"Why Not Single Payer?" A Response to Paul Krugman and the Leading Democratic Presidential Contenders. Part 1.

Faster than you can say the word "Sicko" and turn around 3 times, the Democrats' promise of health care for all has gone from "Universal Medicare For All" to "Individual Insurance Mandate". In Monday's New York Times, Paul Krugman defends that reversal in an article entitled "Why Not Single Payer?"

The possibility, after the 2008 elections, of a Democratic-controlled Congress which could pass Medicare For All (a/k/a Universal Single Payer Health Insurance) and a Democratic President who would sign it, could bring about the best chance to enact Medicare For All since Harry Truman first proposed it in 1948.

Yet without firing a shot and with no debate, the leading Democratic Presidential Contenders--Hillary Clinton, John Edwards and Barack Obama--as well as a good part of the Washington progressive infrastructure of think tanks and lobbying groups--have given up the fight for Medicare For All. Instead they propose variations of an Individual Mandate plan developed over the past 15 years by the "moderate" corporate wing of the Republican Party, a version of which Mitt Romney enacted in Massachusetts and which Arnold Schwarzenegger is proposing in California as an alternative to the single payer plan which the Democratic California legislature passed last year that he vetoed.

The thing is, I can't quite figure out why the Democrats are in such rapid retreat from Medicare For All before the first battle has even been joined. Is it another example of the political cowardice by which the only Iraq resolutions that can pass the Democratic controlled Senate are a Republican-driven bill condemning MoveOn.Org. and praising Gen. Petraeus and another declaring the Iranian Revolutionary Guards a terrorist organization? Is it because the Democratic candidates are afraid of being accused by Republicans of supporting socialized medicine? (If so, it won't help because Giuliani, Thompson, and Romney--whose Massachusetts plan Hillary largely imitates--all quickly claimed that Hillarycare 2.0 is socialized medicine, anyway.) Is it because they've been bought off by insurance companies and drug companies or fear that too many other Congress and Senate members have?

Or is it because they think that the insurance companies and drug companies are just too politically powerful to take on: Therefore the only way to insure most Americans is to make a deal with the devil that requires profit-making insurance companies to waive pre-existing conditions and charge everyone similar premiums regardless of age or health, in exchange for Congress delivering them 50 million guaranteed new profit-making customers, partly subsidized by the government?

Paul Krugman's NY Times column is one of the first direct attempts by a liberal former supporter of single payer to try to make the case for adopting the Individual Mandate approach instead. According to Krugman, "basically it looks like something that could actually happen in the next administration, while enacting a single-payer plan...excellent as those plans are, might take a very long time."

First, Krugman argues than an Individual Mandate would not require a big tax increase, although he admits (thus defeating his own argument) that taxes which most people would pay for single payer would most likely be lower than premiums that an Individual Mandate would require them to pay out of their pockets to buy insurance. Second, he argues than an Individual Mandate won't make people feel that they're "being forced into a government plan". But the essence of an Individual Mandate plan is that the federal government forces the uninsured to buy health insurance. It involves even more government coercion than Medicare For All.

Finally, he argues that the Democrats' proposals generally include a Medicare-like public insurance alternative which individuals may buy into and which "would evolve into single-payer over time." Krugman never quite explains how this piece of alchemy will occur. Moreover, he admits that this is the part of the Democrats' plan that the insurance industry will fight "tooth and nail". If the Democrats have already surrendered on Medicare For All without firing a shot, isn't it likely that the public alternative (the "socialized medicine" part) will be the first part of the plan to be compromised away when the legislative battles start in Congress and the insurance lobby starts exercising its muscle with its hundreds of lobbyists and tens of millions of dollars in campaign contributions?

In short, I find Krugman's notion that an Individual Mandate is somehow more politically pragmatic than Medicare For All unconvincing and I don't buy his argument that it's a backdoor way to eventually get there. I even wonder how strongly he believes his own arguments. Only last January, in critiquing Schwarzeneggers's Individual Mandate plan for California as a complicated "Rube Goldberg" device, Krugman argued that "the plan requires a much more intrusive government role than a single-payer system. Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they're poor enough to receive aid, and one to police insurers to make sure they don't discriminate against the unwell." If you then add a public Medicare-like alternative that individuals can buy into, you need a fourth bureaucracy to administer that system.

Thus, when Hillary Clinton claims that her plan requires no new government bureaucracy, she's not being candid with the voters. That lack of candor will quickly be exploited by the Republicans and the insurance and drug lobbies. While Republicans are wrong that her plan amounts to "socialized medicine", such charges will still ring true since, in fact, her plan will require intrusive government regulation of the private insurance industry and coercive action to be sure that all citizens are obeying the individual mandate to buy health insurance. That's one of the big reasons why, once the debate really starts, an Individual Mandate will not necessarily be a popular plan with the voters--Using the political pragmatism test, it stands a better chance of being rejected by the public and meeting the same fate as Hillarycare 1.0 than does Medicare For All, for which the political arguments are simple and clean.

