Month: August 2015

Vouchers Are Not a Plan

Opponents of a single payer health care system in the United States like to say it would cost too much, even throwing in the inappropriate complaint that the CBO has not scored any plan.  Of course that won’t happen until congress puts bills such as H.R. 676 through the committee system. As an alternative a voucher plan is often offered up. The only thing that the voucher system offers is a cost-shifting lid on government spending. No control over total health care costs. No access to medical care for those who cannot afford the ever-increasing costs not covered by the vouchers. No system. An improved, expanded Medicare would require hard, thoughtful work and discipline, but it can succeed. We can pick and choose figures to argue over but  there is no ethical and rational alternative.

The financing of Medicare for All is a well explored issue. As far back as 1991 the GAO reported that, “If the universal coverage and single-payer features of the Canadian system were applied in the United States, the savings in administrative costs alone would be more than enough to finance insurance coverage for the millions of Americans who are currently uninsured. There would be enough left over to permit a reduction, or possibly even the elimination, of copayments and deductibles, if that were deemed appropriate.”   Later the same year the CBO reported, “If the nation adopted…[a] single-payer system that paid providers at Medicare’s rates, the population that is currently uninsured could be covered without dramatically increasing national spending on health. In fact, all US residents might be covered by health insurance for roughly the current level of spending or even somewhat less, because of savings in administrative costs and lower payment rates for services used by the privately insured. The prospects for controlling health care expenditure in future years would also be improved.” (“Universal Health Insurance Coverage Using Medicare’s Payment Rates”) .  Fourteen years later the lack of true (not just for the government) cost controls make improved Medicare for All an even more imperative goal.

For a good, up-to-date discussion (2013 figures) of H.R. 676 see the article by Gerald Friedman, professor of economics at the University of Massachusetts, Amherst. Friedman extrapolates on (1) the savings on provider administrative overhead and  pharmaceutical costs, (2) the regressive and obsolete funding sources to be replaced by progressive taxation (in billions of dollars), (3) the savings on administrative costs of insurers, Medicaid, and employers (in billions of dollars) and (4) the savings on federal tax expenditures.

As Professor Friedman states, “On top of the enormous administrative savings of single payer, the savings from effective cost-control would make it possible to provide universal coverage and comprehensive benefits to future generations at a sustainable cost.”


…and study Friedman’s charts

Funding with progressive taxationFunding with Tobin Tax