November Is Coming And Single-Payer Proposals Could Follow

1. Medicare Inc.

One type of single-payer plan might call for the federal government to add an income tax of about 7% to pay for what would amount to an expansion of the current Medicare program.

The strength of this proposal is that we all know what Medicare looks like.

The weakness is, of course, that we all know what Medicare looks like.

Simply expanding Medicare could lead to national bankruptcy, by replicating the many problems in the current Medicare system, such as lack of efforts to use market forces to hold down the cost of prescription drugs.

Doctors will howl for higher fees for their services, and hospitals will demand higher rates for their services.

We already spend about 15% of the U.S. gross domestic product on health care, and ‘Medicare: The Single-Payer Version’ probably would increase the cut going to health care without doing anything to improve dismal U.S. life expectancy statistics.

2. A Fresh Start

Another kind of single-payer, universal health plan could rely on the federal government to start the program, set eligibility rules and pay premiums for the indigent. These rules will be simple such as offering coverage to all 295 million Americans but requiring no premiums for children under 19 years. A new nonprofit insurance company, which might be called Health Security America Inc., would provide basic health coverage for all.

The nonprofit company might be run by elected citizens that would use open hearings to design plans and set premiums.

One important safeguard against fiscal irresponsibility would be to prohibit the nonprofit company from issuing long-term debt.

Under the first scenario, private insurance companies might assume the kind of “administrative services plus” role that they assume in the current Medicare managed care and prescription drug plan systems.

Under the second scenario, the new nonprofit company would take over the actuarial risk in providing basic health benefits, but private insurance companies could participate by packaging the basic, universal coverage with extras, such as coverage that would help pay for access to private hospital rooms, international coverage, cosmetic surgery or other similar coverage not deemed part of a basic plan by citizens.

With the burden of skyrocketing basic health insurance costs lifted, health insurers and other insurers could increase sales of disability insurance, rich long term care insurance policies and retirement savings products that could help consumers meet their needs for financial security. At a minimum, health insurance problems would no longer dominate the agenda of monthly board meetings of private insurers.