The Case Against Single-Payer

Progressives have increasingly embraced the idea of “Medicare for All,” but a public option would more tangibly ameliorate our healthcare woes.

Cast out of government, the Democratic Party is up for grabs. And single-payer healthcare has become one of the key fronts in the battle to define the party’s future.

Take the special election in Georgia’s sixth congressional district, where Democratic candidate Jon Ossoff recently found himself in hot water with progressives for his failure to endorse single-payer. “I think we should be focused on incremental progress based upon the body of law on the books,” Ossoff explained, “rather than going back to square one and proceeding from a starting point of ideological purity.”

This sparked a wave of skepticism of Ossoff among a segment of the left. When asked whether Ossoff is a progressive, Sen. Bernie Sanders flatly answered, “I don’t know.” Sanders’s aides pointed to Ossoff’s silence on single-payer as one reason for progressives to be lukewarm toward his candidacy.

Ossoff’s campaign has been analyzed through the prism of the Democratic Party’s internal fight. His incremental theory of healthcare progress eschews Sanders’s social democratic revolution for the pragmatism of Barack Obama and Hillary Clinton. And while some urge Democrats to adopt a more distinctly working-class politics, Ossoff’s high-profile candidacy in a suburban district has kept a middle-class appeal at the party’s forefront. “Ossoff is showing us the path to retaking the House,” tweeted former Clinton aide Brian Fallon. “It runs through the Panera Breads of America.” To which Jacobin magazine contributor Matt Karp quipped: “Two paths forward for the Democratic Party: Medicare For All, or the Fuji Apple Salad with Chicken.”

Meanwhile, progressive enthusiasm for single-payer healthcare is ascendant. Buoyed by the fiery collapse of the GOP’s Obamacare repeal effort, progressives have been quick to promote single-payer as the next horizon in health reform. Rep. John Conyers’s perennial single-payer bill quickly racked up more House co-sponsors than ever before.

There’s a lot to like about single-payer healthcare, but making support for single-payer a litmus test for true progressivism dismisses the learned wisdom of recent generations of health reformers. There might be a better way to make progress toward the vision of single-payer—one grounded in the center-left tradition of pragmatism and incremental reform.

On the surface, single-payer tends to be a popular idea. Polls often find a majority of Americans supporting government-provided health insurance. Sarah Kliff of Vox recently ran a focus group of Trump voters, and half of them backed single-payer as a fair solution to the woes of our healthcare system.

But when you bore into the details of single-payer, this support collapses. While 50 percent of those polled by the Kaiser Family Foundation supported guaranteed health insurance through a single government plan, more than a third of single-payer backers changed their minds after hearing the arguments from opponents that it would require many Americans to pay higher taxes and would hand government too much control over healthcare.

Results like this suggest that many Americans are single-payer supporters in theory, but skeptics in practice; while they like the abstract notion of a streamlined, government-run health insurance system, they are put off by the practical disruption and sacrifices that it could cause in the real world.

Democrats learned this lesson the hard way. Bill Clinton’s failed attempt to overhaul healthcare was resisted by industry stakeholders and consumers alike as overly disruptive to the status quo. Sixteen years later, Democrats keenly sensitive to charges of government overreach set out to maximize coverage for the uninsured while minimizing the threat of disruption to those who already had good insurance.

As Paul Starr explains in Remedy and Reaction, when Democrats tried to avoid repeating Clinton’s healthcare defeat, there was little appetite for anything resembling single-payer outside of progressive circles. In 2007, political scientist Jacob Hacker proposed a healthcare plan that paired a mandate on employers to provide insurance with a Medicare-like public plan to cover the uninsured. But Hacker’s proposal never gained steam because of its potentially deep impact on the healthcare industry. Estimates projected that his public plan could eventually attract 50 percent of the non-elderly population. Medicare pays hospitals about 20 percent less than private insurers did, so a shift of over 100 million Americans from private insurance to Medicare rates would mean financial upheaval for doctors and hospitals. “The proposal was not consistent with Democrats’ interest in minimal disruption,” Starr concluded.

That hard reality steered the Democratic reform effort: just enough people benefited from a flawed system to make root-and-branch reform nearly impossible. As Hacker himself reflected on the passage of Obamacare, “It was this basic political reality—that most Americans had coverage, however costly and insecure, and could be easily frightened into believing that reform would impose losses on them—to which the Democratic policy approach…responded.”

There’s little reason to think that the headwinds against single-payer have faded over the ensuing years. Thanks to Obamacare, more Americans than ever have health insurance—meaning more have reason to be unnerved by future comprehensive reforms. Not to mention the existential uproar from the health insurance industry at being displaced by big government. The battle waged over Obamacare would be replayed ten-fold in any effort to enact nationwide single-payer.

But there’s another way forward. Even if Medicare for All remains a dream deferred, Medicare for More is politically viable—indeed, it’s essential. This would expand the reach of public insurance by letting more people opt out of private insurance and into Medicare and Medicare-like public programs.

