One Nation, Uninsured

[Guest guest]

http://www.nytimes.com/2005/06/13/opinion/13krugman.html?hp

 

One Nation, Uninsured

 

By PAUL KRUGMAN

Published: June 13, 2005

 

Harry Truman tried to create a national health insurance system. Public

opinion was initially on his side: Jill Quadagno's book " One Nation,

Uninsured " tells us that in 1945, 75 percent of Americans favored

national health insurance. If Truman had succeeded, universal coverage

for everyone, not just the elderly, would today be an accepted part of

the social contract.

 

But Truman failed. Special interests, especially the American Medical

Association and Southern politicians who feared that national insurance

would lead to racially integrated hospitals, triumphed.

 

Sixty years later, the patchwork system that evolved in the absence of

national health insurance is unraveling. The cost of health care is

exploding, the number of uninsured is growing, and corporations that

still provide employee coverage are groaning under the strain.

 

So the time will soon be ripe for another try at universal coverage.

Public opinion is already favorable: a 2003 Pew poll found that 72

percent of Americans favored government-guaranteed health insurance

for all.

 

But special interests will, once again, stand in the way. And the big

debate among would-be reformers is how to deal with those interests,

especially the insurance companies. These companies played a secondary

role in Truman's failure but have since become a seemingly invincible

lobby.

 

Let's ignore those who believe that private medical accounts - basically

tax shelters for the healthy and wealthy - can solve our health care

problems through the magic of the marketplace. The intellectually

serious debate is between those who believe that the government should

simply provide basic health insurance for everyone and those proposing a

more complex, indirect approach that preserves a central role for

private health insurance companies.

 

A system in which the government provides universal health insurance is

often referred to as " single payer, " but I like Ted Kennedy's slogan

" Medicare for all. " It reminds voters that America already has a highly

successful, popular single-payer program, albeit only for the elderly.

It shows that we're talking about government insurance, not

government-provided health care. And it makes it clear that like

Medicare (but unlike Canada's system), a U.S. national health insurance

system would allow individuals with the means and inclination to buy

their own medical care.

 

The great advantage of universal, government-provided health insurance

is lower costs. Canada's government-run insurance system has much less

bureaucracy and much lower administrative costs than our largely private

system. Medicare has much lower administrative costs than private

insurance. The reason is that single-payer systems don't devote large

resources to screening out high-risk clients or charging them higher

fees. The savings from a single-payer system would probably exceed $200

billion a year, far more than the cost of covering all of those now

uninsured.

 

Nonetheless, most reform proposals out there - even proposals from

liberal groups like the Century Foundation and the Center for American

Progress - reject a simple single-payer approach. Instead, they call for

some combination of mandates and subsidies to help everyone buy

insurance from private insurers.

 

Some people, not all of them right-wingers, fear that a single-payer

system would hurt innovation. But the main reason these proposals give

private insurers a big role is the belief that the insurers must be

appeased.

 

That belief is rooted in recent history. Bill Clinton's health care plan

failed in large part because of a dishonest but devastating lobbying and

advertising campaign financed by the health insurance industry -

remember Harry and Louise? And the lesson many people took from that

defeat is that any future health care proposal must buy off the

insurance lobby.

 

But I think that's the wrong lesson. The Clinton plan actually preserved

a big role for private insurers; the industry attacked it all the same.

And the plan's complexity, which was largely a result of attempts to

placate interest groups, made it hard to sell to the public. So I would

argue that good economics is also good politics: reformers will do best

with a straightforward single-payer plan, which offers maximum savings

and, unlike the Clinton plan, can easily be explained.

 

We need to do this one right. If reform fails again, we'll be on the way

to a radically unequal society, in which all but the most affluent

Americans face the constant risk of financial ruin and even premature

death because they can't pay their medical bills.

 

E-mail: krugman

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