Would Single-Payer National Health Insurance Break the Bank?

A common myth among opponents of single-payer national health insurance (NHI) is that it would cost too much and break the bank. This belief is based in part upon an assumption that patients would overuse health care if they gained access to it without any cost-sharing when they seek care. Cost-sharing has been a lynchpin of consumer-directed health care (CDHC) since the early 1990s, which assumes that patients who have more “skin in the game” — through deductibles, co-payments, and other out-of-pocket costs — will make more prudent decisions about their own health care. But that policy and assumption have been discredited by actual experience over the last 25 years. In fact, the more cost-sharing is imposed on patients with higher deductibles, co-payments and out-of-pocket costs, the more they underuse care by delaying or avoiding necessary care. Moreover, when Canada shifted over to its single-payerfinancing system in the 1970s, there was only about a 5 percent increase in their use of health care, mostly for necessary care that had been delayed or forgone.

We have to face some inconvenient facts about what we are already spending — and wasting — in our current health care system, six years after enactment of the Affordable Care Act (ACA) — a misnomer given the following facts:

Critics of single-payer NHI fail to recognize that it would actually save money, even while providing universal coverage for our entire population for comprehensive health benefits, including inpatient and outpatient care, prescription drugs, dental care, mental health services, and long-term care. NHI will be funded by a progressive tax system based in large part on payroll taxes, whereby 95 percent of Americans will pay less than they do now for their insurance premiums, deductibles, co-payments, actual care, and out-of-pocket payments. People with annual incomes of $50,000 would pay $1,500 in payroll taxes, $6,000 for those with incomes of $100,000, and $12,000 for those with incomes of $200,000.

Opponents of NHI use disinformation and distortion of its costs in the everyday debate over health care, especially during this election season. Reports of other studies ignore the savings that Friedman has projected, such as that by Kenneth Thorpe, economist at Emory University, who underestimates administrative savings with single-payer and ignores other savings, such as elimination of subsidies and savings on drugs and medical equipment. Seemingly unaware of these savings, Hillary Clinton, as theDemocratic presidential candidate, without apparent concern for the growing costs and unaffordability of care, restricted access, and flight of large insurers from theexchanges, contends that it would put a heavy tax burden on the middle class and still does not support NHI (although in 1994, in the absence of health care reform, she called it inevitable by 2000!)

The costs of health insurance and health care are now exceeding $25,000 for a family of four with employer-sponsored PPO coverage, making the costs of care less affordable all the time. Continuing the ACA or repealing/replacing it with a Republican “plan” will only make matters worse. We have to recognize that private insurers are gaming the system to their advantage and holding us up for more generous bailouts as they exit the ACA’s exchanges in droves. We can no longer afford their greed and wasteful bureaucracy. As access to care is further restricted by their higher premiums and narrower networks, we can only expect growing political backlash across the political spectrum.