Whatever Clinton might claim, Hillarycare 2.0 in fact requires a highly intrusive government presence in the lives of both businesses and individuals. As with Hillarycare 1.0, this is likely to be the biggest club that Republicans and their insurance company allies will use to defeat her or another Democrat as they did in 1994, unless so many compromises are made to water down the plan that insurance and drug companies decide it's in their interest to accept the 50 million new mandatory government subsidized customers to pad their bottom lines. (Remember that with private insurance, approximately 30% of the healthcare dollar goes to administration, executive salaries and profits, compared to 2%-3% for Medicare; when all the political deals are finally cut, the private insurance and drug industries might find a new government subsidy for their bottom line an attractive deal.) If an Individual Mandate plan is more politically expedient than Medicare For All, it's not for any of the reasons which Krugman cites and not because it's likely to be more politically popular with the voters. The real reason is that with a few backroom political compromises, it could become a that plan the insurance and drug industries could learn to love.

END OF PART 1

Comments

[yappnmutt]

first of all healthcare does not work under the capitalist free market model for several very basic reasons. there is not elasticity of demand. everyone is willing to spend their last dollar to save their life. there is no marginal utility. no one gets tired of receiving healthcare. there are no complements or substitutes for healthcare. quackery and voodoo do not work. the opportunity cost of denied healthcare is morbidity or death. the rational economic interests of the providers of healthcare is to take advantage of the huge dysfunction of the US healthcare model by maximizing profit through reducing availability to good healthcare. there is money in death. these are, in simple form, the reason why the US has the least efficient healthcare system in the world. its the most expensive while treating the fewest percentage of patients.
what to do? model the health insurance industry after the flood insurance program or the hurricane pools that make the gov't responsible for the risk. set up a codified policy that is standard for all health insurers. allow a premium above the actual cost of healthcare for everyone in the nation to prevent cherrypicking policy holders by insurance companies. tax increases in healthcare costs above the rate of aggregate inflation by 100%. all of this could be paid for by a baby bond issued upon birth, held in a separate, untouchable by congress, natinal health account. of course this is a simplistic outline but it would seem to work. problem? what effing problem? the only problem there is is the space betweeen the ears of the participants.

[ThomasDoubting]

"Medicare for All". . .We need a Free, Universal, not-for-profit, single-payer, health care system, as proposed by Dennis Kucinich. What Hillary's corporate sponsors want is forced insurance. Government money paid to the insurance and pharmiceutical industries. . Don't get fooled again. Rather than some convoluted system that only looks like what the rest of the world is doing, while keeping the insurance companies involved, how about a FREE, universal not-for-profit, single-payer health care system ...Dennis Kucinich for President... "Medicare for All!"

[Yasmine]

THANK YOU FOR THIS BLOG.
I BELIEVE THE DEMS REALLY WANT TO DO SOMETHING. BUT THEY ARE ALWAYS AFRAID of the REPUBLICAN ATTACKS.
HOW ABOUT LETTING THE INSURANCE COMPANIES RUN HEALTH CARE(because they will fight for their survival) AND HAVING THE FEDERAL GOVERNMENT PAY THEM FOR EACH CITIZEN ???

[BigNewsie]

How do we eliminate an industry that represents 15% of the U.S. economy overnight? What would day one of Single payer health-care look like? 85% unemployment in Hartford? This has to be done incrementally or it will never happen but we have to start somewhere very very soon.

[rini]

Es tu, Paul???

[jazzman]

I agree. By passing a smoke and mirrors faux reform that satisfies her pharma and health insurance industry lobbyists, she'll be able to say he 'solved' the health care crisis. Everyone will have 'health insurance' but nobody will be any better off. The worst part of it is that once they've checked the health care issue off their list, politicians will go back to ignoring the awful health care plight of the majority of the American people, mostly who have insurance, that was documented and illustrated so well in the film, 'Sicko.' Hillary is a poser and I don't know if I'll be able to hold my nose and vote for her even though I'm a Democrat who dreads the Republicans retaining control of the the White House. But maybe, even with Hillary as President, they will.

[Yasmine]

Health care has become the single most important issue.
I hate the Republicans when they call any democratic attempt at solving this problem SOCIALIZED MEDICINE.
I CAN UNDERSTAND THAT HILLARY WANTS TO BE PRUDENT..........BUT I ALSO HEARD HER SAY SHE WILL GIVE HEALTH CARE........ at the end of her second term.
so, WE MUST ASK HER WHY SHE WILL NOT START OFF HER PRESIDENCY BY ACTUALLY FIXING THIS HEALTH CARE ISSUE.
SO , DEAR HILLARY...........THE WORLD WILL BE WATCHING YOU AND SEE WHAT YOU ACTUALLY ACCOMPLISH AS THE FIRST WOMAN PRESIDENT IN AMERICA.
I HOPE YOUR POLITICAL PRUDENCE IS NOT COWARDICE.

[RnR]

The Democrats and Republicans are the same thing. Corrupt.

Medicare for all is absolutely do-able. Turn the Medicare Part D drug program over to Medicaid to administer (it'll be much cheaper and won't include the criminal "donut hole" b.s. that big pharma put in). Let them use the profits from the Medicare Part D drug program to subsidize Medicare for all.

