Aetna CEO Says We Need to Have a Conversation About Single Payer. We've Been Having It For A Long Time.
And it always ends the same way. Here's the political and economic reasons why America won't be converting to a single-payer health care system anytime soon.
Earlier this week, Aetna, one of America's biggest insurance companies, pulled out of Obamacare's insurance exchanges. Now its CEO thinks it's time for America to start talking about moving to a single payer health care system.
"Single-payer, I think we should have that debate as a nation," Aetna CEO Mark Bertolini told a group of employees at a meeting on Thursday, according to Vox's Sarah Kliff.
Here's the thing. We've had that conversation. Several times, in fact. It's always ended the same way.
We had that conversation in 2009 and 2010 during the congressional debates on the Affordable Care Act. Progressives wanted the law to include a public option that would be run by the government and compete with private insurers, but there wasn't enough support for that to pass. Instead, the ACA allowed states to create government-run health care cooperatives that would be unmoored from the economic principles of profit-seeking and could compete with private insurers. Twenty-four states exercised the option to create co-ops, but by the end of last year only four were still running. The rest collapsed because they were too expensive and poorly managed (in part because no one with any experience running a health insurance business was allowed to run them).
We kept having that conversation after Obamacare passed. In 2011, Vermont passed a law calling for the creation a state-wide single-payer health care system. But in 2014 the state scrapped the system before it even got off the ground because it was simply too expensive. Funding it would have required an extra $2.5 billion annually, almost double the state's current budget. Paying for it would have required a 11.5 percent payroll tax increase and a 9 percent income tax increase, and Gov. Peter Schumlin, who had advocated for single-payer and signed the bill to create the system, realized that even in deep-blue Vermont that was tantamount to political suicide.
"You'd think that, if there was any state where this could fly politically, it should have been Vermont," Matthew Dickinson, a political science professor at Middlebury University, told Vox's Kliff in 2014 as part of her detailed post-mortem of the state's experiment with single-payer health care. "But in this case, the price was so big that even a state as solidly blue as Vermont wasn't able to swallow it."
Still, we kept having the conversation. Referendum-happy Colorado, in 2016, asked its voters if they would want to have a single-payer health care system—and if they would support increasing payroll taxes by 10 percent to meet the estimated $25 billion annual price tag. They soundly rejected it. Despite Bernie Sanders traveling around the state to promote the idea, 79 percent of voters in November said "no."
Sanders is still having that conversation, but now in California. Lawmakers in Sacramento are working on a bill to create a single-payer health care system for the state, but a new poll shows 66 percent of the state's residents are opposed to the idea (opposition increases to 75 percent when those polled are told the price tag for the system is $179 billion annually).
Just this week, Sen. Dianne Feinstein (D-California), hardly a conservative voice in Congress, told constituents she was opposed to a single-payer health care system. When it comes to a "total takeover" of health care by government, "I'm just not there," she said, according to the Los Angeles Times.
Is there a scenario where we end up with a national single-payer health care system within the next five years? Sure. Maybe there's a dramatic collapse of the insurance market—not impossible, given Obamacare's various ongoing troubles—and the government responds with a bailout that effectively nationalizes insurers and gives us a de facto single payer system.
Maybe the backlash against Trump is enough for Democrats to overcome the disadvantages they face—a bad Senate map and gerrymandered House districts—in the 2018 midterms and take control of Congress. Maybe they strike a deal with Trump, who has expressed favor for single-payer systems elsewhere in the world, to implement such a system. Maybe.
A more plausible scenario would see Democrats winning back control of Congress and giving Trump the boot in 2020, by which time maybe the health care market is such a total disaster that a new president can claim single-payer is the only solution and get Congress to go along. Or maybe Republicans will completely abandon their free market principles and will dive into the single-payer pool, as conservative commentator Charles Krauthammer speculated this week. In a poll conducted last month, almost half of Republicans said they supported a single payer system built around Medicare.
Still, I'm more than a little skeptical. Even with the Democratic Party moving to the left, it's unlikely that a new Democratic majority—which, by definition, would require Democrats to win elections in 2018 or 2020 in Republican-leaning districts—would coalesce around a position that's too far left for someone like Feinstein.
There are other political problems too. The AHCA has been battered in the media because it would disrupt health coverage for an estimated 24 million Americans over a decade, according to the Congressional Budget Office's assessment of an early version of the bill. Going to a single-payer model would disrupt everyone's existing health care plans. Sure, Democrats could argue that the change would be a good one, but change is scary and it's easier to scare people into opposing a new policy than reassure them that everything will be OK.
Even if Democrats solve the political issues of transitioning to single-payer, they still have to solve the economic issues. That's a little bit easier on the federal level than it is at the state level because most states are required to balance their budgets, but a national single-payer system could just be added to the federal government's tab. Still, the price tag—one analysis of Sen. Bernie Sanders' single-payer campaign promise pegged the cost at $32 trillion in the first decade, alone—is likely to make many Democrats blanche (especially those in newly-seized Republican-leaning districts who will already be looking over their shoulders at potential challengers).
All of this is fun to speculate about, but it's actually somewhat beside the point. Let's go back and look at what Bertolini, Aetna's CEO, actually said about single-payer health care:
"The government doesn't administer anything. The first thing they've ever tried to administer in social programs was the ACA, and that didn't go so well. So the industry has always been the back room for government. If the government wants to pay all the bills, and employers want to stop offering coverage, and we can be there in a public private partnership to do the work we do today with Medicare, and with Medicaid at every state level, we run the Medicaid programs for them, then let's have that conversation."
I don't think he's actually advocating for single-payer health care at all. What he seems to be saying is that he'd be open to having the government play a larger role in paying for health care, while contracting services through existing insurance companies—in other words, adding even more cronyism to a health care system that's already full of it. Libertarians and progressives alike should be suspicious of anyone advocating for having his own industry be "the back room for government."
Sadly, that's probably where we are heading. There seems to be little interest in Congress—and virtually none in the White House—for market-based health care reform, so the AHCA will further entrench government's role in health care. It seems plausible that we could end up with a Medicaid-for-all-style system like the one that Bertolini seems to be discussing, which I suppose would be nominally a single-payer system, but not really in line with what progressives mean when they use the term.
We'll continue having the discussion about single-payer health care, I'm sure. But until progressives can solve the economic and political barriers that have sunk that idea, repeatedly, in the past decade, I'm not sure it will ever be more than a conversation.