Single-payer plans

It’s time for Democrats’ wonk class to write some single-payer plans

Activists need help from real experts, not condescension.

Updated by Matthew Yglesias

Most of the people I know who work on health policy on a practical level don’t think the idea of a big political push to enact a Medicare-for-all plan makes a lot of sense. But the push is already underway, whether the wonks like it or not. Medicare-for-all bills have come close to passing in both New York and California, Bernie Sanders’s national political organization is firmly behind the idea, and giving some form of verbal endorsement to the notion is becoming a litmus test of character for huge swaths of grassroots activists.

But the plans that are out there tend to suffer from grave design flaws that make it extraordinarily unlikely they’ll ever be enacted.

The authors and sponsors of the existing single-payer bills ought to try harder to address their flaws, but it’s also legitimately difficult for them to do the work without the support of the kinds of institutions that would normally craft proposals. Yet at the same time, technocrats fundamentally can’t steer the course of a political movement. Some group of well-informed progressive health care wonks who work at one of Washington’s several well-known Democratic Party–aligned think tanks ought to sit down and write out the details of a single-payer health care plan that they think make sense.

Their reluctance to do this work as of two or three years ago — when single-payer health care was considered laughably implausible — was entirely understandable, but in the wake of the 2016 election outcome and the apparent failure of the Republican Party’s drive to repeal the Affordable Care Act, it’s become counterproductive and dysfunctional.

If progressive activists want to make a push for single-payer health care, then a push is going to be made. If competent technocrats don’t help, then the push will end up being for something unworkable and will likely end in tears. It’s time for Democratic health wonks to stop refighting old wars and start working on the health care system of the future.

The dance of political feasibility
The basic paradox of the intra-Democrat war on health care policy is that very few people are willing to say clearly that the single-payer proponents are wrong.

Instead, Barack Obama’s 2009 observation that "if I were starting a system from scratch, then I think that the idea of moving toward a single-payer system could very well make sense" is a much more common thought.

In a 2014 press conference, Nancy Pelosi — who really did spend all of 2009 and much of 2010 fighting for the inclusion of a public option in the Affordable Care Act — said that on some level she “wanted single-payer,” but that she’s very proud of the ACA as passed, imperfect though it may be.

Kathleen Sebelius, former governor of Kansas and secretary of health and human services in Obama’s first term, probably put the mainstream Democratic thesis most clearly in a July podcast produced by the Center for American Progress.

She said that if you were to “wipe the slate clean and come up with a different American system for health care, you would never put together health care based on people's employment.” The current system, “where if you turn 65 you have insurance, if you're below a certain poverty level or in a certain category you have insurance, if you work for the right company you have insurance, but otherwise you're out on your own,” she said, fundamentally does not make sense. But she thinks it would be unnecessarily disruptive to try to overhaul tens of millions of people’s existing health insurance, and the priority, instead, should be to focus on the fact that “we need to get everyone in” and keep expanding coverage until we achieve true universality.

These are completely reasonable kinds of concerns to have. But on other issues, considerations of political feasibility aren’t considered a halting point for policy discussion. The CAP plan for universal access to affordable, high-qualify pre-K was not feasible for the foreseeable future when it was published in 2015. Nor was the Economic Policy Institute’s 11-point plan to build a high-wage economy when they published it last December. Len Burman of the Urban Institute recently sketched out a plan to create a massive new system of wage subsidies financed by a 15 percent consumption tax. That’s obviously not politically feasible either. But wonks try to develop these ideas anyway, in part because publishing and discussing them can itself shape the landscape of feasibility and in part simply because it’s good to have ideas on the shelf if conditions change.

Right now there’s a risk that if future events do dump a cartload of political power in progressives’ lap, it’ll largely go wasted due to a paucity of workable plans. Just look at the single-payer debate in California.

California’s single-payer push is a cautionary tale
The Golden State has long been a Democratic Party stronghold, but the Trump-induced shake-up of the electoral landscape has left it bluer than ever before.

