The vision of universal access to health care that lies behind Medicare for All has wide appeal. However, as David Brooks noted in a recent column for the New York Times, the problem is less the vision than the transition. Medicare for All, in both its Senate (Sanders) and House (Jayapal) versions seems designed without a thought to the problem of transition. If we can’t get there from here, what is the use of a glittering vision of health care reform?
Fortunately, Medicare for All is not the only path to affordable access to health care for all Americans. Our team at the Niskanen Center has been working on an alternative health care reform known as universal catastrophic coverage (UCC). UCC would cover the needs of the very poor and the very sick in full, as does Medicare for All. At the same time, it would also require those who can afford to do so to pay a fair share of their routine medical expenses through income-based deductibles, coinsurance, and copays. That gives UCC a greater flexibility that would ease many of the transition problems that Brooks lists.
Sticker Shock
The sheer cost of Medicare for All is one of the biggest obstacles to its adoption. As measured by the Kaiser Family Foundation, Public support for comprehensive national health care drops from 56 percent to 37 percent when people are told that it would require higher taxes.
Backers of Medicare for All point out, correctly, that most people would get those taxes back through lower premiums and out-of-pocket costs. But taxation is a leaky bucket. Taxes distort financial decisions made by families and businesses. There are administrative costs of collecting taxes and disbursing benefits. As a result, it takes more than one dollar in tax burden to support each dollar of benefits.
Because of the leaky bucket effect, it makes no sense to impose heavy new taxes on upper-income households and then give that money right back as health care benefits. That is all the more true since the benefit in Medicare for All are more generous than in other countries. Highly regarded health care systems, such as those in Australia, Singapore, and France, require at least modest deductibles or copayments. What is more, they do not cover as wide a range of services as Medicare for All…
