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Medicare for all: Yea or nay?

By Rachel Shey
web posted October 7, 2019

Many of the Democratic candidates for 2020 have been advocating Medicare For All.  Exactly what is Medicare For All?  Is it the godsend that Democrat candidates have been celebrating, or is it the proto-socialist burden which will vastly increase government debt that Republicans have been painting it as? 

Basically, what is Medicare For All?  Medicare For All is a catchy name for what is more technically known as “single-payer healthcare.”  Healthcare is paid for by a single public authority, not a private insurer or a mix of both, while being provided by private doctors.  Hospital care is provided by publicly funded hospitals.  An example of such a system in use today is in Canada, where the Canada Health Act of 1984 established a publicly funded health care system.  This does not mean that all medical procedures are covered; prescription drugs, dentistry, optometry, mental health, home care, infertility therapy, and cosmetic surgeries are services not covered by Canadian Medicare.  Approximately 65 percent to 75 percent of Canadians actually have supplemental health insurance related to these services, and the government pays for about 70% of Canadians’ health care.  

I will now address one of the common forms of rhetoric for Medicare For All, playing a little bit of the devil’s advocate. 

From Bernie Sander’s website: “Health care [is] a human right.  We should be spending money on doctors, nurses, mental health specialists, dentists, and other professionals who provide services to people and improve their lives. We must invest in the development of new drugs and technologies that cure disease and alleviate pain—not wasting hundreds of billions of dollars a year on profiteering, huge executive compensation packages, and outrageous administrative costs.” 

Is health care a right?  Although the Declaration of Independence states that we all have the right to life, liberty, and the pursuit of happiness, these are negative rights.  Negative rights means that no one can infringe on our right to life, liberty, and the pursuit of happiness.  On the other hand, saying that we have a “right” to healthcare  implies a positive right, which means that we are entitled to health care.  This is not what the Declaration of Independence says.  While we have a negative right to health care, which means that we are free to pursue health care, we do not have a positive right to health care: we do not have the right to force other people to provide us with health care.  We are not entitled to health care. 

However, Sanders also notes that we waste “hundreds of billions of dollars a year on profiteering, huge executive compensation packages, and outrageous administrative costs.”  This may have a nugget of truth.  In the pharmaceutical industry, the general business strategy is to produce some ‘miracle drug’ and then sell it for a ridiculous price for a number of years until the patent expires and other companies begin to flood the market with cheap generics.  Even after subtracting the cost of the research, the amount of profit made on these expensive drugs is astronomical.  Martin Shkreli, the fabled “Pharma Bro,” was jailed after he jacked up the price of Daraprim, an antiparasitic whose patent had expired but for which no generic was yet available.  This illustrates how the drug market seemingly does not follow some of the laws of economics; many drugs lack a substitute good (although later on another company reduced the price of a different antiparasitic) so the price can be raised without lowering demand considerably.  Many drugs are also necessities.  People want to live, and most people prioritize their continued life over money. 

Others note that capping pharmaceutical prices could stifle the industry.  Pharmaceuticals require more R&D than any other industry.  If Medicare For All comes into effect and private insurance is eliminated, people may stop purchasing extremely expensive therapies that are not supported by the universal health care plan, such as bone marrow transplants.  This could force companies to make their drugs cheaper, and discourage them from investing in further R&D, which could mean missing a cure for cancer or other such panacea. 

On the other hand, some criticize the nature of capitalism in the private insurance market.  Insurance companies generally try to avoid people with pre-existing health problems, as these people generally cost the insurance companies more.  Thus, the very people who need insurance the most are unable to obtain it, resulting in problems such as homelessness and poor mental health care.  Universal health care would remove this element of private health insurance companies trying to make money and therefore ensure that everyone will receive some form of health care. 

Who will win if Medicare For All becomes a reality?

Medicare For All is supported by 65% of Americans and opposed by 27%.  When it is specified that Medicare For All will eliminate private health insurance, support drops to 55% and opposition rises to 34%.  Other polls indicate that 44% of Americans have been burdened with medical costs.

The people who will win if Medicare For All passes are those who are unable to obtain health insurance, and experience chronic health problems.  For instance, menial laborers who sustain back injuries as a result of their work will be able to receive cheaper care for their back injuries, which often require multiple surgeries and therapies over several years, meaning that private insurance companies are unlikely to want to pay for it. 

Who will lose if Medicare For All becomes a reality? 

Here lies the opportunity cost of Medicare For All.  Doctors, nurses, and pharmaceutical companies will suffer if Medicare For All comes into effect.  The current shortage of doctors in America will likely intensify, as the new fee schedule will be lower than the current fee schedule.  Around one million jobs will be eliminated, if private insurance is entirely removed. 

This examination makes clear that touting universal health care as a way to ensure rights for all is a political strategy intended to curry the favor of voters.  Instead, others suggest requiring employers to provide health insurance for their employees, expanding Obamacare, and using a national negotiating platform to counteract price gouging.  These could cost less than $1 trillion, compared to the possibly $40 trillion price tag on Medicare For All (spent over ten years).  ESR

This is Rachel Shey’s first contribution to Enter Stage Right. © 2019 Rachel Shey

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