Wayne O'Leary

The Single-Payer Imperative

What do Warren E. Buffett, chairman and CEO of Berkshire Hathaway, and Sen. Bernie Sanders, Vermont populist and recent presidential candidate, have in common? No, it’s not their unruly shocks of white hair. Neither is it their political affiliation; Buffett is a mainstream Democrat, Sanders an independent socialist. Nor is it their respective bank accounts; Buffett is one of the richest men in the world, Sanders one of the poorer members of the US Senate.

What they share, surprisingly enough, is a belief in the need for an American single-payer health-care system. Sanders’ brief for the single-payer is well known; it’s broadly philosophical and premised on the idea that health coverage should be a right of citizenship, not an income-based privilege. Buffett’s support for the single-payer, which he shares with his Republican business partner, Charles T. Munger, is more specific and (some might say) practical; he maintains that a universal, government-run program is key to America’s economic success.

As Buffett sees it, most of the nation’s CEOs are foolishly enthralled by Donald Trump’s promise to cut corporate taxes, when logically they would be better served focusing on the need to reduce national health-care costs, which (because of our largely employer-based insurance model) are disproportionately borne by business. Buffett backs up his claim with statistics: While US corporate taxes have fallen as a percentage of gross domestic product (GDP) from 4% in 1960 to 2% today, national health-care costs have ballooned from 5% of GDP circa 1967 to 17% at the present time.

Even more telling, Buffett informed attendees at his firm’s annual May meeting, America’s economic competitors (and their companies) mostly enjoy publicly financed nonprofit health systems, and therefore spend much less on medical care than we do. For example, compared to the US at 17.1% of GDP, Germany’s health burden registers 11.3% of GDP, the UK’s 9.1%, and China’s 5.5%. And although health costs in those countries are growing, they’ve risen at half the rate of America’s health cost inflation over the past 20 years.

Warren Buffett is a shrewd businessman, and he recognizes a government-run health system is in his vested interest, freeing up company revenue for investments beyond the purchase of employee health plans; yet, he’s also a humanitarian conscious of the moral necessity of providing for the health of his workers. His answer is a universal, tax-funded system, perhaps along the lines of the federal Medicaid program, with an opt-out provision permitting the wealthy to purchase “concierge” medicine instead, if they so desire.

Bernie Sanders might not approve of the opt-out for millionaires and billionaires. Nevertheless, Buffett’s two-tier single-payer proposal still puts him miles ahead of most corporate CEOs and the likes of Republican politicians Paul Ryan and Mitch McConnell, who would relieve American business of the cost of employer health plans by simply repealing the current legal requirement mandating companies of 50 or more employees to offer workers health packages or face monetary penalties.

It might be reasonable at this juncture to ask why the US has never sensibly adopted something like the Buffett plan or the Sanders “Medicare-for-All” program — why we persevere as the only major industrialized country trying doggedly to make free-market health care work against all logic and experience, imposing a drag on our economy in the process. The answer is political.

The Democratic Party — it would have to be Democrats, because the GOP would never do it — has been unable to summon the nerve to take on this fundamental reform; California’s recently tabled single-payer initiative illustrates the fear factor in action, as did Vermont’s similarly aborted 2015 attempt. Democrats know the single-payer would be the fight of their lifetimes, and they don’t yet have the necessary emotional commitment to carry through on it. For the party’s present officeholders, single-payer is something idealistic to aspire to in the abstract, but lingering folk memories of Reaganite attacks on “tax-and-spend liberals” invariably bring them up short.

So, this generation of Democrats has settled for the Rube Goldberg contraption called the Affordable Care Act, as an achievable free-market add-on to close some of the glaring gaps in our present hodgepodge system. The ACA, remember, was largely designed in the bowels of the Heritage Foundation as a conservative alternative to the single-payer proposals advanced by countless progressive Democrats from FDR to Ted Kennedy. Barack Obama simply confiscated it and made it his own, unpopular individual mandate and all. The chronic problems of the program are themselves testimony to the dysfunctionality inherent in free-market health-care systems dominated by private insurance companies and guided by the profit motive.

Yet, we persist. Post-ACA, Americans remain captive to a predominantly employer-based private health-insurance structure run by the less enlightened of Warren Buffett’s CEO colleagues. At the end of 2016, the Kaiser Family Foundation reported, half of all Americans (49%) still obtained insurance coverage through a job, and a small additional number (7%) through the individual private market, including the ACA exchanges.

Those covered by a company plan were obviously not living the health-care dream. Another Kaiser survey from last September detailed the slow unravelling of the jerry-built employer market created over the past half-century. Company managements, which are being squeezed by big insurers, are passing costs on to their workers (no longer protected by unions), squeezing them in turn. Private, job-based health plans, once a generous employment perquisite, are becoming skimpy, high-deductible plans increasingly paid for by the workers themselves.

Average employee deductibles ($1,500) have tripled since 2006, and monthly premiums have outpaced income growth by a factor of four since 1999. Private-sector workers now contribute one-third of total yearly premium costs.

Meanwhile, in the individual market, including the ACA exchanges, similarly disturbing trends have emerged: a proliferation of restrictive high-deductible plans, annual premium-rate increases (up an average of 22% on the exchanges for 2017), and the abandonment of the exchanges altogether by large insurers (UnitedHealth Group, Aetna, Humana) bent on higher profits and lower costs.

A third of US counties are down to just one monopolistic ACA insurer — what Yale’s Jacob Hacker calls a kind of privatized single-payer. Perhaps it’s time at last for the genuine article.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, September 1, 2017


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