A Fiscally Conservative Argument for Universal Health Care

With problems ranging from millions uninsured to unsustainable liabilities, there are many obstacles to resolving the health care crisis. The passage of the Patient Protection and Affordable Care Act (Obamacare) along partisan lines has been a savior for some and a nightmare for others, generally indicating that it’s less than ideal.

The United States is one of the few developed countries that doesn’t offer some sort of universal health care and yet, even discussing such a system generates partisan bickering.

The debate is not new. Serious proposals for national health insurance or an individual mandate date back to the Nixon administration with some curious twists and turns.

A far cry from a simple mandate, Obamacare has generated a great deal of controversy and doesn’t provide universal coverage; in fact, it’s clear there are winners and losers.

As an aside, I am one of many people who has seen his private coverage skyrocket in price followed by cancellation and ultimately been left with a choice of only grossly overpriced or lousy coverage.

It seems no surprise that we haven't arrived at a good solution when the debate is largely characterized by hyperbole rather than fair-minded analysis.

It seems no surprise that we haven’t arrived at a good solution when the debate is largely characterized by hyperbole rather than fair-minded analysis. The GOP won Politifact’s “Life of the Year” in 2010 with their claim that Obamacare was a total government takeover of health care (not true, although enough to make it worse for many people). President Obama punctuated that by winning the award in 2013 when he claimed “if you like your health plan you can keep it.”

There have been many problems with Obamacare including companies exiting various markets due to heavy losses or leaving altogether and providers refusing to take exchange plans. State exchanges and co-ops are facing financial problems even as questions have arisen as to whether they should be necessary when there is a federal exchange, yet Healthcare.gov has had its own share of serious issues.

For the right, the government’s sphere of influence, particularly at the federal level, should be very limited and anything beyond that is either an overstep of federal authority or a step toward socialism. There is also an inherent belief that the government is ill-equipped and not trustworthy enough to entrust with our healthcare.

Obamacare and the VA seem to confirm that suspicion although Medicare has high patient satisfaction. Some Obamacare critics believe the failures were premeditated in order to torpedo private insurance while supporters of single-payer believe the law simply didn’t go far enough.

Let’s be clear about one thing: health care is NOT a right. Anything that depends on the labor or property of others is not something we are entitled to; however, that does not undermine the reality that it is a basic human need, one step shy of air, water, and food. We should seriously consider the importance of making sure everyone has access to affordable care and how much we want treatment to be based on profit.

Consider the words of the Irish president Michael D. Higgins:

“Frankly the idea that a person would not have one job, but would have two jobs, or three jobs and work all the light hours that are there and still not be entitled to the basic protection of fundamental care is so outrageous…the idea of there being a social floor, below which people wouldn’t fall, that’s the future. I think even the poorest people in the great country that is the United States should be entitled to basic health care.”

Entitlement is not a popular word but we alone must decide what is the most workable system for the highest percentage of Americans as we “promote the general welfare.”

The Constitution delineates the duties of the federal government and anything else is the responsibility of the states, but the Founders could not have envisioned aspects of our society today that necessitate some involvement at the federal level. If we interpret the Constitution absolutely there is no place for the FAA or NASA and at the time of the Founders, medical care wasn’t even in its infancy.

While many conservatives will object to the idea of any kind of universal health care or a public option, there are also compelling pragmatic arguments to be made if common sense is prioritized over ideology.

1. Government at some level may be needed to play a part in health care and other programs where there are deficiencies in the private sector.

James Kwak, co-author of White House Burning: The Federal Debt and What it Means to Youobserves:

“…the big issue,…is whether the government can provide equivalent service at lower prices. For the vast majority of consumer goods and services, it can’t. That’s why we buy our phones and computers from private companies like Apple, not from government agencies.


The usual argument against a federal health insurance program is a blind assertion that the government can never provide services that rival the private sector. That’s what you learn in Economics 101, therefore it must be true. But real economists have known for more than half a century that health care doesn’t behave like ordinary consumer goods.”

We already know that the military and some other areas such as environmental protection would be logistically challenging if left completely to the private sector. Health care may be as well.

