How to Pay for Single Payer Health Insurance

How to Pay for Single Payer Health Insurance

PAUL JAY: Welcome to The Real News Network.
I’m Paul Jay in Baltimore. This is a continuation of our series of interviews
looking at single-payer or government-run health insurance plan and focusing particularly
on Maryland. And as I said, I’m in Baltimore, and I guess I should have said earlier in
this series of interviews that I guess we have some kind of conflict of interest here
because we live in Maryland and if there was a single payer plan system, I guess we would
benefit from it. Oh, we’re ordinary people. We would benefit from this. Oh, terrible thing,
isn’t that? Okay. So now we’re going to continue our series
of interview, and now joining us again is Gerald Friedman. Gerald is a professor of
economics at the University of Massachusetts Amherst. And we’re–if you haven’t watched
part ones and two and–I can’t remember. Are we three or four now? Anyway, you’ll see all
the other parts down below this video player. So thanks for joining us again, Gerald. GERALD FRIEDMAN: Thank you. JAY: Alright. So in the last segment, we went
through your report and we looked at the savings, which came to just over 24 percent over existing
insurance coverage and health care expenditure. But that doesn’t cover everything, does it?
And then so what isn’t paid for out of these cost savings, and how are you going to pay
for it? FRIEDMAN: Okay. Well, first of all, the cost
savings are there. There are also extra expenses, as we were saying, with the Medicaid rate
fix. Also, we would be covering everybody. Now 15 percent of the population of Maryland
is currently without health insurance. Extend health insurance to them, they’re extra expenses.
Also, the plan for the Maryland Health Security Act does away with copayments, deductibles,
and all of those expenses. We expect that people would use health services more. JAY: And let me just–I may not have made
this clear enough in the earlier segments, or I may have missed in one of the segment,
but this Maryland Health Security Act is an actual piece of legislation. It’s been proposed
in the Maryland assembly. It’s not been passed yet, and this debate is sort of going on.
Okay, go on, Gerald. FRIEDMAN: Okay. Yeah. Yeah. The study I did
projects that it would be enacted this year and looks at the savings and expenses for
next year. And as I said, covering everybody, doing away with copayments would lead to greater
utilization of health care. That’s a good thing. You know. So, you know, people would
be healthier. They would live longer. They would be more productive. They wouldn’t be
sick as much, so they wouldn’t miss as much work. Kids would be healthier in school and
would do better. JAY: And if I understand correctly, infant
mortality amongst the poor in Maryland is actually getting worse. FRIEDMAN: Yes. Yes. It’s really quite appalling.
Overall the United States is about 45th in the world in life expectancy and infant mortality.
With one of the richest countries in the world, how is it that we’ve gotten to a position
where we’ve gone from second or third in the world 35, 40 years ago to 45th? We’re obviously
doing something wrong. We’re putting tons of money inefficiently into the health care
system. So fixing that would involve spending some extra money. Now, even taking account of those extra costs,
there would be savings of billions of dollars for Maryland. But we’d also be reallocating
what we’re spending. Much of the spending now comes through premium dollars paid by
individuals or companies. We would do away with those. There would be no private insurance.
You wouldn’t be buying private insurance. Instead, that bill for that, for what used
to be paid for by the private insurance, would be picked up by the government, by this health
security trust, which would be funded through taxes. JAY: Where I–you know, I still spend a lot
of my time and grew up in Ontario. Yeah, you pay your taxes, you get a health card, you
go see the doctor. And it’s a progressive tax system, so that people that are richer
pay a little more–or, hopefully, a lot more, one wishes. FRIEDMAN: That’s right. And, in fact, what
we’ve proposed here would be we would use payroll taxes and progressive income taxes
to pay for the health insurance plan. What happens now is if you have health insurance,
you buy it yourself or you pay for it through work. A certain fixed amount gets paid for
everybody. And that is a trivial amount for the heads of large companies but is a very
large amount for people who are earning minimum wage or something close to it. So what happens
now is poor people and working people pay a very high proportion of their earnings for
health coverage. We would switch that by taking a percentage of people’s payroll and then
a percentage of your earnings. We would be taxing the rich more than the poor. It would
be a little bit progressive. But compared to the current system, it would be a huge
gain for working people and certain loss for people at the very highest income. JAY: And what would it mean for businesses?
One of the arguments that’s often given against this is that it would make, for example, Maryland
uncompetitive compared to other states that don’t have this. FRIEDMAN: I so want to go to chambers of commerce
and to businesses and talk to them about what a great savings this is for them. This is
the best thing that could happen for Maryland business that the Maryland state government
could do, because, first of all, businesses would get this off their to-do list. Small
businesses around Amherst that I talk to, they hate having to do health insurance. They
feel obligated to provide health insurance to their workers, they’ve been providing it,
they have to keep providing it, but dealing with it is a gigantic hassle. Also, it’s a
big expense. And it’s an unknown expense. Every year you find out, oh my God, my insurance
premiums are going to go like this. We would take care of that. It would be handled
every year by the state. It would be–you wouldn’t have to think about it. You wouldn’t
have to explain to your worker why this thing is or is not covered. Also, because it would
be more efficient–remember the 24 percent savings–because it would be more efficient,
Maryland would be able to provide health care to its population at lower cost than their
