In California, Democrats are calling for a “universal, per capita health care system” as part of their party platform. An attempt to install such a system at the California Assembly at the end of January failed, but Golden State leaders promised another run on it.
At least a dozen other states are considering bills that would ban private health insurance and create single-payer health care. This is bad news for ordinary Americans. It doesn’t make sense to force nine out of 10 Americans to cancel their current health plans as part of a drive to achieve universal coverage.
About two-thirds of insured Americans currently rely on private health insurance plans. About 177 million people receive coverage through their employer, and about 34 million people purchase direct private coverage.
A single payer system can get rid of all those plans.
Moreover, Americans like their own plans. In a recent study of people with employer-sponsored coverage, more than two-thirds said they were satisfied with their insurance. More than three-quarters of them felt confident that it would protect them during a medical emergency.
Research by the Kaiser Family Foundation has found that the support available to the single payer declines when people think about the attendant consequences such as higher taxes and treatment delays.
Analyzes of specific single-motivated state plans indicate that the negative aspects will be severe.
New York’s health law, for example, would reduce employment in the Empire State by 315,000, according to research published last year by the Foundation for Research on Equal Opportunity. Another report found that if the bill became law, New Yorkers would have to pay about $250 billion in new taxes.
Moreover, a single payer will result in poor quality care. That’s because government payers rely on lower payments to hospitals and doctors to control costs. Look no further than Medicare. The American Hospital Association says hospitals receive only 87 cents for every dollar they spend treating health care recipients.
This is clearly not sustainable. If a single payer system—and its low rates of payment—are widely adopted, doctors and hospitals will respond by reducing the supply of care they are willing to provide.
This shortfall in supply, along with the unlimited demand fueled by making health care free at the point of service, can lead to long waiting times.
Just ask the Congressional Budget Office. According to a recent analysis by the Central Bank of Oman, a single payer system would lead to more “unmet demand” for healthcare services, “greater crowding in the healthcare system” and “lower payment rates.”
Lawmakers in many states have responded to concerns like these by endorsing a supposedly more moderate public option — a government-run insurance plan that’s supposed to rival private options.
But any public option would also compensate providers with lower rates than the private plans. The public plan will use this pricing power to set premiums and deductibles lower than those of private insurers. With people gravitating towards the cheaper public option, private insurance companies will gradually leave the market, until only the public plan remains.
The generic option is just a slower way to present a single payer. The health care paid by the individual is a worse cure than a disease.
Janet Trautwin is CEO of the National Association of Health Insurance Agents. This piece originally ran in the Boston Herald.