Paul Krugman on Universal Health Care

Brad DeLong quotes Paul Krugman on single-payer health care… read through both the post and the comments. Here are a couple of my favorite bits.

…The solution – national health insurance, available to everyone – is obvious. But to see the obvious we’ll have to overcome pride – the unwarranted belief that America has nothing to learn from other countries – and prejudice – the equally unwarranted belief, driven by ideology, that private insurance is more efficient than public insurance. [...]

Taiwan, which moved 10 years ago from a U.S.-style system to a Canadian-style single-payer system, offers an object lesson in the economic advantages of universal coverage. In 1995 less than 60 percent of Taiwan’s residents had health insurance; by 2001 the number was 97 percent. Yet… this huge expansion in coverage came virtually free: it led to little if any increase in overall health care spending beyond normal growth due to rising population and incomes. [...]

One way to implement national health care would simply be to expand Medicare to everyone.

Of course, doing that would require additional funds, probably in the form of an increase in the payroll tax. And that would elicit howls from the right. But the apparent rise in tax rates would be an illusion: it would simply substitute an explicit tax for the implicit tax that companies and workers pay in the form of insurance premiums. Given international experience, I have no doubt that overall spending on health care would actually fall, and that job creation would actually rise, after the supposed tax increase.

It’s a simple solution, building on a program that we already know works. It would make the vast majority of Americans better off. And it’s considered a complete non-starter politically. Now why is that?

Worldwide, I think the biggest single justice issue is the treatment of women in the third world, who are the poorest and most oppressed of the poorest and most oppressed. But within the United States, the lack of affordable medical care for poor and working-class people may be the most pressing – and also most clearly solvable – injustice we face.

(More Krugman here).

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29 Responses to Paul Krugman on Universal Health Care

  1. 1
    Robert says:

    Make it optional, and the ideological opposition disappears.

  2. 2
    Polymath says:

    i never hear economists and politicians argue this point, but it seems to me that the question about universal health care is a question about the place of rights in capitalism. if we truly consider health care a right (and i think most americans do at this point), then it is highly unethical to leave it completely to the market. whenever there’s a profit motive, the people with that motive will eventually cut corners and look for “efficiencies” (=ways to screw over a customer). rights ought to be too socially valued to allow someone else to cut corners on them.

    i have nothing against making it voluntary, but access to decent health care has to be provided by the government for anyone who isn’t profitable enough for an insurance corporation to enroll. our medicaid program doesn’t even come close to that.

    what else could we possibly mean by ‘right’ if not something protected by our government?

  3. 3
    Brad says:

    Krugman may mention this in his article, but I think it bears repeating here. The USA pays the more per capita on health care than any other country, yet we have some of the worst health outcomes of any industrialized nation when it comes to indicators like infant mortality, life expectancy, and others.

    We could save billions of dollars and thousands of lives by going to some sort of Canada-style health care system.

  4. 4
    Lu says:

    Robert, if you haven’t already, read Krugman’s column today, in which he explains why making it optional wouldn’t work. In brief, a for-profit health insurance company that can select healthier customers will do so; precisely the people who need health insurance the most will be unable to get decent coverage, and the cost will ultimately be passed on to taxpayers. In other words, health insurance as currently constituted in this country is a giant shell game.

    If you have counterarguments (please read Krugman’s actual column, he writes much better than I do), I’d love to hear them.

  5. 5
    Robert says:

    OK Lu, I’ve read the article. Perhaps I’m missing it, but I don’t see where he says making it optional couldn’t work. He explains why it wouldn’t work for a private insurer, but the federal government isn’t a private insurer. It could take the costs of everyone who enrolls, less the premiums collected from everyone, and make up the difference with tax revenue.

  6. 6
    Jay Sennett says:

    I wouldn’t get too excited about so-called universal access.

    As a transsexual, I’m not convinced that I would suddenly receive access to care. Even with healthcare, doctors can deny me care because of diagnosis of transsexualism. Even if I break my arm or develop an aneurism, I can be denied care. You know, because transsexualism eclipses all other diagnoses.

    (Btw: Canadian transsexuals are excluded from receiving certain types of treatments.)

    Is it fair? No. Does it happen? Yes.

    Does universal really mean everyone? Probably not.

    It will, most likely, mean a range of diagnoses.

    And still, I think, it is a good thing, since many, many more people will benefit from even that basic access.

    One more thing: yes, poor and working class people often don’t have access. In the U.S., however, middle class folks caught up in the temporary worker syndrome may not have access as well.

