PICTURE if you can Bernie Sanders, the democratic-socialist senator, as a young lad of four. That is how old Mr Sanders was in 1945 when Harry Truman announced his vision for single-payer health care, in which the government pays all costs. Lyndon Johnson, backed by crushing congressional majorities, resurrected the idea in 1965 when he signed laws creating Medicare, government-run insurance for the elderly, and Medicaid, a programme for the very poor and disabled. Now at the age of 77, Mr Sanders would like at last to enact a single-payer system under the banner of “Medicare for all”.
The idea is now rather popular. When polled, nearly 75% of Americans declare a favourable view—as do 87% of self-identified Democrats. Ahead of the mid-terms, fealty to the idea has become a litmus test for progressive voters. The popularising of Medicare for all is largely owing to Mr Sanders’s evangelising during the 2016 presidential primaries, when the idea was lampooned by Hillary Clinton as unworkable. Since then, five likely Democratic presidential contenders—Cory Booker, Kirstin Gillibrand, Kamala Harris, Mr Sanders and Elizabeth Warren—have endorsed Medicare for all. Should one of them win, the expectation that he or she would act on the slogan will be enormous.
First, though, Democrats need to decide what Medicare for all actually means. The details of health policy resemble brain surgery; the appeal of a slogan is that nobody need bother with the stultifying details. Some Democratic politicians and left-of-centre think-tanks have put forward more modest proposals under the aegis of Medicare for all. They include: allowing more people to qualify for Medicaid (government-provided insurance for the poorest), lowering the age requirements for Medicare and introducing a so-called public option, a state-run insurer to compete with existing private ones. These are more accurately labelled as “Medicare for more”, says Sara Collins of the Commonwealth Fund, a health think-tank. The virtue of these ideas is that they are incrementalist and would require less federal spending than a fully fledged single-payer system. Their chief shortcoming, as Robert Blendon, a professor of health policy at Harvard puts it, is that “terms like public option don’t raise the blood pressure of the public”.
As a result none of these proposals has received as much attention as the detailed plan put forward by Mr Sanders, which goes the full monty. Medicare would become the single payer of all insurance claims. It would be free at the point of use. Premiums, deductibles and other payments would be nearly eliminated. It would also up-end the health-care system by doing away with employer-sponsored insurance. The majority (56%) of working-age Americans are enrolled in these schemes; 71% of those covered by them say they are content. Unlike the other Medicare-for-all pitches, if you like your plan, you most certainly cannot keep it.
To fund all this, federal spending would need to increase by an estimated $32.6trn over ten years. If the government used its power to reduce the costs of drugs and of administration this could, according to an estimate by the Mercatus Centre, a think-tank, result in $2trn less health spending overall otherwise.
It would still be hard to get through. “While the taxes are upfront and real, belief in savings down the line requires some faith,” says Larry Levitt of the Kaiser Family Foundation, a health-policy think-tank. Republicans derided the much more modest Obamacare as spendthrift socialisation of American health care. Even Democratic-led states that pondered enacting single-payer on their own balked when the cost became apparent. Efforts in Vermont, Mr Sanders’s own home state, stalled once it became clear that an 11.5% surtax on payrolls and premiums up to 9.5% of income would be needed to fund single-payer insurance. Public support drops sharply once voters are reminded that taxes would have to rise to pay for Medicare for all.
The problems identified by Mr Sanders are nonetheless real. America is alone among large, developed countries in lacking universal coverage. Even after Obamacare, 12% of adults are uninsured. For this Americans pay 17% of GDP, the most in the OECD club of mostly rich countries. Government-run health programmes can reduce costs by eliminating administrative costs, private profits and using their dominant positions to keep prices low. But none of the European systems from which Mr Sanders draws his inspiration are purely single-payer. Many use a mix of public programmes and supplementary private insurance to ensure universal coverage. Cost-sharing, along with subsidies to those who cannot afford it, are the norm.
Nor is Medicare itself so simple. As currently constituted, Medicare coverage is separated for hospitals (Part A), other medical costs (Part B) and prescription drugs (Part D). Part C allows for privately run Medicare Advantage plans that offer supplemental service and replace Parts A and B. Got all that?
For most Americans enrolled in the programme, none of these services is actually free at the point of use, as Mr Sanders’s bill proposes. The agency that administers Medicare issues regulations that hospitals say impose billions in additional compliance costs. Coding procedures for billing purposes is now a cottage industry employing 206,000 people—and is projected to grow at 13% over ten years. “Arguably it has too much coverage in some dimensions. It pays for every treatment under the sun as opposed to Medicaid or the Canadian system. But it’s completely lacking in catastrophic coverage,” says Amy Finkelstein, a health economist at MIT who recently won a MacArthur genius grant. Medicare does provide health-care at decent cost, but it is nothing like as efficient as its devotees claim.
A more pragmatic agenda would focus on boosting competition in health-insurance exchanges and reversing the cuts, regulatory changes and work requirements imposed by the Trump administration. Even this would take a lot of legislation. If Democrats finished all that, they could then allow customers to buy Medicare coverage from the government (the non-coercive, “public option”). The difficulty with this agenda is that it does not fit onto a bumper sticker. The advantage is that it might one day get through Congress.