businesses are paying now. Businesses in Maryland would save several percentage points of payroll
every year because of this, because of the single-payer system. JAY: Yeah. If people want some evidence of
this, they should go look at–one of the biggest supporters of the Ontario health care plan
was General Motors, which found that their costs towards health care and their costs
per employee in Ontario was far lower than it was, like, for example, in Windsor, right
across the border in Detroit. And General Motors was very much in favor of this kind
of system. FRIEDMAN: That’s right, because it’s saving
them money. And I would expect that businesses in Maryland, when they realize how much they’d
be saving and how they would be able to outcompete businesses in Virginia or Pennsylvania–.
I mean, a restaurant in Maryland would be less expensive to operate than a restaurant
across the border in D.C. or in Virginia. JAY: Well, one of the arguments will be is
that there’s a lot of businesses that don’t provide health care at all, and they will
become less competitive if all of a sudden they have to start making some payments towards
this plan. FRIEDMAN: That’s right. That’s right. Small
businesses and some large businesses don’t provide health care. Now their workers are
getting free care, are getting Medicaid, are getting some sort of subsidized care, and
their workers are not getting care at all and are being unhealthy and sick. They would
benefit if their employees were healthier and had a more reliable source of care. On
the other hand, they would be paying somewhat more in the payroll tax than they’re paying
now. JAY: But in your study you looked at the overall
jobs effect. What did you find? FRIEDMAN: Oh, the overall jobs? Maryland would
benefit. It’s a little hard to say exactly, but I would estimate over 100,000 additional
jobs would be created by this because of this competitive interstate effect, that Maryland
employers would be able to outcompete employers in Pennsylvania and Virginia and elsewhere. Probably some businesses would move to Maryland.
You know, if you’re in Northern Virginia, hey, locate in Montgomery County, get the
cheaper health insurance. Your life is easier and it’s cheaper. So you’d get maybe 100,000
extra jobs. And also, though I didn’t put this in, I didn’t
factor this in, if you actually did get those 100,000 extra jobs, the tax rate could be
lower for health care. So that would–the effects would become more [crosstalk] JAY: Because the bigger the pool, the more
economy of scale. FRIEDMAN: Yes, exactly. Exactly. Costs become
lower and you get on this virtuous cycle. The biggest beneficiaries would be employers
who are currently providing health care, and the biggest group there are local governments,
because local governments not only provide health care to their workers, but they provide
health care to their dependents. What I found was the so-called pickup rate, the proportion
of people actually using the health insurance that’s offered, it’s only about 60 percent
of private employers, but it’s over 90 percent for public employers. So local governments
would be benefiting even more, which would mean lower taxes. JAY: Okay. So this whole thing’s a no-brainer.
I mean, if you look at the data, it’s really a no-brainer. And, you know, as someone who,
again, grew up in Canada, we always shook our heads and just could not understand how
Americans can live with the system they have. But what are the politics of this in Maryland
now? What do you get a sense of? Is there support for this? And what’s the role of the
insurance companies? FRIEDMAN: Well, what I hear in Maryland, what
I hear in other places as well, is politicians saying, yes, yes, you’re right, this has been
studied before. I’m not the first one to find these sorts of savings. And we’ll get there
eventually, but we need incremental steps. And right now the major focus is on working
out how to implement the Affordable Care Act, which is a little bit of a step towards universal
coverage and single-payer, but it’s a small step in that direction. What I think will happen in the next couple
of years is people are going to learn that the Affordable Care Act covers a lot of people;
it doesn’t cover everybody, so it doesn’t provide the universal coverage that we want,
and it doesn’t control costs, which is something that the people involved in writing the Affordable
Care Act admitted. You know, they have a lot of things in there that they hope will maybe
help control costs, but it’s not expected to control costs very much, with the result
that the share of income going to health insurance and health care is going to keep on rising.
We’ll still have the private insurers with a rising administrative burden, and in five
years were going to be back where we are now, except instead of 17 percent of our income
going to health care, it will be 25 percent. JAY: And one of the points you make in your
paper is that one way or the other these costs are going to have to be contained. So if you’re
not getting this out of the private insurance plan, you’re going to have to get it by not
providing as much health care. FRIEDMAN: Yes, which is the point we’re getting
to in Massachusetts, where there’s talk about ways to cut back on health care. A lot of
the talk about consumer-driven health care is basically how can we get people to stop
asking for health care. As it is, Americans go to the doctor and go to dentists less often
than people in other countries. We’re less healthy. We go to the doctor less often. I
mean, it’s like, put the two together and it starts to make sense. But it’s–we’re already underserved as a population,
and we will be in a worse position in several years, spending more, getting worse service.
And I think at that point a lot of the people who have been looking for incremental gains
will say we’ve got to go all out. JAY: Okay. And we’re going to–you’ll find
below this video player a link to Gerald’s report, and it’s worth looking at the detail
of this, because it’s about time we had this discussion based on public policy with research
and not just some rhetoric in either direction. Thanks very much for joining us, Gerald. FRIEDMAN: Thank you. Bye-bye. JAY: And thank you for joining us on The Real
News Network. And don’t forget there’s a “Donate” button over here, and if you don’t click on
that, we can’t do this.

