Before addressing the merits of one over the other, it is necessary first to define what is meant by each of these terms for the sake of clarification.
It’s difficult sometimes to be sure what people mean by the term "Single Payer". It’s quite possible that it varies. Therefore, for the purposes of this diary, Single Payer is defined as a government health scheme for all that excludes the existence of private health insurance.
"Universal health cover", on the other hand, denotes a government health plan for all that coexists with private health insurance.
The distinction between the two terms then is that one allows private health insurance while the other excludes it. In a match-up between the two, I am whole-heartedly in favor of universal health cover and against Single Payer. Why? Three main reasons: choice, jobs and a unique opportunity for government that only exists if private health insurers also exist.
Choice is an easy one to understand. Republicans ramble on endlessly about having choice and in this I actually find myself siding with them. While a universal health plan does provide cover for everyone, if the wealthy want to spend their surplus cash on even more coverage, then by all means let them. If it induces them to contribute to wider circulation of their money then that’s good for the economy.
No, they don’t get out of paying their share for universal health care because it will still benefit them in terms of its contribution to medical research, education and staff training as well as emergency cover should they need it. If they don’t wish to get the full benefits from the universal health plan then that is their prerogative.
They may prefer travelling by helicopter – that’s their choice – but it doesn’t mean they get to pay a lesser rate for road maintenance. The road system is still an essential feature of the environment in which they operate. The same argument pertains in contributing to a universal health plan.
It is also a boon to government finances when a section of the tax paying community chooses not to use the government service. This frees up government funding so there’s more to spend on lower income people, medical personnel training and medical research.
Job loss is a major consideration in choosing a universal health scheme over single payer. Of course there will be some job loss from the private sector when a universal plan is introduced but those losses, by and large, would be quickly absorbed into the government’s health sector.
Eliminating all private health insurance, on the other hand, would instantly dump hundreds of thousands of jobs on the employment market, too many for the government sector to absorb at once and too many for which the government has no need such as those workers from accounts and promotion departments. A government health plan for all is not going to be sending out accounts to any of its clients nor will it have any need to promote itself in the market when it already encompasses everyone.
Turning thousands from employed into unemployed virtually overnight would deal a heavy blow to the economy and that’s the last thing a new government health plan needs to herald its introduction. It’s not just the bad publicity it would generate (though that would be severe and ongoing) but a huge new government initiative like universal health cover needs a healthy economy to ensure a successful launch and wide-spread acceptance.
The third argument for universal health cover coexisting with private health insurance is the opportunity it offers government to enter the private health insurance market. Okay, private government insurance must sound like an oxymoron but, surprisingly, it does actually work.
As far as I know, it was Australia which first cottoned on to this idea (and a conservative government which introduced it, bless them – they’re good for some things sometimes!) and it’s a very clever idea with multiple advantages. Australia’s universal health plan is Medicare (though it differs considerably from its American namesake) and its private health insurance business is called Medibank.
Medibank operates exactly like any private insurance business but with these distinct advantages:
- there’s no CEO receiving an outrageous salary and bonuses (effectively the Health Department is the CEO),
- where possible, they work out of government buildings and even in tandem with Medicare staff in smaller locations,
- the above two points result in lower operating costs which means they can afford to offer insurance at very competitive rates,
- all their insurance plans are effective nationwide – not a single one of them is state- restricted,
- they are in the best position to design their plans to neatly dovetail with Medicare coverage,
- it would provide more jobs to those losing theirs in the private sector, including workers experienced in accounts and promotion,
- all profits from Medibank go towards funding Medicare.
There is also another unexpected but very useful advantage: just by their very existence, they are acting to effectively regulate the private health insurance industry without the need to designate and enforce a long list of formalized government regulations and restrictions. In Australia, the private health industry was quick to realize that, in order to compete with this new player in the market, they had to at least match what they were offering in terms of quality-assurance and content.
Medibank offers comprehensive family plans so they had to follow suit. Medibank offers a basic core plan with a buffet of add-ons chosen by the client so private insurers had to follow suit. Medibank has no caps and offers plans with no out-of-pocket expenses so the private sector had to follow suit. It works very well!
Other obvious advantages of universal health cover remain the same as it would in the case of a single payer scheme:
- all Medicaid, Medicare and ACA funding would be channeled into the universal health scheme thereby providing its start-up operating cost,
- the 2-3% tax on all incomes above $36,000 (randomly chosen by me – the cut-off in Australia is actually much lower) to fund the program would replace current private health insurance payments required by the ACA,
- as Senator Bernie Sanders demonstrated in a recent hearing, businesses would no longer have any reason to provide health insurance for employees thereby freeing up money for wage rises, paid sick leave and business investment in worker’s compensation insurance to cover work injuries.
I’ve long been concerned by Single Payer being perceived as the best future for American health coverage – that is, if I’m assuming rightly what is generally meant by the term. If I am or if I am not, either way I hope readers will find in this diary some ideas worthy of consideration.
Healthcare for all means a healthier and fairer America so let’s make sure we fully explore the options in order to choose the best and most effective plan for America’s future.