Yesterday on a “town hall” on CNN, Kamala Harris floated the idea of getting rid of the private health insurance industry and going with a national single payer plan. Harris has been a strong proponent of Medicare for All for some time. Promptly, all of right-wing media went into a frenzy of pearl-clutching. But there’s been relatively less said about this in the rest of the media.
Martin Longman — a smart guy — doesn’t think Harris’s position is politically tenable.
In theory, I am very enthusiastically in favor of eliminating the private for-profit health insurance industry entirely. Yet, I know that this would cause a political firestorm unlike anything we’ve seen since George W. Bush tried to privatize Social Security. In fact, it would likely be an order of magnitude more controversial than that fiasco. To make matters worse, it’s a promise that could not be kept. To even contemplate the passage of such a bill, the Democrats would need a supermajority in the Senate, and that’s not in the offing anytime soon. In truth, the Democrats would probably need eighty or ninety senators to feel comfortable about getting 60 of them to vote the health insurance industry out of existence. In addition to the staggering number of negative constituent phone calls the senators would receive, many of them would be representing states that have thousands of health insurance jobs that would be on the line.
The question, then, is why would a presidential candidate run on a platform that included the elimination of private heath insurance? It might help them win the Democratic nomination, but thereafter it would weigh on them like an albatross. As a general election candidate, they would be savaged using rhetoric similar to what caused the Tea Party revolt and the midterm wipeouts of 2010 and 2014. Only this time, the rhetoric would largely be accurate and backed up by the media. If they nevertheless won the election, which is certainly possible, they would have to abandon their promise or they’d wind up taking a huge beating much like Trump did in his effort to repeal Obamacare.
I’m not sure what to think, other than it wouldn’t bother me personally to flush the entire health insurance industry, starting with the CEOs. Longman probably is right when he says it couldn’t pass, however, at least not in the foreseeable future. It’s a risky position.
On the other hand, we’ll never get nice things if we don’t ask for them. We desperately need an intelligent and fact-based national conversation on where our health-care dollars are really going and why health care in this country is so much more expensive — without being any better — than in other countries. The health insurance industry is, in fact, soaking up a lot of those dollars without adding any value to the system. If someone running on the position of going single-payer were elected president, it might at the very least change the parameters of the health care conversation that the powers that be allow us to have.
I wouldn’t mind copying the French health care system, which has a strong and highly rated national health care system paid by publicly financed health insurance in which enrollment is compulsory. There is also private insurance that functions something like Medigap insurance. I understand private insurance in France is mostly not-for-profit and offered through memberships in associations or through employment.
There is also much pearl clutching going on about taxes. Alexandria Ocasio-Cortez proposed a marginal tax rate of 70 percent on income over $10 million. The marginal tax on great wealth has been that high and higher before in the U.S., and the economy thrived at the time, but of course the Right thinks this is a radical new idea. But Paul Krugman endorsed AOC’s proposal. Eric Levitz wrote,
French economist Thomas Piketty has demonstrated that high tax rates reduce pre-tax inequality – ostensibly, by discouraging rent-seeking among top executives, whose compensation is often determined less by productivity than a combination of social mores and their own audacity: CEOs are less likely to extract an extra $5 million from their companies (instead of allowing their firms to invest that sum in other purposes) if they know that Uncle Sam will collect 70 percent of their bonus. Thus, there is now some reason to believe that confiscatory top rates can reduce wage inequality, while producing some gains in economic efficiency.
All of which is to say: In 1980, taxing incomes above $216,000 (or $658,213 in today’s dollars) at 70 percent was considered a moderate, mainstream idea, even though wage inequality was much less severe, and supply-side economics had yet to be discredited.
On the other hand, Steven Rattner pooh-poohs this idea.
For starters, Ms. Ocasio-Cortez seems to be ignoring the burden of state and local taxes, particularly for residents of places like her hometown. For us New Yorkers, the top rate for those levies is 12.7 percent. And thanks to the 2017 Republican tax cut, it is no longer deductible, bringing her proposed top rate to 82.7 percent.
Okay, then, make those state taxes deductible again. Problem solved. Next?
There are other, better ways to raise revenue — in particular, by increasing the tax rate on capital gains and dividends and closing loopholes.
I’ve heard arguments for taxing capital gains at the same rate as income. Rattner has a pain-free proposal:
But the 2017 tax cut legislation reduced the tax rate on corporate profits to 21 percent, from 35 percent. So if taxes on capital gains and dividends were raised by those 14 percentage points, we capitalists would be no worse off — and American companies would still be more competitive globally, the theory behind reducing the corporate tax rate.
In other words, let’s not expect the super rich to sacrifice or anything, especially since cutting corporate taxes doesn’t do a damn bit of good as far as workers are concerned. And it runs up the deficit. Steven Rattner is a weenie.