44 thoughts on “How to Pay for Single Payer Health Insurance

  1. If we want cheaper healthcare let the doctors run it. Right now it's run by insurance companies and lawyers. Outlaw insurance, it's gambling.

  2. There's nothing wrong with gambling. It's just a poor strategy for trying to get health insurance to everybody 🙂

  3. You know what topic I would see discussed next?
    a: How to pay for single payer health insurance without coercion or force
    b: how to convince Americans to freely sign up for a single payer insurance system.

    But that will never be discussed cos its always easier to enforce your system by reaching directly to ther wallets than trying to convince people into sign up for your system.

  4. When I talk single apyer to pl here and emphasize the fact that we all DO need health care(such as Medicare for all organization) ppl look at me accusingy and say, "so you like Obamacare and socialized medicine!"Implying that I am a Communist or something. Wake the heck up, people!!Are you happy with your health care, b/c I am not!My last trip to the hospital, after being hit by a truck, I noticed a great dif in treatment. It was not a good difference.

  5. The people should create a health care system that is void of private insurance and government ran programs.

    Just build a web site to test it.

    There are way too many people making money off health care that don't have anything to do with our health issues.

  6. This guy is a statist fool. Whoever believes that government run ANYTHING will be good for the populace at large is truly delusional.

    The only answer is for the government to get COMPLETELY out of health care and insurance. I would then be able to buy coverage from say, a Canadian company, at half the cost. And all medical services would work under free market conditions, reducing costs dramatically.