They will use any argument that big pharma and its' think tanks can come up with to defeat this. Don't let them.

They're bleeding the American people dry in order to fund their war and the Democrats are doing nothing (thanks Nancy).

[WorkingClass]

The Democrats have sold out to the insurance and drug companies. What more do you need to know?

[kasa5400]

The Massachusetts system is in deep deep trouble.

With the subsidized part, lots aand lots are enrooling when it is free (under 150% Federal Poverty Level Income), many are enrolling when it is $35 a month (150-200% FPL), some but not many are enrolling when it hits $70 a month (200-250% FPL) and very few are enrolling at $105 a month (250-300% FPL). With those who have to go out and pay the full price of the approved plans, enrollment is beyond low - like 7000 out of 250,000 after 6 months with a deadline of Dec. 31.

MA had to exempt people with incomes over 300% because they can not afford it - and the exemptions go up to over 600% FPL for families of 3 or more. They guessed that about 20% of those with incomes ocer 300% FPL would be exempt. My projections put it at more like only 20% of those over 300 FPL who are uninsured will be able to afford it.

The point is that the mandatory/subsidized system can not produce affordable coverage - or at least not without far greater subsidies than have been proposed.

However, until it is tried on a large scale and fails to get results, Joe Six Pack won't believe it.

Ergo, give Joe Six Pack the choice of the private insurer and the Medicare-type insurer and see how it shakes out.

As Winston Churchill said "The Americans will always do the right thing... after they've exhausted all the alternatives."

So first, we must exhaust all the alternatives.

[mmogu77]

From Miles
Kasa5400: Thanks for your comment. I'm really interested in more information on how things are really working out in Massachusetts as that's the first test of an Individual Mandate system. Where did you find your information and statistics and is there more where that came from? If you're rereading your comment, please email me and let me know. You can find my email address if you click on my bio at the top of this blog.

[timm0]

Dead on. Well said.

For those of us living in states where you are required to buy car insurance at mandatory minimum levels, this "politically expedient" solution will freshly pick a large, painful, and widely resented scab. The blowback will be intense.

However, the full retreat, never throw a punch approach shown by our Dem leaders continues unabated. I don't have a lot to throw around, but I got e-mails from Dems who are going to give incumbent Dem traitors a primary run - and they now have some of my money. Short of a shock like the creation of a new party by the real progressive Dems to help separate the wheat from the chaff, there's not much hope for any help.

[Doofus]

'According to Krugman, "basically it looks like something that could actually happen in the next administration, while enacting a single-payer plan...excellent as those plans are, might take a very long time."'

Big Pharma, Big Insurance *and* Big Doctors (AMA)
- probably even Big Tobacco - all against a
'Single Payer' plan. 'Socialized Medicine' they say.

We are bound to get there, eventually, but
first we have to try an approach that's
more like what we have now, then fix it.

[jeffmorgan]

If I was a Democrat politician-type plotting to go single-payer, you know what I would do?

-- Throw out a policy that is swallow-able by the most people and keep it high on the agenda in an effort to maximize the Dem victories in '08 and '10 congressional elections.

All the while I would be prepping all the Democrats in office to be or become pro-single payer (you know you got those red-state Dems, gotta lean on them LBJ-style).

Then we should have an sturdy super majority during the next president's first term. None of the top Dem candidates are against single payer, they just opt for the politically safer route; but when one of them is president and congress is lined up ready to go, any opposition could yell loud enough to stop them.

[jeffmorgan]

sorry last line should be *couldn't yell..

[rini]

I would like you to know that not all of us physicians agree with the anti Single payer idea. A lot of MD's were against it in the 90's. Where did it get us? Now HMO's rape the system and take millions of dollars to essentially ration health care. They care more about their stock holders than patients. If the money stayed in the system physicians and patients would be better off.

National Health Care....NOW.

[CriminallySane]

I will not purchase mandated coverage. Let 'em come and drag me away.

I do not subscribe to the notion that welfare for the insurance industry is the way out of our healthcare coverage crisis. To entrust the physical well-being of over 300 million Americans to an industry which primarily functions as a vehicle for generating investment capital seems somewhat misguided, don't you think?

[timm0]

"welfare for the insurance industry is the way out of our healthcare coverage crisis."

That's a great talking point. But, unfortunately, you apparently need to be a craven coward to be a Dem politician these days... they won't see the power in that simple message, much less adopt and wield it in a campaign.

[timm0]

whoops.... errant copy-paste omitted "I do not subscribe to the notion that " from beginning of quote... sorta ruins the meaning...

[Doofus]

If ever you need a reminder that wealth
brings (political) power, this would be it.

[mkolb]

"The thing is, I can't quite figure out why the Democrats are in such rapid retreat from Medicare For All before the first battle has even been joined. Is it another example of the political cowardice ..."

Go visit www.opensecrets.org and click on "who's giving" and, oddly enough, you'll see how many $$$ the insurance and pharmaceutical industries are donating to various candidates and that will pretty much give you the answer you seek. Not to be cynical or anything.