And the loophole thing is old and tired. Everybody talks about closing tax loopholes, and then there’s a new tax reform bill passed that’s supposed to close them, but somehow new loopholes pop up in their place and in no time there’s more talk about closing loopholes. By all means close loopholes, but stop claiming that loophole closing is a magic bean.
Liz Warren has proposed a wealth tax.
Under Warren’s proposal, households with over $50 million in assets would pay a 2 percent tax on their net worth every year. The rate would rise to 3 percent on assets over $1 billion. Warren’s plan would affect just 75,000 households total.
I certainly have no objections. But the article linked points out that many nations that used to have a wealth tax have dropped them, mostly because the wealthy quickly find ways to hide assets or move them offshore.
Still, talking about all this is good. That’s the first step in making them real.
To solve a problem, it often helps to find out how the problem arose. Once upon a time, actually, within living memory, the US health care/insurance system produced good results at about the same cost as in other advanced economies. That started to change around 1980. What happened?
I am no expert, but I have heard no expert explain the rising costs during the 1980s. The 1990s were pretty stable, with health care costs rising at about the rate of general inflation. So I don't know, but I have found out one thing that happened in 1978. Big Pharma was allowed to patent drugs that were developed by the US government or with government funding. That's a pretty big giveaway!
Anyway, Medicare is the most efficient medical insurance program in the US. The government is actually quite good at insurance, which means spreading risk across the population and moving money around. (Not that that is all there is to it, OC.) Plainly Medicare For All is an idea whose time has come in the US — as an idea. It is not yet politically viable. But it needs to be talked about and championed. Then we can start moving towards it. Suppose, for instance, we lowered the Medicare age to 50. Unfortunately politics involves intellectual pingpong. To get realistic policies accomplished you usually have to advocate unrealistic policies first. Medicare For More is not a good political slogan.
Billikin — There has also been a proliferation of new medical technologies such as CT scans and MRI scans that went into widespread use in the 1980s. Organ transplants also became more common in the 1980s when somebody figured out how to limit rejections. Let’s face it; in the 1950s there was relatively little medical science could do about anything compared to what it can do now. But the new stuff is expensive.
I'm all for single payer eventually, but like Billikin I think it needs to be done stages, "medicare for some". Calling for medicare for all is a risky and I think foolish political strategy. I'd be happy to see the ACA put back on solid footing and allow it to work? Abandoning the ACA is a political trap that the wingers will surely exploit. Most of all I want to see big pharma execs held to account for the schemes they are running. I wonder will Maddow and the rest of the moderate -liberal line-up at msnbc and cnn give up the big pharma ads that pretty much finance all of network and cable tee-vee news? To me it seems Pzier, Lilly, etc. they all run those ads to keep the news media from reporting on the massive scam they are undertaking?
twit filter is back!
Further down in the Longman article is this:
"It’s true that if you ask people if they support a national health care plan like Medicare-for-All, they say that they do. If you ask them if they favor eliminating private health insurance, they are significantly more emphatic that they do not."
IMO, that says voters want everyone to have access to health care but they aren't sure about giving up what works for them today for a system that might work better in the future. The answer was there ten years ago and we debated it. Public Option.
The way to integrate the Public Option into Obamacare is to make it mandatory for people getting over 80% assistance. We'd sell it on the basis that poor people will be the guinea pigs of the new option. Then keep opening up the structure to allow anyone to chose between paying more for the additional hassle or chuck your insurance plan when you want.
In the 50s, health care was strictly non-profit. I don't remember when it became a "for profit" business; but, that is when health care expenses became outrageous.
“In the 50s, health care was strictly non-profit. I don’t remember when it became a “for profit” business; but, that is when health care expenses became outrageous.” I see that claim made a lot on social media, but it isn’t true. This Snopes article explains what happened. The U.S. never had a strictly non-profit health care industry; it’s just that there weren’t big profits to be made until the latter half of the 20th century, when many medical and technical innovations presented profit-making opportunities. .
In DC, AOC is like the really, really hot and super smart girl who just transferred into their High School!
She scares the crap out of Republicans, conservatives, and the conserva-dems.
She rocks their boat!
She first rocked DC by just showing up – not naked, not dressed in filth rags, but neatly, inexpensively, and tastefully.
Then she rocked it when their derogatory video of her dancing became – WHOOOOPS!!!!! – an internet hit IN HER FAVOR!
And AOC invaded the Senate's space! She openly mocked Mitch! How dare she!
And most recently, she threw a flashbomb into their silken undies by talking about returning to about the same high marginal tax rates that we somehow or other not only survived under, BUT THRIVED UNDER!!!
