Single-payer Medical Insurance — The Only Way

by David A. Woodbury, 10 December 2018

I suspect that a single-payer medical insurance system could work.  I suspect, however, that it will be a Pigrolet version of government-run medical insurance that will be thrust upon us in the not-too-distant future.  I suspect, I’m sad to say, that it will be a fiscal and practical failure of colossal and damaging proportions, precisely because its designers will have, as their objective, not the success of the program but their own political gain, the avoidance of blame, and the skewering of their rivals.  And yet, I say that I suspect such a system could work if Congress had the will to do it right.  Let me explain how.

Let’s first make clear who’s the payer in the term, single-payer: taxpayers.

Right now we have a mob of payers, or as many of us experience it, payment-avoiders: for-profit insurance companies, not-for-profit insurance companies, state governments administering Medicaid, the federal government administering Medicare and military medical benefits, and ourselves individually when all of those to whom we have paid taxes and premiums run and hide from the bill.

The single payer almost by definition would be the federal government, using money that it will either collect in taxes or using loans that it will commit our great-great grandchildren to pay.

Here are twelve changes to the current mess that would need to be accomplished, fully and resolutely, in order to have any chance of success.

1.  At the outset, fully cover only the medical interventions that keep people alive.  For everything else including prescriptions, let the plan offer a portion of the cost from, say, 50-99%.  Since we already have the precedent of requiring all Americans to purchase a product from a private company and calling the cost of it a tax, let those medical needs that fall outside the scope of life-saving be covered by a required policy for less-than-urgent care.  If a government-run single-payer system delivers the savings and efficiencies and medical wonders that its proponents envision, then, in time, use those savings and efficiencies to bring more services and treatments under the fully covered list.

2.  Let a panel of doctors determine what will fall under the life-saving level of coverage.  Let another panel of doctors prioritize less-than-urgent medical care as well, and how such measures might gradually be added to the fully-covered list over time, as savings and efficiencies make that possible.  Remove all incentives for these panels to save money by denying care; their decisions are strictly medical and patient-focused.  They will be able to recognize that what is merely desirable for one patient is life-saving for another because individual patients have unique vulnerabilities.  Nowhere does this point include politicians, insurers, lawyers, or the IRS in any panel of doctors.

3.  Let the federal government provide the money, but let private companies, not an army of new federal employees, administer it under contracts with the federal government.  By “administer it” I don’t mean “decide whether Janet’s E.R. visit was justified” — that is up to the doctors in the previous section, speaking for the country as a whole — but let private companies manage the record-keeping, and while they’re at it, the electronic medical records.  Companies that already have the system in place to administer insurance for which they currently collect the premiums might transition readily to keeping records only and not handling the money.

4.  Relieve employers of the expectation to provide group medical insurance — group rates will become obsolete under a single-payer system anyway.  For employers who therefore will no longer be funding a portion of medical insurance, arrange that those savings will either be converted to other employee benefits over time or added to a company’s tax burden, in either event to be phased out just as employers are no longer tasked with providing stables for employees’ horses.

5.  Get the for-profit insurance companies out of medical underwriting, premium administration, and determining appropriateness of care.  Let them collect profits on their automobile and home policies, business underwriting, and all the rest.  This is necessary for two big reasons: There is no excuse for transferring taxpayer money to private profits in the name of medicine, and to let insurers profit from taxpayers only “proves” that Congress is owned by corporate America.  Yes, there are examples of companies that do profit from government contracts, Defense Department contracts being the most recognizable examples, however there is nothing so mysterious about the concept of insurance that it justifies seven-digit executive salaries at taxpayer expense.  Under a government-funded program they will be tasked with keeping records and could, as well, be the best resource for keeping electronic medical records that are instantaneously available to all doctors.

6.  Get the lawyers out of medicine.  This is the most radical requirement.  They will rise up in protest, but I doubt anyone can show me another country in the world where the lawyer class is so comfortably supported by people who require medical care.  For, no matter who a lawyer works for under the umbrella of medicine, it is the sufferer who ultimately pays.  Whether employed by hospitals, specialty practices, pharmaceutical companies, equipment manufacturers and importers, insurance companies, tort practices, or government agencies dedicated to assuring “compliance,” lawyers in the industry can only be supported by those who pay insurance premiums or taxes, and to a minor degree, by foundations providing charitable funding and university medical centers supported by tuitions and benefactors (charity again).  Those are the only sources of money coming into medicine.  Supposedly, lawyers oversee everyone’s work the better to protect us.  But the regulations that have made them ubiquitous are tantamount to requiring a traffic policeman on every corner of every intersection in the country.  We don’t need that much watching.