2. The government is already involved in health care on a widespread basis.

Medicare, Medicaid and the Veterans Administration, among others, are involved in providing medical care to a large number of U.S. citizens and the FDA is a powerful regulatory agency. Investigating the viability of covering everyone is not that big of a stretch. While the VA has had its share of problems, Medicare works fairly well for patients.

3. Universal health care is not, in and of itself, “socialized medicine.”

The only socialized medicine we currently have is the VA where the government owns the facilities and employs the providers. Universal health care could be more along the lines of public-private partnerships such as partially socialized health insurance or individual mandates.

Usually the objection to socialism includes pointing out how much better the private sector works. Even before Obamacare, what percentage of people were truly happy with their coverage?

In addition, the government is needed to provide some things the free market has no incentive to provide. There is a compelling argument to be made that basing medical care entirely on the profit motive is likely going to produce the kinds of winners and losers that are hard to justify on an ethical basis.

4. While no system is perfect, there are countries with good outcomes.

Opponents of universal health care routinely point to flaws in countries such as Canada and the United Kingdom.  However, other countries such as Israel, Taiwan, and Australia not only have lower costs of care but higher patient satisfaction.

5. Universal health care is not provided “free” and is not a handout.

Unless someone is very poor or disabled and likely receiving disability or Medicaid benefits already, the tax base can be broad. This could be via a transaction tax, meaning everyone would pay including the underground economy and those who are at an age where they might forego coverage. The insurance pool would therefore be 100%, an actuarial benefit.

6. We could end the existing problem of providing care for people who never pay.

Taxpayers currently foot the bill for unpaid emergency room visits, not to mention for Planned Parenthood and other low cost providers. It makes sense to set up a system that is more comprehensive but simpler. The non-payment of medical bills is a major driver of cost increases.

7. Countries with UHC spend less than half of what the U.S. spends on health care per capita.

We currently spend more per person and as a percentage of GDP than any other advanced nation in the world. In Australia, the program is funded by the Medicare Levy, currently set at 2% of a person’s taxable income with graduated exemptions for low earners and families. This also funds national disability insurance.

There is an additional levy of 1.0-1.5% for individuals on incomes starting at $88,001 for individuals and $176,001 for families (approximately $64-129K USD).

8. A public option does not have to eliminate private insurance or private pay.

Those of greater means can always afford things others cannot but as of 2014 over 47% of Australians also retain private health insurance even though they are entitled to free treatment in public hospitals. They receive a rebate credit toward 30% of their insurance premiums, increasing to 35% or 40% for people over 65. The Swiss system, which we’ll look at below, is based entirely on buying insurance from private companies.

9. Universal health care does not mean no personal responsibility.

It is not reasonable to expect people who work to stay healthy or those who are ill through no fault of their own to bear the brunt of paying for others who are self-abusers. The system could be structured so that people who live healthy lifestyles are properly incentivized compared to those who are morbidly obese, use tobacco or abuse alcohol or drugs. As our current system seems to have no effective way of dealing with this problem, any sort of accountability in this area would be an improvement.

10. Any program does not have to be run entirely by the federal government.

States can be involved in administration and as with Medicare and the Australian and Swiss systems, private insurance can play a major role.

Avik Roy has written extensively about the Swiss health care system. Individuals are responsible for their own insurance and since companies are allowed to compete nationwide, the Swiss shop for the best deal. The insurers are nonprofit and over 99% of Swiss citizens are covered.

Skeptical? We should be. The United States is not Australia but they spend a smaller percentage of the annual budget than we do and considering that covers everyone and our military budget dwarfs theirs, that’s pretty amazing.

Switzerland is also very different — a very small country with a population accustomed to a higher standard of living and willing to pay more for quality. Regardless, the principles are worth considering. More recently, Roy has put together his own proposal for “near universal coverage,” Transcending Obamacare.

It should be common sense to investigate options to learn what works—and what doesn’t. That would generally be a good proposition for anything we do: finding ways to not isolate our conversations to more government or less government but rather, prioritizing and better government. Further, we must address why the cost of health care is so much higher in the U.S. or it won’t matter how it’s distributed.

The point is not a blanket endorsement of universal health care no matter what the circumstances, but rather to learn what best practices we can adopt. To continue sticking our head in the sand is frankly…unhealthy.

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