Diatribes of Jay: Universal Health Insurance: Medicare for All Who Want It

[For brief descriptions of and links to recent posts, click here. For an inverse-chronological list of all posts after January 23, 2017, click here. For a subject-matter index to posts before that date, click here.

Suppose Congress offered affordable health insurance to every adult who files a tax return, including those who pay nothing and poor filers who get subsidies. Suppose it observed all the legal limitations and caveats that we now know our Constitution imposes.

Suppose Congress resolved not to inflame our uniquely American allergy to coercion, which has left “Obamacare” hanging by a thread. Suppose instead Congress resolved to tread lightly and leave untouched all the various forms of health insurance that people are used to and mostly happy with, including private insurance and Medicaid.

What would such a system look like, and how would it work? How would it fund itself? Would it be “legal,” constitutionally speaking? Could it eventually attract patients away from private insurance? And could it—slowly, over time—help correct the grotesque economic inequality that is driving American society back toward the class divisions of Dickensian England? Read on.

We start with three basic and unquestionable propositions. First, Americans hate being told what to do. Even more, they hate having to pay a penalty and get nothing for it if they don’t do what they’re told. That was the glaring and only big flaw of “Obamacare”—a flaw that now has nearly done it in.

That’s why in late 2007 I doubted Nobel-Prize-winning economist Paul Krugman (see this post and this one) in his support for Hillary, who pushed the penalty, while Candidate Barack Obama didn’t. That’s why, after all the dust has nearly settled, it’s the penalty that has nearly killed “Obamacare.” As I and others had predicted, the “mandate” allowed the right wing to demagogue the whole program nearly to death.

Getting young and healthy people who don’t think they need health insurance to buy it by imposing penalties with no insurance may make the numbers work: I trust a Nobel Prize winner to do the math right. But that is and always was a bad idea politically. Didn’t anyone remember the old snake flag from our American Revolution, the one with the legend “Don’t Tread on Me”?

The second proposition is even more important: Congress can tax. In his “swing vote” that “saved” Obamacare in 2011, Chief Justice Roberts interpreted the penalty to enforce the mandate as a tax and therefore found it within Congress’ constitutional power.

But we don’t have to rely on Chief Justice Roberts’ concurring opinion in National Federation of Independent Business v. Sebelius to finance universal health insurance. We have the Sixteenth Amendment, adopted in 1913, which specifically authorizes Congress to tax incomes.

Right now, Congress taxes incomes generally, puts the money in a big pot, and finances various specific things with specific appropriations later. What’s to prevent Congress from allocating taxes for health insurance from the get go, with a few special lines on everyone’s Form 1040? In other words, why can’t Congress tax incomes for health insurance separately, allowing the whole federal health-insurance system to be transparently and separately financed by taxes, much as Medicare is financed by separate payments now?

If people gamble with their health by not buying health insurance and lose, most of them end up in emergency rooms, where the cost of even routine care is astronomical. Then the public has to pick up the tab. So the public is justified in buying insurance for these gamblers and having them pay for it through taxes. It’s harder to justify making them pay a penalty less than the cost of insurance, for which they get nothing. Then they still have to go to emergency rooms.

The third unquestionable proposition is that a “single payer” system can offer cheaper insurance than the private sector can, even if it doesn’t include people who like their current private insurance or Medicaid. There are four reasons for this, none of which has anything to do with politics.

Medicare for All Who Want It would: (1) impose no charge for private profit, which costs privately-insured people at least an additional 10%, (2) have lower administrative expenses, to the tune of 5-13%, (3) achieve further unquantifiable administrative savings by reducing multiple private systems of websites, forms, rules and procedures to a single public system, and (4) have additional not-yet-quantifiable savings in premiums because the public risk pool would be larger than that for any single private insurer, let alone any single private plan.

The savings from the larger risk pool (point 4) would increase with time, as people migrated slowly and voluntarily from their private to the public insurance. They would be attracted by lower rates, simplicity and honesty in communication, portability separate from employment, and relief from incessant (and often misleading) promotions and come-ons.

If Medicare for All Who Want It were done right, Congress might not even have to write transition rules. The transition of many from private to public insurance would occur naturally and organically, as private insurers found their businesses decreasingly patronized and profitable and put their capital to work elsewhere. It wouldn’t matter whether this transition process took years or decades; it would all occur naturally, without coercion or government intervention.

Employers, too, would help speed this organic transition. As Medicare for All Who Want It became better understood and more popular, employers would encourage, if not push, their employees to enroll in it. By so doing they could offload their financial burden of administering, and sometimes partially subsidizing, their employees’ private health insurance. Then they could begin to compete on a level playing field with their foreign competitors, most of whose employees enjoy both health insurance and retirement provided independently by government.

How would this plan look from the consumer’s/insured’s perspective? Medicare would offer a series of health-insurance plans with increasing coverage, something like Obamacare’s Bronze, Silver, Gold and Platinum policies. All would cover pre-existing conditions, preventative care, one or (for seniors) two physical exams per year, care for catastrophic illnesses and accidents, basic psychiatric care, and medically necessary life-preserving drugs. They would differ in their deductibles, co-pays, and perhaps monetary limits of coverage, as well as in coverage of hospital amenities (such as private or semi-private rooms), nursing care, at-home care, physical and rehabilitative therapy, etc. (With increasingly expensive personalized medicine and genetically tailored drugs, the plans also might offer differing levels of coverage of that sort of advanced care.)