California is also big — with a population significantly larger than that of all five Nordic countries combined — and it’s richer than the average American state. Consequently, it’s a very reasonable place to try to field test ambitious progressive ideas that might later go national, and it naturally became the target for a single-payer organizing effort led by the National Nurses Union — one of the few interest groups that backed Bernie Sanders in the 2016 primary.

But while the idea of a single-payer health care system for California makes sense, the specific legislation that the California Medicare-for-all movement got behind was strange in a number of ways.

For starters, the basic challenge for any plan to move people off private health insurance and onto a Medicare-like system is you’re going to need a big tax increase to pay for it. The California legislative framework would have substantially exacerbated that difficulty by proposing a program that’s actually much more expensive than Medicare, because unlike Medicare there would be “no co-pays or deductibles,” but the expansive coverage package would offer everything from vision services to nursing home care — all with no premiums. Also unlike Medicare (but like Canadian health care), California’s Medicare-for-all bill would essentially ban private health insurance.

Then, having set up the need for a very large tax increase to pay for a very generous program, the California bill didn’t specify what kind of taxes should be raised. There’s no doubt that the state could, economically speaking, afford higher taxes and a more expansive welfare state (households and companies would, after all, save money by not needing to pay for health care), but the design of the taxes is a big, important question that the bill just punted on.

Last but by no means least, as the Intercept’s David Dayen has explained in some detail, the whole thing was unworkable. The California Constitution requires that half of the state’s budget go to fund K-12 schools and community college. Shifting a huge amount of health care spending from the private sector onto the state budget would thus require a gigantic boost in education spending, which would require its own tax hikes. This, like the design of the taxes needed to finance the health care system, is a solvable problem (you’d need a ballot initiative to amend the constitution), but to achieve the goal, someone would have to actually solve it.

The upshot of this was that organizing work, rather than leading to progress toward a single-payer system, led to a game of political hot potato. Most California Democrats didn’t want to tell activists “no” even though the shell bill was unworkable, so it was eventually killed by the speaker of the state assembly, who now has to play the role of bad guy. Meanwhile, a broadly similar process is playing out on Capitol Hill, where a John Conyers single-payer bill is gaining momentum even though many of its co-sponsors don’t actually think it’s a good idea.

Democrats are signing on to a bill they don’t support
Among House Democrats, the big way to signal true progressive commitment in the year 2017 has been to sign on as a co-sponsor of John Conyers’s HR 646 — the Expanded & Improved Medicare for All Act.

This is a bill that Conyers has had kicking around for years, always intended as more of an aspirational statement than a real piece of legislation. But it’s gained new momentum in the wake of Bernie Sanders’s primary campaign, and now fully 60 percent of the House Democratic caucus has signed on as co-sponsors. Sanders himself is expected to introduce a broadly similar bill next month, and the odds are that House challengers seeking the support of the grassroots left will face pressure to endorse it too.

Yet like the California bill, the Conyers plan is very expensive and dramatic — it would eliminate Medicare’s existing cost-sharing provisions, extend the program to everyone immediately, and cancel basically all private insurance — without really specifying how it’s too be paid for.

Members of Congress who’ve signed on as co-sponsors for this bill, it turns out, don’t actually expect that to happen or think it would be a good idea.

“The goal is to move forward with ways to strengthen it and get more people covered and look at a public option and extend Medicare to more people” says Rep. Jared Polis of Colorado, by way of explaining that he doesn’t actually envision the Conyers bill he’s co-sponsored becoming law. “That's where this bill goes and it's part of a discussion.”

Arizona Rep. Ruben Gallego thinks the legislation he’s co-sponsored is an excessively disruptive way to achieve its goal. Single-payer, he says, “is something you phase in. I have different ideas for how to do it, though it’s not in the Conyers bill — you could start with Medicare phase-in, dropping the enrollment age to 55 and then covering everyone up to 18 just for the first couple years.” Over time, “you keep moving inward and inward until you get to a happy medium.”

Vermont Rep. Pete Welch says the Conyers bill “is more of an aspiration,” and says that since Medicare “works and it’s more popular” than private insurance, it makes sense to move everybody onto it as a goal.” But “the challenge is the transition.”