As for health care, getting rid of the insurance companies too quickly can result in a lot of unforseen consequences.
I recommend building on Obamacare and Medicare-for-all, while we are slowly squeezing the for-profit health insurance companies until we can drown them in a bathtub.
Yup!
Twit-filter is back.
we’ll never get nice things if we don’t ask for them.
I’m thrilled that Harris has the guts to be a lightening rod for this issue – that’s what leadership looks like. She is going to get pummeled big time, and it’s either going to make her or break her. She’s going to draw a lot of national attention to herself because of this. We will start to have a real conversation in this country about health care, at long last.
I have a sense about her, that she’s either going to be the Democratic nominee or get very close to it. I watched Rachel Maddow interview her a few nights ago, and that night I had a dream, where Harris was simply reaching out to me, just making contact, saying Hi. Still not sure what to make of it – some dreams are profound and real visitations, most are just noise.
One thing to consider about Medicare for All is that it doesn't have to eliminate health insurance companies and too few Democrats make this point or even understand it. Medicare has long been paired with supplemental insurance for which recipients pay extra for extra coverage. Nothing about Medicare for All would eliminate that. In fact it is one of the features of MfA because it would essentially place reasonable boundaries around the excesses of the industry while still allowing them to provide specific coverage that recipients might desire that is outside of the Medicare coverage.
MfA can't cover everything but the presence of reasonable supplemental insurance makes Medicare much more efficient at covering medical expenses. I had open heart surgery 6 months after I turned 65 and the hospital costs (not surgical) were covered 100% between Medicare and my supplemental which meant that for a surgery and hospital stay that billed near $250,000 our out of pocket expenses were around $1500 and it meant saving our retirement. Also, Medicare paid about 60% of that cost as a negotiated rate to the hospital.
Also, we still pay for Medicare but the rate is greatly reduced over health insurance, costing around $100 per month each. (supplemental is extra)
The Medicare for All proponents (and I'm one in a big way) need to not only know this but make this clear to all involved. The specifics matter and ought to be explained clearly.
Dear maha,
Do they not have those things in Canada, the UK, Europe. Australia and Japan? IIUC, we now pay around twice as much per person as they do for health care, and we get fair to middling results. No?
“Do they not have those things in Canada, the UK, Europe. Australia and Japan?” Yes, but they also have cost and price controls and limits to how much profit anyone can make on medical technology. Here, there are no limits, which means prices do get gouged. Please read Why an MRI costs $1,080 in America and $280 in France by Ezra Klein.
(quote) “Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,†Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.
In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured. (end quote)
Doug, your note reminded me of something I read last year, about current health care costs in the US. I'm sorry I did not make a note of the link. But the idea is that a small percentage of patients have high costs, and that it is possible to focus on them intensively and actually give them better care for less expense. One thing is that these people often avoid seeing a doctor because of the expense, their health gets worse, and then they show up at ERs, which are expensive, and beyond their ability to pay. Getting them regular care is cheaper all around, and their health is better. Better health means that they are less of a burden to others, and may make the difference between being able to get and hold down a job or not.
Now, I haven't heard or read anything more about that lately. A lot of things that show promise don't work out, and maybe that is what has happened, but there is no reason that we cannot have good affordable health care.
I watched Kamala Harris on CNN the other night and was favorably impressed. She seems tough, decisive and believable. I doubt she is really far enough to the left for me, but I do like the idea of a black woman from California as President. Imagine how many conservative heads would explode! I am sure they are already working up the case that she was born in Jamaica. She did clearly state her support for a Green New Deal and Medicare for All, as well as opposition to the death penalty. I want to be sure she is not just another Clinton style phony, but she looks promising so far.
Martin Longman, if he is truly a smart guy, should agree that we have shown unbridled capitalism provides only a poor, expensive, uneven, and generally pathetic health care system and is also an unworkable idea. Money and medicine sometimes mix, sometimes do not. It will be quite a challenge to order the mess we have made of it. We must change from an anti-social greed based system bias to a more social, health based system bias in a pragmatic way.
This is going to be difficult as we have gone down the wrong idealistic road for too long. The free market has limitations that will be denied by it's proponents. Those on the health care gravy train will not disembark easily. The free marketers will try to get those doing good, reasonably priced, health care for the 99%, for an honest living, barred from the railroad completely. This is a skill they are getting better and better at year by year, It seems now that the vast majority of us get so little, if any, real effective service for an unsustainably growing price tag.
Medicine or health care you cannot get or afford is no medicine or health care. Even if you get none, you will be taxed one way or another for those who do use it and abuse it. Everyone, in fairness, should have access to certain health services as a right, without a co-pay or dings on their credit ratings. This is what I wish I heard the candidates saying. This would be, to me, a more sensible and fruitful way to start the discussion.