The popularity of voluntary public health insurance was apparent even by 2009, when polls at the time showed 64 percent of the public supported a public plan to purchase health insurance, versus just 22 percent for single-payer. The public option was more popular than single-payer even among progressives.

Democrats in Congress and on the campaign trail proposed a public option to compete with other private plans on marketplaces where the uninsured could shop for coverage. The public option quickly became central to progressive support for the reform effort—a chance for liberals to prove that government-run insurance can work for the public at large.

To soften the impact of the public option on doctors and hospitals, House Democrats proposed to have it pay providers higher rates than Medicare does. The nonpartisan Congressional Budget Office estimated that the public option still would have reduced the federal deficit by $68 billion over six years.

Yet the public option unsettled key Democrats in the Senate. Because of the Democrats’ tenuous hold on a filibuster-proof majority, centrist senators like Joe Lieberman and Ben Nelson held tremendous power to dictate concessions in the healthcare bill, and the public option was steadily watered down in Senate negotiations. Unwilling to sacrifice the broader health reform effort, Obama and Democratic leaders acquiesced to the centrists’ demands and eliminated the public option before the bill became law.

Still, the public option remains a popular idea. A 2016 Kaiser poll found that 62 percent of those surveyed favored a public option for health insurance, while only 32 percent were opposed. What’s more, a third of those opposing a public plan came around after being told that it would drive down costs and expand consumer choice.

Obamacare’s implementation has only bolstered the case for public health insurance in general. The law’s coverage expansion pitted a private insurance expansion (its health exchanges) against a public one (expanded Medicaid). Between the two, the public insurance expansion has performed far better.

The Congressional Budget Office (CBO) expected 23 million people to be covered under private plans on Obamacare’s exchanges.  But in 2017, just 11.5 million actually signed up. And while this coverage has been a literal lifesaver for many, others have been frustrated by limited choices and shoddy, high-cost plans.

Meanwhile, the CBO vastly underestimated the impact of the law’s Medicaid expansion. Even though only 10 million people were expected to sign up, more than 14 million people wound up getting covered. And another 2.5 million people would gain coverage if their conservative-run states expanded the program.

The next phase of reform should lean into the success of Obamacare’s public insurance expansion. The income cutoff for Medicaid eligibility could be raised from 138 percent of the poverty line to 200 percent or more. This would give more working-class Americans alternatives to low-end private plans, allaying the envy that some health exchange shoppers feel toward their Medicaid-recipient neighbors.

And the further Medicaid creeps into middle-class America, the more political and economic clout it amasses. The larger Medicaid’s middle-class constituency, the harder it becomes for politicians to cut. And the more people the program covers, the harder it becomes for doctors to turn away Medicaid patients. Expanding Medicaid to cover more of the middle-class benefits the poor, too.

We should also give older workers access to good, popular public insurance by letting them buy into Medicare before age 65. This would also help stabilize prices in Obamacare’s insurance marketplaces for everyone else. Premiums have risen on Obamacare’s markets in part because enrollees have been older than insurers had hoped. By moving some of the oldest and most expensive people on to Medicare, the health exchanges would suddenly become much younger and cheaper to insure. This would drive down costs for everyone else, and would encourage greater participation among insurers.

Those remaining on the health exchanges would benefit from being given the choice to enroll in a public health insurance option. The strongest public option would be available everywhere and pay something close to Medicare rates. But a public option is most crucial in the parts of the country where private insurance competition is dwindling. More and more of the country is one insurer away from being left out of Obamacare coverage altogether. We should provide a public option as at least a fallback to ensure that private companies cannot veto universal healthcare—a fix that Obama proposed shortly before leaving office

No doubt, these fragmented incremental reforms fall short of the progressive dream of a single unitary national healthcare plan. But in a country where nearly 40 percent of the population already has government-provided insurance, building on existing systems that work would bring millions more into the fold.

“If I were starting a system from scratch, then I think that the idea of moving towards a single-payer system could very well make sense,” Obama said in 2009. “That’s the kind of system that you have in most industrialized countries around the world.”

“The only problem,” he continued, “is that we’re not starting from scratch.”

The historic role of progressivism has been to achieve egalitarian outcomes through the preexisting strictures of American society and its economy. Regardless of the merits of single-payer healthcare in a vacuum, we are not starting from scratch. Path dependency is a real and present force in our politics. Social democratic revolutions, on the other hand, have not been. Medicare for All is a worthy dream. But the prudent political course is to move toward that dream by securing Medicare for More first.

Obamacare operated within our peculiarly American constraints to inculcate the now-widely accepted belief that healthcare is a right. Rather than tearing up this foundation, progressives should build upon it to provide more Americans with access to public health insurance. This work betters the lives of Americans today, while shifting the ground for even greater progressive change tomorrow.

Joel Dodge

Joel Dodge is a writer and attorney in New York City. His work has appeared in Quartz, The Week, The New Republic, and The American Constitution Society.