  7. 7
    Lu says:

    He doesn’t say it explicitly, but he does say:

    To understand adverse selection, imagine what would happen if there were only one health insurance company, and everyone was required to buy the same insurance policy. In that case, the insurance company could charge a price reflecting the medical costs of the average American, plus a small extra charge for administrative expenses.

    This is what happens with single-payer insurance. If you let people opt out, then the risk doesn’t get spread fairly. People who anticipate lower-than-average health costs either go without insurance or sign up with a private insurer, which can afford to charge lower, healthy-person rates (possibly without going through all that screening). The government can make up the difference between the average risk and the higher risk by raising taxes, yes, but 1) that double-taxes some people 2) what would you do with uninsured people who incurred catastrophic medical bills that they couldn’t pay for? (The true free-market answer is “bar them from the hospital, let them die in the street,” but I presume you’re not that hard-hearted.) It works for everybody only if everybody has a stake in it.

  8. 8
    Robert says:

    Uh huh.

    And thus we get to the source of the ideological opposition. I don’t like mandatory participation in a government program. The government is too big and too strong and too able to abuse its power. (“Government is Eeeeeeeevil!”)

    Optional or nonexistent, those are the choices. :)

  9. 9
    Lee says:

    Why not make the federal employee system universal? You have a smorgasbord of health insurance choices, you pay what you’re willing or able to pay for access to that choice, and the pool becomes national, which flattens out the risk curves for many ailments that are now difficult to insure. So if you want to have just basic health care access, nothing fancy, go ahead and sign on for Generic Co. basic and pay only $15/month. Or if you want to make sure you get the best wherever you go, sign on for Behemoth Gold-Plated services and pay $200/month. If you’re unemployed or otherwise on welfare, you would get basic health care access as part of your monthly subsidy.

  10. 10
    piny says:

    >>I wouldn’t get too excited about so-called universal access.

    As a transsexual, I’m not convinced that I would suddenly receive access to care. Even with healthcare, doctors can deny me care because of diagnosis of transsexualism. Even if I break my arm or develop an aneurism, I can be denied care. You know, because transsexualism eclipses all other diagnoses.

    (Btw: Canadian transsexuals are excluded from receiving certain types of treatments.)>>

    What kinds of treatments?

  11. 11
    Lu says:

    Robert, as Krugman so clearly explained, if you live in the US and have health insurance through your employer, you are participating in a government program, like it or not. It’s just not called that.

    Pure free markets are also Eeeeeevil, because they don’t necessarily count all the costs at the time of the transaction, and they let sick people die in the street. I don’t think a free-market business model is applicable to health care anyway.

    I like Lee’s suggestion, except that I would like to know what “basic” means (if it means you’re not covered if you get really sick, that’s a problem).

  12. 12
    Robert says:

    if you live in the US and have health insurance through your employer, you are participating in a government program, like it or not.

    Yeah, and I’m not required to have health insurance through my employer, either. Again, the problem is not that the government is providing the service, or that it is a “government program”. The problem is requiring participation.

    Optional is OK. Mandatory is bad.

  13. 13
    Jay Sennett says:

    piny,

    In Ontario treatments related to transsexualism itself are excluded. Surgeries and hormones must be paid for out of pocket.

    I don’t know if transsexuals with colds and such are turned away from health care clinics per se in Canada, as they are here in my city of residence. Transsexuals without insurance cannot receive treatment of any kind unless they are “managed” through a hospital gender clinic.

    I have also heard from activists in the DC area that low cost clinics will also turn away trans folks.

    What I don’t think people realize is that access to universal healthcare does not automatically mean everyone will get all the healthcare they need. Medicare used to pay for hormones and surgeries (back in the 70s). Now Medicare does not.

    Why should universal healthcare be different?

  14. 14
    piny says:

    >>I don’t know if transsexuals with colds and such are turned away from health care clinics per se in Canada, as they are here in my city of residence. Transsexuals without insurance cannot receive treatment of any kind unless they are “managed” through a hospital gender clinic.>>

    IIRC, trans-related medical treatments are covered in Canada, but subject to a lot of controls that transpeople find extremely burdensome. No worse, though, than the ones people have to deal with in nearly every city but mine. Since there are HMO models that treat transpeople very well, I see no reason to believe that single-payer holds any lesser potential. And since we’re disproportionately poor and unemployed, it seems like a boon.

    This latter factoid is interesting. All the uninsured transpeople I know go to clinics that have a large number of transpeople as clients, but I don’t know if this is mandatory or because those places are more accepting or because SF has so many transpeople.

    (I’m still working on the submission, btw–I know this is ridiculously late.)

