Above Photo: Steve Hanks, AP
Republicans have no realistic alternative to the ACA. It’s time for single-payer.
Even before the election of Donald Trump, Obamacare was in trouble. Premiums on the government exchanges for individual policies are projected to increase an average of 11% next year, nearly four times the increase for employer-based family policies. And some large insurers are pulling out of that market altogether in parts of the country.
Those who buy insurance on the exchanges often find that even with subsidies, they can’t afford to use the insurance because of mounting deductibles (about $6,000 for individual Bronze plans). It has become clear that health insurance is not the same as health care.
In 2010 when Obamacare was enacted, about 50 million Americans (16%) were without health insurance. The U.S. was then spending $2.6 trillion a year on health care. Last year, about 29 million (9%) remained uninsured, and we spent $3.2 trillion on health care in 2015 — $600 billion more than in 2010, while insuring only an additional 7% of Americans. This comes to nearly $30,000 for each person newly insured. That doesn’t seem like much of a bargain. Costs matter. Expanding access to health care, as Obamacare does, is only half the job. The other half requires controlling costs, so the system can be sustained.
The problem is that the underlying causes of the cost inflation were left largely untouched by Obamacare. The system remains in the hands of investor-owned insurance companies, drug companies and profit-oriented providers that can charge whatever the market will bear — and in health care, the market will bear much more than in most sectors of the economy. Like all markets, this one is driven to expand, and does. Moreover, these industries are consolidating, so that they behave more like oligopolies than competitive businesses. President Obama was so eager for the political support of the health industries that he naively assumed they’d modulate their drive for profits in the public interest.
What will the Trump administration do?
While Trump calls for repealing and replacing Obamacare, he has never said what he’d replace it with. But other Republicans have offered isolated proposals: They’d permit insurance to be sold across state lines, which means that companies in states with lax regulations would be able to sell substandard plans elsewhere; they’d abolish the mandate that requires people to buy insurance, but keep the provision that requires insurers to cover people with pre-existing conditions (an idea that would cause premiums to skyrocket); and they’d promote health savings accounts, which are essentially tax-free savings plans that favor the wealthy.
What is absolutely certain, given the Republican rhetoric and Trump’s nomination of Rep. Tom Price for secretary of Health and Human Services, is that we will move very sharply toward an even more expensive, inadequate and unequal health system.
Sen. Bernie Sanders had it right. The best way to provide universal health care at a sustainable cost is to extend Medicare to everyone, while implementing some needed reforms. Medicare is essentially a single-payer system for those older than 65 — government-financed but privately delivered. Because it uses the same profit-oriented providers as the rest of the system, it would need some reforms. That would include shifting hospitals and other providers to a non-profit delivery system, admittedly a huge challenge that could prove as controversial as Obamacare itself. We could ease the transition by switching to universal Medicare one decade at a time, starting by dropping the eligibility age from 65 to 55.
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Paying for Medicare for All would require an increase in taxes — perhaps an earmarked progressive income tax for the purpose — but that increase would be offset by the elimination of premiums and out-of-pocket costs, and the slowing of inflation that stems from our market-based system. As it now stands, 65% of health costs are already paid for by the federal government in one way or another. Health policy experts estimate this would increase to 80% with Medicare for All. Since employers would no longer have the expense of providing health insurance, they would be more competitive in global markets and would likely hire more workers.
We are now between a rock and a hard place. Obamacare is faltering, and the incoming Trump administration has no realistic alternative. Paradoxically, this might be exactly the right time to push for a national health program.
Yes, repeal Obamacare, but not without replacing it, and the best replacement is Medicare for All. Some polls suggest most Americans favor such a system. We should pick up our metaphorical pitchforks and torches and make that preference known.
Marcia Angell is a corresponding member of the Faculty of Global Health and Social Medicine at Harvard Medical School and Faculty Associate in the Center for Bioethics. She stepped down as editor in chief of the New England Journal of Medicine in 2000.