  7. I cannot stand the incremental gains thing. It should be done – the evidence is there, the cost savings, expenses, etc. have all been shown. And they should play up the bigger business angle.

  8. I've had the insurance companies pull me off medical supplies that I liked and moved me back onto ones that I didn't like.

    I've had them show me products that I did like but in the end could not afford even still.

    It's the biggest con game in the fucking world.

    Give us money, and our jobs is to make sure that we find ways not to spend that money on what we're meant to do.

    The private profit businesses need to be stopped.

    Private prisons. Amoral profits for more prisoners in prison motive.

  9. Your argument is mostly ideological, whether a Scandinavian model would work with the American mentality or without first cleaning up goverment is a valid question tho.
    but Free market capitalism is an illusion, there will be no competition, only cartels and monopolies.
    Capitalism is fine, but it has no place in healtcare financing or prisons.

  10. Can't I just be allowed to say that I don't want to particiate in a government healthcare plan? Shouldn't I be able to opt out, without being taxed for it? Everyone who wants government healthcare: go for it, sign up for it, and pay for it! Please leave me out.

  11. I personally think that all single payer systems should have an opt-out (and I live in the UK where we have had single payer for decades)

    Why? Just to find out who'd be dumb enough to opt for higher cost, more bureaucracy, worse coverage, etc

  12. Well, we didn't even GET that chance. They took it off the table during the "negotiations". Please leave you out of it? Sorry, no. Everyone has to participate in a single payer system. Everyone in, no one out.

  13. Like the 99.9999% accuracy of mailing everyone's social security checks? I'd like to see that accuracy in the private sector, got any examples?

  14. it is funny how they keep referring to Canadian HC whereas in Canada it is destroying the economy and Canada is going towards private HC as 50% of all budget is now wasted on HS that doesnt even deliver basic services anymore. Also most US businesses already moved out of Canada because of high taxes (most are for universal HC).

  15. Ive never understood the argument that ""It will make us less competitive"". Even if the costs and expenses would go up (something that he demonstrates that it wont do) so what? This argument is what justifies flagging out companies and jobs to third world countries because its cheaper to produce there. ""It will make it less competitive"" is just another justification for removing any sort of social and labour right what so ever.

  16. I've been trying to work with Maryland representatives for a couple months now. I realized they have no backbone. You need to push them to do something. They are so scared of losing their reelection campaign.

  17. Your definition of "destroy" greatly differs from mine. As I see no destruction in the Canadian economy. Any move to private only increases costs, and instead of paying directly for healthcare with your taxes, by going private, you'd be giving away 20% more money (min) for the companies profit.

  18. Canada has single payer & they either go to black markets or come here when they get cancer etc.. because they would die waiting in line from there system! Do your research!

  19. Yeah some years ago Ontario overtook Michigan as the largest auto maker because GM and Ford and Toyota saved money doing business in Canada. Why? Health care savings

  20. Another important point is that this would make USA based companies more competitive globally against foreign companies based in countries with single payer systems.

  21. People should listen to the brilliant economists group "Modern Money Theory" (MMT) group as to how to pay for free healthcare for all. They will explain that there is no relationship between taxing people and government spending under our fiat money system. Govt can create enough money to pay for free healthcare for all without increasing a single penny in taxes. In fact Govt. currently create enough such money to make all the bombs needed to destroy nations, so there is no reason not to create money to take care of the healthcare of all people. It is a matter of getting the priorities right. So don't listen to the mainstream economists. It is a pity that RT allows the same propaganda carried on the MSM. Get some of the smartest economists such as Stephanie Kelton PhD and Warren Mosler to explain this.

  22. the date on this is 2012. Did this bill ever get done for Maryland? If so, I would love to know how it is doing.

