Health care costs are one of the most contested issues in the Democratic Party today. Both Hillary Clinton and Bernie Sanders have been looking at the rising costs associated with our health care system, and how the government can help alleviate the financial strain that health insurance is placing on people who are just trying to make ends meet. Clinton has framed herself as keeping with Barack Obama’s Affordable Care Act policies (the staple legislation of his administration), while Sanders has signaled vehement support for a single-payer national health care system—Medicare for all. The Affordable Care Act did not go nearly far enough in relieving the heavy burden of insurance premiums because of the lack of a public option. A single-payer system would be a tremendous step forward in reducing the exorbitant costs that Americans pay for health insurance.
Health care per capita in the United States costs 50 percent more than in Canada, and double the cost per capita in the United Kingdom. Private insurance providers calculate the expected cost of the insurance that they sell based on the likelihood of injury or illness and the costs of the medical care of treating those ailments. There are also other unavoidable costs in providing these plans, like administrative fees to cover labor, land costs, and technology. In all, the expense ratio for private insurers usually lies between 15 and 25 percent, while the Medicare program has a measly expense ratio of 2.9 percent. It doesn’t spend anywhere near the amount of money that private insurers spend on commercial advertisements and executive bonuses.
Critics argue that when all other costs associated with administering Medicare are taken into account, the ratio goes up to around 10 percent. If that number is correct, most people would still benefit from a more efficient program. University of Massachusetts Amherst economist Gerald Friedman has looked at Sanders’ proposal for nationalized Medicare, and has shown that aggregate net savings with a single-payer system over our current system will be around $5 trillion over the next 10 years.
The legislation Sanders wants to implement would also allow the Medicare program to negotiate drug prices, which it is currently unable to do because of concessions made to the pharmaceutical industry under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. A recent study out of Carleton University and Public Citizen showed that Medicare pays 83 percent of a brand-name drug’s official price, on average. Medicaid and the Veteran Health Administration pay only 48 percent and 46 percent respectively because they are not prevented from utilizing their bargaining capabilities.
The best critique of the payroll taxes needed to implement a national single-payer system is that taxes to pay for it are unjust because they are involuntary and people must relinquish the personal freedom to choose whether to pay for health insurance by themselves. The critique is right, but it neglects a critical aspect of the current system. What happens if someone chooses not to purchase insurance because they think that their likelihood of needing medical treatment is low, and they are wrong? The Emergency Medical Treatment and Active Labor Act of 1986 already requires hospitals, which receive payments from Medicare, to treat people that are in need of emergency medical treatment. The federal mandate does not provide funds to cover these people. The vast majority of hospitals have to pick up the tab for these people, and The Centers for Medicare & Medicaid Services have pointed out that approximately 55 percent of an emergency physician’s time is spent providing uncompensated care.
If our country is supposed to protect its citizens’ lives, shouldn’t it consider nationalized health insurance to provide all citizens with reasonably affordable health care? The United States should implement a nationalized single-payer health care system, or at least a public option, in order to secure more affordable insurance costs for its citizens.
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