The key to alternatives would be the most basic, cheapest Medicare policy, analogous to the Bronze level under Obamacare. There would be a separate Medicare block on everyone’s Form 1040. In that block, filers would state, under penalty of perjury, whether they had private insurance and, if so, what it cost, and whether they relied on Medicaid, and, if so, at what primary facility.

If a filer’s private insurance cost more per year than the cheapest Medicare-for-All-Who-Want-It policy, or if a filer relied on Medicaid, then no additional tax would be due. In neither case, an additional tax sufficient to purchase the basic Medicare-for-All-Who-Want-It plan would be calculated and due with the Form 1040. The filer could also purchase higher levels of coverage by paying additional amounts of tax, but otherwise uninsured filers would have to purchase some level of insurance and be taxed to pay for it.

The price for each level of coverage would depend on the Filer’s Adjusted Gross Income (AGI), as reported elsewhere on the form. No additional or separate filing would be necessary, just additional payment. (The AGI is the amount on which federal income tax is assessed now.)

Thus the separate Medicare-for-All-Who-Want-It tax could be a progressive tax. Its progressive ramp could be either steeper or gentler than the progressive ramp for the rest of the income tax. So the system could be arranged to help redress our grotesque economic inequality through health insurance. Or it could be arranged (with a gentler progressive slope) to avoid political objections, especially at the outset.

From the filer’s perspective, all this could be done with a few additional lines on Form 1040. In exchange, a filer purchasing a plan under Medicare for All Who Want It would get reliable, government-administered health insurance with no tricks, no “gotchas,” and no fine print. The insurance would be administered by government employees instructed not to maximize profits and minimize paid claims, but to be sure that all just claims got paid promptly. There would be no incessant promotions, no salesmanship, no obfuscation. Letters and websites would be drafted in simple English, to explain and to clarify, not to dazzle, confuse or sell. Over time, the health-insurance system in our United States would begin to rival the efficiency and economy of similar systems now working well in our developed-country peers.

Yet nothing would ever prohibit offering, selling or buying alternative or supplemental private insurance that offered—or even seemed to offer—a better deal. Medicare for All Who Want It would neither outlaw nor replace private insurance; it would compete with and supplement it. Thus the demagogic term “socialism” simply would not apply.

The goals of Medicare for All Who Want It would not include driving private health insurance from the market. They would include: (1) insuring everyone, (2) giving everyone access to reasonable insurance with basic protection, including coverage of pre-existing conditions, (3) reducing health gambling that imposes unfair costs on everyone else, (4) restricting emergency rooms to genuine emergencies, and (5) maintaining “herd immunity” through universal vaccination and otherwise raising the overall level of public health.

If anyone’s private plan cost more than the basic Medicare for All Who Want It plan, he or she could just so state on the Form 1040 and be exempted from health-insurance taxation altogether. Filers would have to have some sort of health insurance, whether private, public or Medicaid, but no one would ever have to pay a penalty and get nothing for it.

A combined private-public system like this would keep the public system honest and up to date. If the public system failed to cover advances in medicine—for example, personalized medicine or genetically tailored drugs—then private insurance or supplements could cover them. Eventually the additional private coverage would generate political pressure to expand the public system similarly. A hybrid private-public system thus would improve and expand organically, side by side with the progress of medical science. But no one would lack insurance, and no one would ever be forced to pay the profit of and endure the relative administrative inefficiency and annoying promotions of private insurance firms.

[For analysis of the Virginia blackface debacle, click here. For an update on how Twitter subverts politics, click here. For analysis of women’s chances to take the presidency in 2020, click here. For brief comment on Trump’s State of the Union Speech and Stacey Abrams’ response for the Dems, click here. For reasons why the Huawei affair requires diplomacy, not criminal prosecution, click here. For how Speaker Pelosi has become a new sheriff in town, click here. For how Trump’s misrule could kill your kids, click here. For comment on MLK Day 2019 and the structural legacies of slavery, click here. For reasons why the partial government shutdown helps Dems the longer it lasts, click here. For a discussion of how our national openness hurts us and what we really need from China, click here. For a brief explanation of how badly both Trump and his opposition are failing at “the art of the deal,” click here. For a deep dive into how Apple tries to thwart Google’s capture of the web-browser market, click here. For a review of Speaker Pelosi’s superb qualifications to lead the Democratic Party, click here. For reasons why natural-gas and electric cars are essential to national security, click here. For additional reasons, click here. For the source of Facebook’s discontents and how to save democracy from it, click here. For Democrats’ core values, click here. The Last Adult is Leaving the White House. Who will Shut Off the Lights? For how our two parties lost their souls, click here. For the dire portent of Putin’s high-fiving the Saudi Crown Prince, click here. For updated advice on how to drive on the Sun’s power alone, or without fossil fuels, click here. For a 2018 Thanksgiving Message, click here. For a list of links to recent posts in reverse chronological order, click here.]

Links to Popular Recent Posts

Diatribes of Jay

12 February 2019

Universal Health Insurance: Medicare for All Who Want It

Links to Popular Recent Posts

0 Comments:

About Me

Previous Posts