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The Path to Universal Healthcare I: Let’s Clarify Our Terms

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The United States, as is well known, spends much more money to provide effective access to health care to fewer people than other comparable liberal democracies. This is an urgent moral issue. The Affordable Care Act was a major step in the right direction but is also not a satisfactory end point for health care reform. The energy surrounding “single payer” is therefore both justified and generally a good thing. But, in part because health care is — who knew? — complicated and in part because for some people invoking “single payer” are saying “the neoliberal Democrat Party sucks because neoliberalism” rather than thinking through a strategy for getting universal coverage through James Madison’s sausage factory, there’s a lot of sloppiness and conceptual confusion surrounding the discussion. Before discussing the political and policy barriers to universal health care, it’s worth making some distinctions.

Let’s start here. There is a strange tendency to use “Medicare for all” and “single payer” interchageably. But unless Medicare was very substantially altered, “Medicare for all” would not actually be “single payer”:

Medicare provides protection against the costs of many health care services, but traditional Medicare has relatively high deductibles and cost-sharing requirements and places no limit on beneficiaries’ out-of-pocket spending. Moreover, traditional Medicare does not pay for some services vital to older people and those with disabilities, including long-term services and supports, dental services, eyeglasses, and hearing aids.

In light of Medicare’s benefit gaps and cost-sharing requirements, most beneficiaries in traditional Medicare have some form of supplemental coverage to help cover cost-sharing expenses required for Medicare-covered services (Figure 12). Other beneficiaries—30 percent in 2014—are covered under Medicare Advantage plans. However, 14 percent of all Medicare beneficiaries had no supplemental coverage in 2010, including a disproportionate share of beneficiaries under age 65 with disabilities, the near poor (those with incomes between $10,000 and $20,000), and black beneficiaries.

Medicare for all would actually be more like a European hybrid system. This is not necessarily a criticism. Indeed, as I have argued I think this is actually a much more viable path to comprehensive health coverage in the United States than true single payer or nationalized medicine:

Many liberal democracies, including Switzerland, France and Germany, have achieved true universal coverage with hybrid public/private models. The Netherlands actually changed its single-payer system to a hybrid system in 2006. When compared to single-payer Canada, the hybrid models in general rank better in quality and efficiency and are as or more equitable. And like single-payer, they deliver better results for far less money than the US spends.

Particularly given that there’s no way that single-payer would be as cheap in the US as it is in Canada, single payer is probably less desirable than the hybrid model even if we ignore the former’s political unfeasibility.

But Sanders and Clinton are right that, in the long term, something at least approaching European-style universal healthcare is possible. Many countries have built excellent healthcare systems out of better versions of the ACA model: expanded (and in the case of Medicaid, improved) public insurance combined with better-regulated and subsidized private markets. Progress can be made towards this incrementally, as Clinton has proposed; it can be done in another big statute but it doesn’t have to be.

If we’re going to get to universal coverage, though, liberals need to get beyond conflating “single payer” and “European-style healthcare.” (And I’ve been as guilty of that as anyone.) Universal health coverage is a case in which Sanders’s idealism and Clinton’s realism can in fact end up in the same place.

Whether “Medicare for all” is the best hybrid approach is debatable. Michael Sparer makes a good case for building off Medicaid rather than Medicare. But I’m not sure we have to decide ex ante, particularly since the path to universal coverage is much more likely to be gradual expansions of both Medicare and Medicaid while individual private insurance is more heavily subsidized.

The key point is that, whatever the most useful shorthand for politicians trying to win elections, when we’re thinking about health care policy we really need to stop conflating “universal health coverage” with “single payer.” It’s not wise to close off viable paths is advance, particularly since there’s not really any reason to think that single payer models are inherently better than hybrid ones at providing equitable coverage. This is particularly true given the formidable political obstacles that still exist, but we’ll return to that in the next post.

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