Indeed, that’s a big problem. And it’s one that health and tax policy wonks ought to be working on in partnership with politicians who support the goal. Instead, politicians who support the goal are plowing ahead with legislation that even they don’t really support — setting up unnecessary intraparty fights and not really laying the groundwork for policy success.

The transition problems aren’t just politics
The difficulties of transitioning a couple hundred million people off their current health insurance and onto a new federally run system, it’s worth saying, aren’t just problems of political feasibility.

The tax issue, for example, is a critical substantive lacuna in the major health care bills. There’s no serious doubt that America could afford a heavier tax burden to finance a publicly provided health care system. But the design of that tax burden still makes a big difference. If you finance the system mostly with a value-added tax like many European countries do, for example, then senior citizens who already get Medicare will end up paying higher taxes in exchange for a program that doesn’t help them. But if you finance the system mostly with higher payroll taxes (how Social Security and Medicare work), you are creating a pretty strong new disincentive to work, since everyone would get the benefit whether or not they pay for it.

These aren’t insuperable obstacles any more than the California Constitution is. But the policy work would have to be done, followed by the difficult job of selling the plan to politicians and stakeholders.

There are also some real questions about the transition.

Right now I, like most Americans, get my health insurance mainly through my job. If that insurance were to be replaced by a new tax-financed system, the result would be a financial windfall for my employer. In a standard economic model, the long-term consequence of that windfall is higher cash wages for employees, which offset the new taxes. But there’s no economic model at all that suggests the higher wage bill will be paid out evenly to each current employee. If Vox Media’s health care costs fell drastically, I might be able to bargain for a raise for myself. But someone else with more bargaining power might get it instead. Or the money could be spent on increasing the pace of hiring.

There are particular questions here about the fate of union workers whose pay and benefits are set by multi-year collective bargaining agreements and public sector workers whose pay is set by law. The jobs and livelihoods of people who currently work for insurance companies or in medical billing are also not an entirely trivial concern. And the interaction of the new health care system with existing programs like the Veterans Administration also needs to be thought through. All of this is potentially doable, but very little of it has actually been done.

Send in the wonks
Sanders’s 2016 campaign started as, essentially, a protest movement that didn't particularly seek expert policy advice in crafting its proposals and certainly didn’t receive it, given fear of retaliation by presumed victor Hillary Clinton against anyone who worked for her opponent.

The result was, among other things, a health care plan that was fairly sketchy and technically unsound and was criticized as such by people like me. That, in turn, prompted counterattacks on the entire concept of sweating the details of policy, and the ensuing standoff has largely defined left-of-center politics ever since. Paul Krugman writes that the political logic that counseled against a single-payer approach in 2009 still applies, while Jacobin articles explain that even failed state-level campaigns help build organizing capacity for socialism.

To the extent that people want to endlessly refight the 2016 primary, this is all fair enough, and there’s plenty of grist for the mill.

But there is something perverse about politicians signing on as co-sponsors of legislation whose provisions they don’t actually support. And there’s something doubly perverse about policy experts refusing to engage with an idea that actual elected officials want to embrace on the grounds of political inexpediency. The politics, at the end of the day, is the politicians’ job.

What they need are some concrete policy options that would let them begin to seriously weigh the pros and cons of different possible approaches. How much revenue would be needed, and what taxes could raise it? Can disruption be usefully minimized by phasing in the new program over time? Can both disruption and tax increases be minimized by structuring payments as “premiums” or something that employers “buy in” to? What happens to private insurers’ participation in selling of Medicare Advantage and Medigap insurance plans? How can we help ensure that the money employers save actually does pass through to workers as wages?

These are the kinds of details that voters don’t really care about right up until something is about to become law. But if you want to pass a law, you need to address them. And as the ultimate collapse of Republicans’ ACA repeal efforts shows, it’s not good enough to simply assume that good solutions will emerge in the future. Nothing at all is politically feasible from a progressive point of view right now. But in truth, nobody knows what 2019 or 2021 will hold or what avenues for action may open up in state government. Right now, though, the left wing of the Democratic Party has a big idea on health care but no plan. It’s time for the wonks to step up.