I am following up on my last post regarding healthcare – and the different approaches in the Democratic primary.  I am going to do my best to (over)simplify the differences between Single Payer and Public Option approaches.

Single Payer (or “Medicare for All”)

There are a lot of positive things to be said of a single payer system, and most of the top tier candidates actually agree that this is the right aspirational goal for healthcare in the United States.  However, only Sanders* and Warren are still pushing for a Medicare for All right out of the gate. 

The benefits of a single payer system are pretty significant:

1. Negotiating power for prices of healthcare and prescription drugs will mean lower overall costs to patients,
       
2. A single payer system eliminates a huge amount of the overhead costs (for providers and the insurer), which will mean lower costs passed along to patients,
       
3. There will be higher incentives to focus on preventative care and community health initiatives to keep all Americans healthier and costs lower, and finally,
       
4. All Americans will be covered, allowing us to start working on the systemic injustices that have impacted the health of lower income communities, including rural communities and communities of color.

Most people think of cost as being the primary downside, but it’s too simplified to think of “cost” as a single issue here.  In aggregate, the cost of healthcare will decrease.  America will spend less and be healthier.  Insurance premiums will go away, most visits and procedures will be fully covered, and you’ll have little to no out of pocket costs for prescriptions.  For most Americans, healthcare costs will decrease.  

The actual downsides are… complicated.  

Sanders acknowledges that taxes will go up to cover the cost of healthcare.  That will impact different groups in different ways:

• For most Americans with health insurance today, the increase in taxes will be less than the decrease in insurance and healthcare, decreasing overall cost.
• For anyone paying for insurance out of pocket now or anyone who has maintenance medications and numerous doctors visits, your costs will undoubtedly decrease significantly.  
• If you do not currently have health insurance and you never go to the doctor or have any healthcare expenses, the increase in taxes will not be offset by any reduced costs for you immediately.  (On the flipside, bankruptcy due to medical bills will no longer be a thing that happens, and you will have access to care.)  
• If you are extremely wealthy, you will pay more in tax increases than will be offset by a reduction in healthcare costs.  (But your community will also be generally healthier and health risks overall will be reduced.)

Elizabeth Warren has pledged that taxes to cover a Medicare for All plan will actually not come from an increase in middle class taxes at all, but would come from tax increases in other places (corporate taxes, taxes on employers, wealth taxes, and tax increases on the wealthiest Americans).

It is also true that it may be more difficult to schedule appointments and access providers, as there will be more people with access to care.  More patients with the same number of healthcare providers will be a difficult problem that will require innovative solutions.

And in Elizabeth Warren’s plan, healthcare providers (doctors, hospitals, etc) will be required to accept lower costs than they do now for many procedures.  Ideally, this could be offset with the savings on overhead in managing insurance, but it’s not clear that this would be true.

The bottom line is that Single Payer is a very big shift in the way that Americans think about healthcare.  In theory, it’s the most cost-effective and efficient way to get healthcare for all Americans, but the transition to change our thinking and to change the industries that support healthcare would be tough.

Public Option (or “Medicare for All Who Want It”)

The public option approach essentially allows any American the option to select a health insurance plan that is managed by the federal government.  In other words, regardless of age, you could choose to enroll in Medicare instead of your employer’s plan. Those that do not have an employer option for health insurance today, and can’t afford private insurance, would be automatically enrolled and covered.   

In my opinion, Mayor Pete Buttigieg has articulated the clearest vision of this approach, although many of the other candidates have proposed similar programs.  

The advantages of a public option are also pretty significant:  

1. Negotiating power for healthcare costs and prescription drug costs increases, and increases more as even more and more people enroll;
2. Overhead costs start to decrease (albeit not as quickly or dramatically as a single payer option, given that private health insurance still exists);
3. All Americans have an affordable option to buy in for insurance, with advantages in overall public health;
4. Unlike single payer, it provides a choice for consumers, and so private insurance companies are now incentivized to compete with the public plan, potentially lower costs and increasing innovation and other perks;
5. Because individuals buy into it (ostensibly with premiums based on income), the full cost of the program doesn’t have to be “made up for” in taxes or other revenue streams.

There are disadvantages, though – particularly over a single payer system:

• Success of a public option depends a great deal on individuals choosing to adopt the plan.  More importantly, it depends on healthy, young people to be included in that group of people who buy into the plan.
• There is less negotiating power and not as great of a decrease in overhead costs as a single payer system, as private insurance still exists.
• There are still program costs to be covered by the federal government, as more individuals would be covered by insurance that is fully or partially subsidized.

For many, including Buttigieg, the assumption is that a public option approach will eventually lead to Medicare for All.  If the government provided program (“Medicare”) is a great option with lower costs and better coverage, then lots of Americans will want to use it.  As more people move over to it, private insurance companies either find a way to compete and offer better plans, or they simply start to fade away. 

Where do I land?

I am for a public option, rather than a straight transition to Medicare for All.  Even though I know all of the benefits of single payer, I’m naturally risk-averse; the public option approach is still a huge step forward in terms of the accessibility of healthcare coverage for all Americans, without requiring an enormous change quickly.  (For the same reason, I think it is also politically the better option, as it allows more people to get on board with change in phases.)

As always, if I said something incorrect or incomplete, please feel free to correct me in the comments.  If I was wrong, I’ll definitely update the post to ensure accuracy.  

Also, I do think there will be a third part in this series to address myths, because there are a lot of them out there related to the healthcare debate.

* I really dislike the arguments between candidates and their supporters about which candidate came up with an idea “first”.  However, I do feel the need to give credit to Sanders here, as this really has been one of his hallmark issues for decades.