  15. 15
    Robert says:

    Jay, I don’t think the point of universal health care is to ensure that everyone gets everything they need. That is, unfortunately, not a feasible proposition at our current level of societal wealth. (Run up a space elevator or three, and we’ll see.)

    The point is to ensure that everyone has access to a minimum level of care, that people aren’t dying from TB because they can’t afford some penicillin. Any system of rationing health care is going to end up saying “no” to certain conditions; where surgeries and hormones for transsexuals will fall on that priority list is anyone’s guess (though like you, I’d be pessimistic.)

    That said, I don’t understand why cheap/free clinics would turn away TS folk in Canada (I assume) or elsewhere for that matter. That’s an outrage. Details?

  16. 16
    piny says:

    >>The point is to ensure that everyone has access to a minimum level of care, that people aren’t dying from TB because they can’t afford some penicillin. Any system of rationing health care is going to end up saying “no” to certain conditions; where surgeries and hormones for transsexuals will fall on that priority list is anyone’s guess (though like you, I’d be pessimistic.)>>

    And yet, the NHS does cover both hormones and surgeries. Some HMOs–Kaiser, for example–will also cover hormones and hysterectomies.

  17. 17
    Emma says:

    And yet, the NHS does cover both hormones and surgeries.

    Yep, and IVF. And birth control (of any kind) is free. You don’t even have to pay the prescription charge – which is £6.40 per item.

    I heart the NHS.

  18. 18
    Jay Sennett says:

    piny and Robert,

    piny,
    SF is unusual and, unfortunately, not representative of other cities and towns. Access to care for non-insured trans folks is a huge issue in my college town here in the midwest.

    what i’m learning reading your words is that one’s experiences color one’s expectations.

    Where I live, I’m with Robert: little or no coverage for transfolks even with universal access (and the requirements for folks in Canada are odius, at least to my way of thinking.). Perhaps SF will lead the way, if we ever do achieve universal access.

    And btw, your submission isn’t late. Tomorrow is the deadline.

    Robert,

    Cheap and free clinics with which I am familiar turn away TS folks because they can. Having said that, providers within the clinic claim that transsexualism (and the taking of hormones) represents such a complex medical condition that said healthcare providers cannot possible treat TS folks with colds, herpes, asthma, etc. They then state that all healthcare must be coordinated through a doctor experienced in treating TS clients, which is akin to saying that a low-cost or freebie clinic doctor can’t treat a diabetic with the flu. Only the diabetics endrocrinologist can do it.

    And if you are a transman (female to male transsexual) needing gynecologic care, deep things happen! Like good luck getting care if you live in a small town, don’t have access to Planned Parenthood clinics, or have healthcare insurance that excludes transsexualism treatments. Robert Eads, an FtM activist in the south (Georgia?) had to go through more than twenty doctors before he finally found one who would treat his ovarian cancer.

    It happens here in my town in the Midwest too often for me to comment. I know activists in the DC area have worked to widen doctor knowledge at the freebie/low cost clinics there, for much the same reason.

    Yes, Kaiser covers hormones and hysterectomies. So do the Blues. But employers are free to exclude such treatments if they desire it. And California’s forwarding thinking treatment of TS folks does not mean it will sway a federally administered program in any way.

    I’m glad that SF exists for TS folks. Still, I’m with Robert on this one. If the U.S. ever achieved universal healthcare, I have every confidence that it will be poorly thought-out, capricious in its delivery and cheap in its motive.

    Having said all that, I still think we ought to have universal healthcare. And the U.S. being the U.S., the rich will still get better care and better access.

  19. 19
    piny says:

    >>piny,
    SF is unusual and, unfortunately, not representative of other cities and towns. Access to care for non-insured trans folks is a huge issue in my college town here in the midwest.

    what i’m learning reading your words is that one’s experiences color one’s expectations.>>

    Please don’t assume that I’ve been insulated from transphobic healthcare because I’m fortunate enough to have trans-friendly providers–and to be in a privileged position vis-a-vis care, period–right now.

    I’m not saying that single-payer healthcare would not be vulnerable to the same transphobic lacunae as the HMO system; merely that it wouldn’t necessarily be so. There are single-payer examples that take relatively good care of transpeople, and they are more accepting and more comprehensive than even the most transfriendly HMOs here. Kaiser SF is the best of the best, but it’s much worse than the Canadian system: under _no_ circumstances, no set of requirements, will it provide anything other than hormones and hysterectomies. Odious certainly isn’t acceptable, but the Canadian system isn’t denying SRS-related care to absolutely everyone.

