Maggie Mahar’s articles are typically well worth reading, and her take on why a single payer health care system is not a practical or affordable idea for the near future is no exception. The idea stems from the hope of some liberals that conservatives will overturn the Affordable Care Act (ACA), disaster will ensue in the health care system, and this will pave the way for a single payer system.
But Maggie points out that this isn’t likely to be the case (instead, we’d just end up with continuing unchecked price increases for health care services, and correlated increases in health insurance premiums). She makes a couple of very good points: first, Medicare doesn’t cover everything (proponents of a single payer system often talk about “Medicare for everyone”). In the case of a hospital stay that lasts several months, an insured with Medicare coverage who doesn’t have a supplemental policy would be facing a very large medical bill. My father has kidney failure and was hospitalized for several months in 2004. Medicare paid 80% of the cost, but if my father had not been covered by a supplemental private policy, my parents would have been on the hook for tens of thousands of dollars for the other 20% (even with the dramatic price reduction that goes along with the Medicare negotiated reimbursement rates). Even a less catastrophic medical situation can get expensive for someone who doesn’t have a supplemental medigap policy. 20% starts to add up quickly. Although Medicare is a great safety net for older Americans, it doesn’t provide as much coverage as the typical employer-sponsored group health insurance policy. And it’s not free. Enrollees pay premiums for Medicare itself in addition to private supplemental coverage if they choose to have it. Once they tack on a supplemental policy, many enjoy health insurance coverage that is similar to what they received from their employers prior to retiring – but basic Medicare by itself is not as generous as the policies that most Americans get from their employers.
The other excellent point that Maggie made is that most Americans who have private employer sponsored health insurance like their coverage. And they definitely like the fact that the employer pays a good chunk of the premiums. If we were to switch to a single payer system, someone will have to pay for the coverage that employers are now providing, and it’s not likely that employers would continue to contribute as much to a single payer pool as they do to their own employees’ coverage now. Basically, we’d end up with a single payer health insurance policy that would require more enrollee cost-sharing than current group plans, and with fewer benefits.
Here in Colorado, 56.6% of the population had employer sponsored health insurance as of 2008, which is higher than the national average of 52.3%. I have no doubt that when the numbers come out for 2009 and 2010, there will be a drop in both of those numbers due to the recession. But most non-elderly Americans still get their health insurance through their employers. And in general, as long as people are somewhat satisfied with the status quo, most of us tend to be a bit resistant to change. Obviously, people who are currently uninsured are likely to support sweeping changes in the health care system. But most Americans do have health insurance, and those who have generous policies – that are at least partially funded by their employers – might find themselves with less coverage if we moved to a single payer plan.
Maggie’s article was included in the Health Wonk Review this week, hosted by Joe Paduda of Managed Care Matters.