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Spoiler alert: We already are a single-payer country

Apr 6, 2017

by John Yarmuth

This op-ed originally appeared in the April 6, 2017 edition of The Hill

Two weeks ago, congressional Republicans proved they have been on a wild goose chase. Make that a unicorn hunt. Whatever you want to call it, the situation is this: They will not and cannot come up with a replacement for ObamaCare that does what they claim it will do.

Suffering the humiliating defeat of their Affordable Care Act “repeal and replace” plan, Republicans discovered what President Trump did, namely that healthcare is really complicated. Who knew? Only everyone who ever worked in healthcare policy.

But congressional Republicans suffer from a more troubling disability: They don’t understand healthcare. Rather, they understand healthcare ideology, but ideology never cured a cancer or healed a broken leg, and it never paid a hospital bill.
Unfortunately, Republicans still believe they can fit a round ideological peg into a trapezoidal hole. They passionately believe that a deregulated, privately funded and operated healthcare system can work in contemporary American society. They think government undermines healthcare, when the rest of the industrialized world — with lower health spending and better outcomes — serves as rebuttal to that notion.

To a certain extent, Democrats are tempted by that notion. When we wrote the ACA in 2009 and 2010, we built on the existing hybrid system, retaining private, employer-based coverage for most Americans, and establishing a marketplace for individual coverage, alongside government-paid insurance for lower-income citizens.

We thought conservatives might support our effort to build a functioning private individual insurance market. We knew it would not be perfect, because insurance companies cannot participate in a system wherein they cover all the sick people, on whom they lose money, and don’t have enough healthy people who are profitable for them. That is why we provided subsidies to make health insurance affordable and created buffers, including the individual mandate and risk-management tools to spread costs, to protect the companies from “adverse selection.” However, Republicans sabotaged the buffers, the mandate has not worked as well as we would like, and some local marketplaces — mostly in rural areas — have only one insurer offering plans. .

The lesson learned here is that the individual health insurance market, just like every other segment of the health insurance system, cannot work properly without government support. Currently we consume an average of just under $10,000 worth of healthcare per citizen annually. If that cost were borne solely by individuals and employers, without taxpayer subsidies, only the richest corporations and citizens could afford it.

Congressional Republicans effectively conceded this in their failed legislation, at least superficially. Rather than simply repealing the ACA, they provided inadequate tax credits to help individuals pay their premiums and a huge tax-financed slush fund to provide catastrophic coverage for the sickest Americans. The problem was, their legislation was driven by ideological hatred of the ACA rather than a thoughtful attempt to make the individual insurance market work better, so they ended up creating problems instead of solving them.

So here is where I offer advice for my Republican friends: get a grip on what we’re really dealing with in our healthcare system. The secret no one, especially Republican legislators, is willing to accept, is that we already have a government-centric single-payer healthcare system for all but a slim sliver of our citizens. The problem is that it is poorly constructed and organized. And a privately financed, free-market system is impossible — a unicorn.

The only Americans who have health insurance that is not taxpayer-supported are those who do not have group coverage and earn too much to receive a subsidy under the ACA. That group totals about 10 million people. Everyone else relies on government help to make insurance affordable, either directly through Medicare, Medicaid, Tricare or the VA, or indirectly through tax-free employer-provided benefits, which are also deductible from their employers’ taxes. One way or another, virtually every American’s healthcare coverage is financed by the government.

Congressional Republicans are confronting this reality, even though they don’t realize it and would never admit we already have a single-payer system.

Last week, Speaker Paul Ryan (R-Wis.) defiantly said that his party has not given up its search for the healthcare unicorn. He should look around the world and ask himself why no one else tries to do it the way he dreams of, and then he should work with us Democrats on a better way to organize our existing single-payer system.