American Manifesto, Part 2

Welcome to American Manifesto again, where I last proposed a free, universal college system. As the GOP shut down the government to defund Obamacare (and achieve a host of other objectives), I offered a non-right-wing critique of the bill and put forth a viable alternative, promising to outline some details of it:

An Outline For Medicare For All” : A Universal Single-Payer System

As I pointed out in that critique, 27 out of 30 developed countries provide universal care. The exceptions are Turkey and Mexico (the two poorest developed countries), and of course, the US. There’s many systems to draw from here, including that of Vermont, where their universal care system has vastly improved health outcomes.

A universal single-payer system would entail that:

1) All U.S. persons would have a special ID (think Social Security numbers) that would entitle them to health care.

2) People would have the option to purchase supplementary private insurance.

3) Health care expenses would be funded through general revenues.

4) To raise revenue, a small, progressive income tax would be imposed on incomes above $100,000, starting from 0.5%, to a top rate of 5% for incomes over $1 million.

5) Medical providers would be employed by the government, but you could choose to go to a private provider (whose prices would be regulated) for free care.

6) The government would be allowed to negotiate drug prices down (it’s not currently), saving an estimated $541 billion over 10 years.

How would such a system perform on the 5 indicators (information asymmetry, oligopoly, access to care, affordability, administrative costs) I’d suggested Obamacare would fail to improve?

Information Asymmetry

There would no longer be any confusion about what you’re covered for because the government would set all the core services that will be insured, like the National Health Service in England. The NHS covers primary care, in-patient care, long-term care, psychiatric care, ophthalmology, and dentistry, for free. It would be much more transparent than our current system for sure.


Instead of the current oligopoly of insurance companies, it would essentially be a government monopoly. But that won’t mean higher insurance prices. Remember that proposal #4 would establish a small tax only on high-income individuals. You’re not necessarily buying a product from the government. Everyone would have the core insurance provided by the government, and you could choose between competing private insurers for supplementary insurance.

Access to Care

Health care access in Europe hasn’t been hit by the financial crisis, while in the US, access worsens year by year, even for those who have insurance (who keep paying more, and getting less coverage). People often point to Canada to argue that single-payer causes higher wait times. But their wait times are a result of their low costs, which delay elective procedures. The Incidental Economist (a respected source on health care) asserted that “single payer does not equal wait times,” while Aetna’s chief medical officer remarked, “the U.S. healthcare system is not timely,” claims borne out by data, which shows that other single-payer systems have shorter waiting times than our system.


This is the indicator where this system unarguably would perform the best, as low-income individuals would receive pretty much free health care. The system would be funded out of general revenues and the surtax, which would yield at least $461 billion over the next decade just from the tax hike on millionaires. The burden for paying for this system would thus be shifted away from the poor and middle class.

Administrative Costs and Waste

It’s estimated that such a single-payer system would save our current healthcare system $592 billion in administrative costs and drug prices. Since the government wouldn’t be paying CEOs, advertising, or screening patients, administrative costs would be a much smaller percentage of the total cost; Medicare, a single-payer system for the elderly, spends just 1.4% of its money on such costs. The US spends twice as much on healthcare per capita than countries with universal healthcare spend, on average. If our healthcare spending was halved from about $2.7 trillion currently to $1.35 trillion, and the government absorbed all of these costs, it would only pay $250 billion more than it already does (7% of GDP, which comes out to about $1.1 trillion). The annual savings in drug prices ($54 billion) and the revenue from the millionaire’s surtax ($46 billion) would leave just $150 billion to fund out of general revenues and the rest of proposal #4.

That (0.001% of GDP) seems like a small price to pay for saving the 45,000 people that die annually due to lack of health insurance. A solid 65% of Americans want “Medicare For All;” it’s time to make it happen.



Author: Edwin Jain

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