  23. is there a national organization that is working to make the congress – both house and senate – be responsive to the American people and what we truly want and need instead of being the puppets of private insurance company lobbyist? Americans want a single payer that works the way this person described it and allowing any politician who says that fixing the current mess is better just because they don't want to do their job which is to fight the battle that needs to be fought in contrast to fighting the battle that can be won.

  24. I 'm in Maryland, & just yesterday a {Social-Worker/Therapist},who was convicted She (ulp & 'saw' what he was), then boasted that Fracking was EVIL !

  25. The USA spends 18% of GDP on Healthcare. The World Health Organization ranks the US Healthcare system 37th in the world. Italy, France, Canada, and all other Countries with Single Payer or Universal Healthcare score much Higher in Health Care outcomes and spend about 8%. We only have this system because of special interests like HMO'S

  26. The current "For Profit" Healthcare System we have is BANKRUPTING THIS COUNTRY. 18% of GDP for sub- par care. This system is in place only because Big Pharma and HMO'S give Billions of dollars to our elected officials. Medical expenses are the #1 cause for personal bankruptcy, Every other Modern Nation has Universal Healthcare.

  27. I think they meant to say he's not an economist they should had said he is a communist. Allowing competition to compete for your business lowers cost. Nothing in history has the government lowered and done something better than the private Market.

  28. Doug Whitmore, Non-Partisan candidate for U.S. Senate representing Nebraska supports Universal Healthcare for All as a citizens right! @NebAwakeRising (FB) The two Republican Nebraska Senators, currently in office, do not!

  29. One of the things that has dropped the US from being the greatest country in the world is something that has been called Vulture Medicine. The private insurance and medical system is such a convoluted mess that even the people in it do not really understand how it works, what the actual costs are as opposed to the crazy charges, and if you want to see death panels in action just ask your health insurance company for something outside the normal protocols. The US medical system is an international embarrassment, much like the US Congress.

  30. Some great person I know write this . The American people respect the flag and the military but it seems like our government doesn't represent or respect the people that's the problem and if the government would represent and respect the people we would all have Medicare for all but we do not. And the employers would not have to pitch in for Health Insurance for their employees because employees would be paying their own taxes for their own Medicare and they can work 40 hours a week and that benefits America. It is seems like the corporatist democrats and republicans are the two headed snake there that is dividing our democracy instead of joining it and why we only have one party to pick from with corporatist democrats and republicans and the biggest reason why America's 36 in the world. and not #1 And besides that even black soldiers died for this country too . Once upon a time a pleasant name John F. Kennedy once said it's not what your country can do for you but what can you do for your country. Some politicians cannot read the constitution it says we the people not we the corporation's and if the taxpayers' dollars are not good enough for their salary then they should be working for America because they're not there working for their own self interest and not the nation or the people. If I was president of the united states of America and the commander in chief of the military and have the military buying the lobbyists in Washington D.C. And escort them out and tell them they're worn out their welcome and if they ever come back I would throw them in prison. Because the constitution says we the people not we the corporation's and I would be the president of the people

  31. I do not see how they would pay less, taxes are going to be more. the rates ER's and Hopitals high . Tax rates would go up not down

  32. Used the UK NHS for 63 years had 6 operations multiple treatments. Maximum copay I have had $12 .Last treatment ? Cataract op . wait time? 4 days don't listen to the scare mongering.Yes you can find problems as with anything not all planes fly without crashing .But the average treatment under the NHS is good too excellent.

  33. It's too bad this was so many years ago & still nothing has apparently happened here in MD. Now we have an administration that is the definition of corporate sell-outs (including corporate democrats who are bought by the same exact companies who lobby against these changes) & will fight this as long as they have power. Freaking Chuck Shcumer just released a statement within the last few days about how he doesn't support single payer.

    I have to admit, I feel pretty demoralized about all of this lately. It feels like the most fiscally logical thing (literally in the world ) to do (not to mention humane ), & so many seem to only be paying lip service to it angling for midterms votes.

  34. Anyone who says that MMT principles lead to inflation is wrong.

Leave a Reply

Your email address will not be published. Required fields are marked *