  20. 20
    piny says:

    >>And btw, your submission isn’t late. Tomorrow is the deadline.>>

    And: exactly.

  21. 21
    Jay Sennett says:

    >

    agreed.

    and now I understand why you say you are late. do you want to send me what you have or wait?

  22. 22
    piny says:

    I have about four pages–this would be single-spaced–that I’m happy with; it’s not rough at all. I’m a little stuck on the last few points. It was going smoothly up until last night.

  23. 23
    Rachel Ann says:

    Israel has a fairly decent health care plan; you can add in benefits by paying for them. I wish that universal, normative care included eye and dental care, but it doesn’t.

    I had to have surgery the first year I was here. We paid almost nothing for the entire procedure, including the doctors visits both before and after, the hospital stay and the tests.

    I am a socialist I think in this regard. I think certain things; basic food, clothing, shelter, education and health care, ought to be free or nearly free.

  24. 24
    piny says:

    On a slightly off-topic note, I think it’s ridiculous to see dental care as low-priority.

  25. 25
    Lee says:

    Lu, basic means if you go to an in-network provider (about half of the facilities here accept Blue Cross/Blue Shield, so I was thinking about that when I was posting), you pay a co-pay of around $10-20 for most things and the rest is paid for in full if it is a covered service (e.g., purely cosmetic plastic surgery unlikely to be covered). If you go to an out-of-network provider, your co-pay is higher and you might have to pay a significant portion of covered services, depending on what the doctor is charging relative to the official negotiated rate.

    And you could choose to switch carriers on your birthday, if you wanted to (important for allowing some market forces in).

    This isn’t perfect, but I would prefer a model that is closer to free market (choose your insurer, pay what you can or choose to) than one that rations care, which a lot of the socialized medical systems do (at least, they appear to do so, to me).

  26. 26
    piny says:

    >>Lu, basic means if you go to an in-network provider (about half of the facilities here accept Blue Cross/Blue Shield, so I was thinking about that when I was posting), you pay a co-pay of around $10-20 for most things and the rest is paid for in full if it is a covered service (e.g., purely cosmetic plastic surgery unlikely to be covered). If you go to an out-of-network provider, your co-pay is higher and you might have to pay a significant portion of covered services, depending on what the doctor is charging relative to the official negotiated rate.>>

    There’s an implied comprehensiveness to this model that I’m uncomfortable with. As Jay pointed out, there are a lot of treatments–and therefore a lot of sick people–who are left out of this model entirely. The free market enables HMOs to leave out treatments that are not profitable, and to ignore people with no market clout–generally the most vulnerable and needy.

  27. 27
    Jay Sennett says:

    piny,

    I agree with you, which got cut out from my last post.

    as for the SOM, whichever you decide, to send it tomorrow or not, just shoot me an email.

    and thank you every one for this way-off topic exchange.!

    but….I agree that dental care as a low-priority is whacky and just bad healthcare.

  28. 28
    Glaivester says:

    OK Lu, I’ve read the article. Perhaps I’m missing it, but I don’t see where he says making it optional couldn’t work. He explains why it wouldn’t work for a private insurer, but the federal government isn’t a private insurer. It could take the costs of everyone who enrolls, less the premiums collected from everyone, and make up the difference with tax revenue.

    But a system where those outside the “insurance plan” still have to pay for it through their taxes isn’t really optional, so that really doesn’t refute Krugman’s assertion.

  29. 29
    nobody.really says:

    I don’t see where he says making it optional couldn’t work. He explains why it wouldn’t work for a private insurer, but the federal government isn’t a private insurer. It could take the costs of everyone who enrolls, less the premiums collected from everyone, and make up the difference with tax revenue.

    Kinda like public education: You don’t have to attend, but your taxes will pay for them whether you attend or not. That said, feel free to go elsewhere if you can afford it.

    It works for everybody only if everybody has a stake in it.

    The problem of adverse selection arises when people can opt out of PAYING, not when people can opt out of RECEIVING. So Robert’s proposal seems consistent with Krugman’s concerns.

    But Lu identifies a more complicated political dynamic: How can the public health system ensure support from the Powers That Be if the Powers That Be go get their health care elsewhere? Again, consider the example of public education.

    This problem seems intractable to me because I don’t know of any practical way to keep the Powers That Be from going elsewhere. Over time, this dynamic would likely result is a two-tiered system, with a bear-bones overworked public system struggling for resources to serve the masses, while rich people who lack any stake in the system stymy political efforts to secure additional funding.

    Yet I suspect a two-tiered system would still produce greater life expectancy and lower infant mortality than the current system.