The Pros And Cons Of Universal Health Care In The United States

by Philip TW

 

This is a follow up to my series last year, Universal Healthcare Week.  My posts on the pros and cons of a universal health care system continue to be popular pages on Weakonomics, so I thought I’d touch on the subject again.  For a quick refresh, universal health care is a system of providing health coverage for any and all willing participants.  This is usually through a government program funded by taxes.  The United States is the only developed country in the world to not have a universal health care system for its citizens. Medicaid and Medicare do not count because they target a select group of citizens.  Many people support universal health care, claiming it is a birthright and everyone should have access to care.

It is important to note the distinction between universal health care and socialized medicine before we proceed.  Many people confuse the terms.  Under universal health care, hospitals, doctors, drug companies, nurses, dentists, etc. can all remain independent.  They can be for-profit or non-profit.  In socialized medicine, the whole industry is the government.  So if you wanted to be a doctor, you would work for the government.

So let’s dig into the pros and cons of universal health care, starting with the pros:

Pros of Universal Health Care

If you lost your job next week, your insurance would likely go with it.  Excluding temporary programs like COBRA, losing your job basically means losing your health insurance, too.  Sure, you can buy your own, but that can get expensive and there are often holes in the policy compared to employer-provided health insurance.  Under a universal system, you don’t have to worry.  Imagine you had to pay each month for access to use the police.  If you lost your job and couldn’t afford the police bill and called 911, you wouldn’t get service.  That sure sounds awful.  The most fundamental underlying basis of universal health care is the fact that in the system, you don’t have to worry about not being covered.

The United States spends more on health care as a percentage of GDP than any other developed nation.  Countries that have some kind of universal coverage generally spend less.  This is because the costs of a universal system are less than a private system.  Drugs can be purchased in greater bulk, prices for services can be negotiated at a lower rate due to the larger pool and a large singular system reduces the overhead involved in processing insurance and medical services.

Furthermore, we already have laws in the U.S. that require emergency rooms to see patients even if they don’t have any insurance. This costs the hospital money, which they pass on to consumers and insurance companies.  Under a universal health care system, those who normally go without insurance would now be required to pay into it in the form of taxes.  The distributed cost would bring down the personal expenses of those who already pay for insurance.  Those who might object to forced taxation should know this is no different than the shared costs of road construction, school funding or space exploration.

That all sounds pretty good, right?  You can take your insurance from job to job or even be covered if you lose your job. The total cost for health coverage would decline, and the actual out-of-pocket expenses you pay would also go down.  But not so fast.  We’re only looking at this from from the other side of the fence.  Let’s walk on over and find out exactly what life is like with universal health care. To Europe!

Cons of Universal Health Care

Competition rocks.  Competition fosters innovation.  There is a reason pharmaceuticals and biotechnology are two of the fastest growing industries in the United States.  There is some serious money to be made with a breakthrough product.  Universal health care funded by the government would really hold back the potential for new medical breakthroughs because the government would insist on sharing the breakthrough, to the detriment of the company’s profits.  This would end up with these companies leaving the industry. No profit to be made, no reason to invest.  Competition in the medical community has done much to help support the American economy over the past couple of decades.  So much so that our GDP growth outpaces other developed countries with universal health care systems.

Take a closer look at the universal health care programs in other countries, and you’ll find not everything is so great.  In Canada, wait times to see specialists have sent many people with the funds to private care.  I’m pulling statistics here, but it takes 22 months for residents of Saskatchewan to get an MRI.  Fifty-seven percent of Canadians report having to wait a month just to see a specialist.  As a result, long wait times and certain services not covered in the national plan mean citizens in universal health care provided countries must still obtain private insurance.  That negates the whole purpose of a universal system, because many people would opt out of getting private insurance, creating the same problem the U.S. currently faces.

Perhaps the most important disadvantage of universal health care is the fact that the government would be in charge. Medicare/Medicaid and Social Security are run by the government. Both of these programs are on track to bankrupt themselves. Bloated bureaucracies are sort of an American icon.  We set up massive social welfare programs, and they are abused by citizens and politicians alike.  If a U.S. universal health care plan were to generate a surplus, our idiot government would then borrow from it and ruin the whole system for everyone.  The simple fact is that our government can’t be trusted to handle social programs.

 

These aren’t all the pros and cons of universal health care, but it’s enough to get you started.  Here are a couple of interesting facts and thoughts of note about universal healthcare:

• Almost fifty-nine percent of the U.S. health care system is already publicly financed through taxes and subsidies.
• It’s unfair for a parent to choose not to cover a child.  The child should have coverage.
• A commonly cited statistic showsthat  the quality of health in the United States lags behind countries with universal health care. However, the study used biased criteria and results are manipulated to make it look worse than it actually is.
• The most recent opinion polls of doctors in the U.S. show that the majority support a universal system.
• The American Medical Association (the largest of its kind) more broadly supports reform of the current system.

What could universal healthcare in the United States look like?

There are a number of methods to implement universal health care.  You can collect taxes from everyone, including businesses (this is how we support Medicare).  This would provide blanket coverage to anyone and everyone, and you would only need to prove you’re a citizen to get care.  Another method would be for the government to offer a national policy.  If you wish to participate, you can opt-in, and then your premium would be deducted from your paycheck just like a normal tax.

In the United States, we would probably tax everyone.  It is conceivable that we would be taxed as a percentage of income, instead of a flat rate.  This could negatively impact higher income earners because they would pay more into the system than they would get out of it. In order for a universal system to work, this would likely be the implemented method.  Perhaps it could be a fixed percentage up to a certain income level, at which it either curbs or cuts off.  A system like this would best benefit lower-income families and families with more children than average.  The result would be that these demographics would get more out of the system than they pay in, with folks without children and higher income earners getting the short end of the stick.  They would, however, get a stick.

We could also use a system where everyone pays in and gets at least something out of it.  It could be the most basic coverage, perhaps with all children up to 18 covered and all adults getting just simple coverage.  This could perhaps cover basic dental and eye care, as well as a yearly checkup covering all the normal tests someone would get at their particular age.  Adults could purchase additional coverage through the government and it would be deducted from their paycheck, or they could use a private insurer to supplement the basic care.

The possibilities are endless. Just about anyone could come up with a plan; it’s just a matter of which one would be the most useful and provide the greatest coverage per dollar.

Finally, what does The Weakonomist think about universal health care?

The universal health care argument almost always excludes one key point: portability.  Many folks talk about universal care as either “you’re in” or “you’re out.”  Half of the people in the United States (as conducted by a poll of the most reliable sources, four people in my office) just want to be able to take their insurance with them from job to job.  Let’s say I left my employer to go work for a small bank in town.  That small bank requires 90 days of service before benefits kick in.  This means that I go three months without having insurance!

Like my car insurance or my Roth IRA, I’d like to simply take my health insurance with me wherever I go.  I will pay the full price, and a company (as a part of my benefits package) could offer to pay for some or all of my coverage.  When I leave the company, they stop paying.  I have to pay it all on my own again, or until I find another company that would help me pay for it.  Companies could be compelled to help by making this contribution a tax deduction.

At this point, I still don’t believe a universal system is the best way to go.  I really want to just take it with me wherever I go and get some big-time reform and modernization to the medical system. Gun to my head with only two options, though, I’ll take universal health care over what we’ve got right now.

At least one percent of the people reading this will care what I think, but for the most part, my opinion doesn’t matter.  Educate yourself; form your own opinion.  I know I’ve got some readers with more information out there; please share it.  This is not a forum for debate, but merely a quest for statistics and facts.