I'm old enough to remember the first OPEC "shortages" and gas lines. (This is apropos.) The method was to cut off gas and then, afterward turn it back on with much higher prices. The relief at being able to get gas swamped the outrage at higher prices. The bread makers then used to the same method ("Bread's going to cost $3 a loaf!") so that when bread went from about 30 cents to "only" a dollar everyone was relieved.
Turn the method around: you insurance company crooks aren't going to have a market anymore. Six months later: okay, you can have a tightly regulated market with much smaller mandated profit margins. Insurance companies are relieved at, after all, making money doing their jobs. Voila, a French or Swiss-style health insurance market.
In 1990 my physician in-law turned me onto a regional clinic which had just hired him. It was a major score. I’d get into the exam room within minutes of my appointment time. If my designated doc couldn’t see me that day for something important, another equally excellent doctor could. And the billing was always reasonable. All through the 90’s I gave em 5 stars.
In the ‘00 years I didn’t see a doctor.
In ’10 years I had some issues and went back to my clinic. My wait times always averaged over a full hour past my designated appointment time. I could never get my doctor, or even a decent doctor that day – usually a newbie or nurse practitioner, who IMHO were usually incompetent. They always seemed rushed and stressed. In none of my procedures was expensive technology used, yet the billing was outrageous. 1 star service.
I went to online review sites and found that my experiences were typical. That place had gone to hell. Yet, my in-law and his COO buddy who'd got him the job, display vulgar wealth today. Now why in our capitalistic society, that clinic hasn’t been replaced by something better is still a bit of a mystery. But the part where businesses are continuously improving on their ability to extract more and more cash from customers while returning nothing in added value, seems a standard business model these days. I believe the economists call it “rent-seeking”.
Is medicare for all the best remedy for the cancer of "rent-seeking", I dunno.
AOC proposes a 70% top marginal tax rate. Eisenhower enforced a 90% top marginal tax rate. If AOC is a democratic socialist, then what does that make Eisenhower?
I have said this often before and I never get a response: why must single payor/MFA put all of the private insurance industry out of work? Claims processing requires labor. That need for labor isn't going to evaporate if it becomes a government job. I am aware there is probably a different level of labor required. Especially since for profit insurance spends so much effort finding excuses not to pay. Really. I worked for a couple of hospitals doing billing, collections, and cash posting years ago. I was promoted to analyst and did the professional services reporting for six years. I can tell you that hospitals and insurance companies are locked in an eternal struggle to chisel and cheat each other. The party who gets screwed is you. Because you engage them as an individual with no power. Getting back to my main point, the medicaid system in my state is subcontracted out to be administered by for profit insurance companies. If you have the APIPA medicaid (it's called AHCCSS "access" here) plan your claims will be processed by United Healthcare employees who work for that section. A job did not evaporate because of this. Why couldn't MFA work that way. How could it not? Unless Medicare has some supercomputer that does all the work you need people to do this stuff. And the people who know how already work for Aetna, Blue Cross, et all. Yes, a (hopefully) 100% reduction in executive hookers & blow. And probably a few FTEs trimmed from the denial department. But not extinction.
How to end most private insurance in two easy steps:
Everyone is automatically granted public insurance.
Every provider is required to accept public insurance payments.
Since the US government literally cannot run out of US dollars, those are the only two things required.
There will be problems, of course.
The ACA offered a starting point for what should be covered. I think the Sanders proposal is much more comprehensive and represents what public healthcare should be in this wealthy, advanced nation.
Offer a retraining and placement guarantee for displaced workers. (That includes the insurance relations people at providers.) Some of them will move into different provider orgs, others will sign on with the government, still more will change industries.
If there really is a hue and cry from the investor class, nationalize those insurance companies. Pay off shareholders using some reasonable calculation of share value, then dissolve the companies. Firms that operate in other markets or industries might spin off their insurance operation as a separate business unit to be nationalized and liquidated. All that private capital tied up in insurance is suddenly available for investment in other markets. (Finance loses their low-cost float, of course, but that's a feature instead of a bug.)
Offer incentives for providers to engage in holistic care. By that I mean going beyond treatment to examine other factors (home environment, stressors, access to a drugstore, etc.) that might contribute to recurrence or complications. Better results should justify better payments. Other innovations should be supported too; the idea is to get providers to effectively treat the person instead of billing the most profitable procedures.
Allow the program to negotiate drug prices with manufacturers. Part of that includes building a federal generic drug manufacturer of last resort so that no compound can be exploited as an orphan drug ever again. Another part includes big-picture options like the power to offer a buyout deal for a drug instead of paying per-dose, or a fixed-value bounty for drugs of a certain class (like last-resort antibiotics) that have poor economic incentives.