Sunday, November 17, 2013

Why a single payer system would be better than Obamacare

Recent efforts to defund Obamacare evoked hot air from both sides of the aisle.   Perhaps it is now time for serious talk instead of talking points.

While it has some good aspects, there are four principal problems with Obamacare: 

1.  It is outrageously complex,  confronts individuals and employers with decisions they are poorly equipped to  make, and requires government to pull together vast amounts of information in determining eligibility for subsidies. 

2.  It leaves millions uninsured,  especially since the Supreme Court eviscerated Medicaid expansion by allowing states to ignore it without losing federal funding for their existing Medicaid programs. 

3.  It perpetuates employment-based insurance  (while undermining it for some).  People who become too sick to work will continue to lose their insurance, and their loss of income will make it impossible to buy insurance privately without prolonged paperwork at the exchanges.

4.  Under  Obamacare  insurers are gaming the system,  offering low prices on the exchanges but restricting coverage to very limited “networks” of doctors and hospitals,   making it harder for people to get care. 

There is an obvious  solution to these problems:  a taxpayer-funded single-payer insurance system, “Medicare For All.”   

Medicare For All could be very simple, with low administrative costs.  Individuals could participate without having to make complicated decisions requiring them to consult accountants,  lawyers . . . and psychiatrists. 

The system would cover everyone without any exceptions, and would allow overlapping systems like Medicaid to be phased out.

People wouldn’t depend on employment  for insurance.  Those too sick to work would not lose coverage.  Employers would have no incentive to move towards part-time work or to avoid hiring older people, whose medical costs tend to be higher.

Under single-payer there would be no  “out of network” doctors and hospitals.  People could chose doctors and hospitals to their taste and convenience. 

The major political obstacle to a single payer system is that it would require higher taxes.  But the average person’s out of pocket costs for insurance would be reduced by more than their taxes would increase, leaving more in their pockets.    

Single payer eliminates payment of personal insurance premiums.  It also eliminates the premiums now paid by employers,  money by necessity subtracted from the wages they pay.  (That is why low paid workers are not provided with insurance, since their wages cannot be reduced below the legal minimum, and why the employer mandate drives employers of low-paid workers to make them part-time to  avoid insuring them.)

To retain qualified workers, employers will have to redistribute these savings as increased wages. 

By greatly reducing administrative costs and eliminating private profits and the magnificent salaries of insurance executives,  single payer’s total cost would be less than Obamacare and less than the pre-Obamacare system.  This lower system cost is why the average person will retain more in-pocket even after paying increased taxes.   

Having given up on defunding, John Boehner now says he will continue fighting Mr. Obama’s health care law, but in a different manner.  Perhaps he should consider supporting a replacement that would incorporate the conservative values of simplicity,  uniformity, and efficiency: a single payer system paid for with taxes,  Medicare For All.

This op-ed has appeared in the Adrian Daily Telegram.