7.  Combine all programs into one.  Entrenched federal agencies will scream in agony and rage at the idea.  But chaos is assured in a transition to a single-payer system if Medicare remains distinct, both in name and practice, from Medicaid, from Champus, from Veterans Administration programs, and all the rest.  Indeed, from my ample experience, the way the Veterans Administration provides medical care is an example for the rest to follow.  Since health insurance portability is moot for someone covered by the VA, apparently HIPAA (health insurance portability) does not apply.  Under a single-payer system, HIPAA will become obsolete.  During VA visits, am I not inundated with demands to sign copies of that grossly-misnamed Advance Beneficiary Notice, not to mention all the privacy notices and lists of my rights that I must endure in civilian office and hospital visits.  And the VA is clearly not intimidated by the assumed secrecy provisions of HIPAA.  Yes, basic privacy protocols are observed, but the concept has not been turned into a requirement to speak in coded whispers.

8.  Start small, as detailed in the first point, and call the fully-funded part of it, for instance, Part A; but also require minimum coverage at each citizen’s own expense for additional needs, and call it Part B.  Everyone is covered 100% for life-saving interventions — no co-pay, no premiums.  For each citizen who asserts an inability to afford the premiums of Part B, reduce that individual’s reverse income tax (welfare benefits) by the amount of the unaffordable premium.  This has already been put into place under the Affordable Care Act.  Medicare and Medicaid currently recognize the totally disabled and make allowances, and these allowances need to remain in place.  There is a difference, though, between a person who is totally inconvenienced — for instance, one who won’t pull himself up by his own bootstraps, and a person who is totally disabled — for instance, one who was born without bootstraps.

9.  Place all citizens, including all government employees, military personnel, and members of Congress, under the same system with no special privileges.  And what applies in Poughkeepsie, New York, applies in Muleshoe, Texas, and in Kailua, Hawaii, and in Dothan, Alabama, if for no better reason than that people travel and people move and need to rely upon rules that apply equally to all of us.

10.  Continue to permit private pay and private doctors for anyone who can afford to arrange it, as it currently exists in a few instances.  If a rock star or movie mogul wants to put a private doctor on his staff, let them.  Such a person must also participate in the single-payer system as well but is not required to use the same doctors if he can afford to own one.  Also, respect the town here and there that has hired a community doctor where the citizens of the town have pooled their resources to engage one.  Members of such a community must likewise participate in the single-payer system as well, but they must not be forbidden to provide themselves with other options.

11.  Allow all citizens to participate at the same level of premiums and care, that is, do not penalize those who have assets.  A single-payer system must not be a ruse by which to seize private property.  Medicaid has become just such a system, to the extent that people avoid enrolling because it means losing their homes and their meager personal assets.  Just as the premium tables under the present system make no distinction whether the participant earns $50,000 a year and has no assets or earns $900,000 a year and has a portfolio worth millions, so it must be under a single-payer system.  It must, to the greatest degree possible, divide the total cost of everyone’s care as evenly as possible among all participants without regard for ability to pay.  The ability to pay, or lack of ability to pay, must be dealt with separately.  This point is fundamental, because the temptation will be strong to sock it to the rich.  Insurance of every type is originally something that people would buy, if they chose to, in order to reduce the financial burden arising from an unexpected, sometimes catastrophic event.  Conceptually, medical insurance is the same, but differs from all other types only by its emphasis on saving one’s life.  Since medical science has made that all the more realistic in my lifetime, and since that objective has become exceedingly important to most people not just for themselves but on behalf of everyone else, and since some level of medical care, although not even vaguely delineated, is now sometimes demanded as a “right,” it needs to be the objective of adopting a single-payer system to achieve a basic level of coverage for everyone, not to use the process to fundamentally transform the United States of America.  (Disempowering and disemprivileging certain populations — insurance companies, lawyers, and members of Congress — who should never have acquired their present levels of power, may seem like it is fundamentally changing the country, but the country will not suffer if those groups are humbled to more closely resemble the rest of us.)

12.  Fund the system with a national sales tax that covers only the system and make it pay for itself.  Since the so-called income tax has become a wealth redistribution system, funding a single-payer medical insurance system through the IRS needs to be avoided altogether.  (Medicare taxes, collected through employers since 1966 and now standing at 2.9% of income, would become obsolete.)  People with low incomes don’t buy a lot of stuff, so their contribution by way of a sales tax would be self-limiting, while people with high incomes do spend it, even if they merely use their buckets of money to buy stock.  Tax their stock purchases, then.  (Leave IRA and similar retirement plan contributions alone.  The national sales tax will hit those funds when they are actually spent in later years.)  Funding a single-payer system with a national sales tax makes it easy to determine whether the system is paying for itself, and if it is not, then Congress can raise the sales tax until it does.  Make it pay for itself and make it pay only for itself, make its accounting transparent, and don’t use the sales tax for other pet political schemes.

There is more to my wish list than these criteria.  These, though, are the necessities for any hope of success, and any attempt at creating a single-payer medical insurance system which omits any of these requirements will fail with the drama and suffering of an airplane crash in a residential neighborhood.  Perhaps someone else could suggest a few more absolute requirements that I would agree with.  I don’t harbor any delusions, though, that Congress will act with the resolve necessary to make it work.