big deal, position of physician:
    https://www.merritthawkins.com/uploadedFiles/mha_singlepayer_press_release_2017(1).pdf

    “The survey of 1,033 physicians indicates that 42 percent strongly support a single payer health care system while 14 percent are somewhat supportive. Over one-third (35 percent) strongly oppose a single payer system while six percent are somewhat against it. The remaining three percent neither support nor oppose single payer. The results contrast with a national survey of physicians Merritt Hawkins conducted in 2008, which indicated that 58 percent of physicians opposed single payer at that time whil e 42 percent supported it.”


  5. Nick Batzdorf says:

    I’d like to be more positive, but rather than being aspirational this is just dividing the left. You should see Facebook. The Disciple of St. Bernard crowd completely loses their collective sh at anyone on the left who isn’t in favor of this, calling them corporatist whores or worse – Republicans. It’s completely impossible to explain how one can be in favor of single-payer in principle but not this plan.

    I also have to be cynical. Would those 16 Senate Democrat potential presidential candidates be supporting this stunt if it had a chance of passing?

    Meanwhile, sorry to interrupt the fun, but that “moderate Republican” Lindsey Graham is trying to kill Medicare again.


  6. Pinkybum says:

    From what I can gather the elderly (over 65s) make up about 15 percent of the population and consume about 40 percent of all healthcare expenses. It would seem then that some combination of increasing the medicare contribution by about double and affordable premiums (that seniors already pay) would do the trick. Is it that impossible to lay out a scheme based on this in an obviously simple way?


    • Smith says:

      No, all other developed countries pay substantially less and have better outcomes. Even accounting for the sicker American lifestyle, obesity and opioids, it’s the health system and payment system the needs to be fixed. We already pay too much.


      • Pinkybum says:

        My question was really rhetorical excepting the fact that the Democrats cannot seem to get their act together to explain this to the public in an understandable form. I suspect that their motivation to really explain, advocate and even implement a healthcare for all system run by the government is comprised by the donor class who finance their campaigns.


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