A Single-Payer Health Insurance System

The number of Americans without health insurance has now risen to 47 million and because of the rising cost of such insurance, the number of uninsured will probably top 50 million in less than two years. This includes millions of children. I’m sure that this does not bother George Bush and his gang of die-hard right wingers, but it does bother the rest of us.

In recent polls by ABCNEWS/Washington Post and CBS News/The New York Times, Americans by a 2-1 margin preferred a universal health insurance program over the current employer-based system. These results are in line with previous polls over the past decade which have shown large majorities of Americans favoring government-provided health insurance. So why don’t we have it? We don’t have it because health insurance companies with enormous power and money have blocked it by corrupting, strong-arming, and strangling the Republican Party and President Bush.

How would governmental health insurance work? Under a single-payer system the government would provide health insurance for all citizens in America. People ask: “How would we pay for a single-payer health insurance system? Wouldn’t it cost more and mean higher taxes?” The answer is no. Even if you are covered by your company’s plan, a single-payer system would cost you far less than the system we now have.

The Cambridge Hospital, Harvard Medical School, and Public Citizen Health Research Group did a study in 2003 of health insurance costs and found that if we switched to a single-payer system we would save hundreds of billions of dollars. The study said that private insurance companies in the U.S. waste about $400 billion a year on administrative costs. The waste results from the elaborate, overlapping, and redundant bureaucracy, enormous executive compensation packages, employee salaries, benefits, separate facilities, advertising, marketing, profits, and other expenses of dozens of competing insurance companies. Who is paying for this waste? You are. What would happen if we had a single-payer system in which the government was the insurer of record? The waste would be eliminated.

You pay for the $400 billion in waste through extremely high premiums and other costs connected with private insurance. Your employer pays money for health insurance which it might, in part, be paying you as salary. It also deducts a substantial amount of money from your salary for health insurance premiums. In addition, you have co-pays, deductibles, and other out-of-pocket costs. The cost of health insurance goes up dramatically each year, and each year companies shift a higher and higher share of the costs of health insurance to their employees. Many companies are completely eliminating health insurance coverage.

According to a study done by The Kaiser Family Foundation and Health Research and Educational Trust, premiums for employer-sponsored health insurance rose by an average of 9.3 percent per year for the past three years. Premiums have increased much faster than overall inflation (3.5 percent) and wage gains (3.8 percent).

Each year the average employee pays over $3,000 just for his or her contribution toward premiums for company-provided family health insurance. In addition, most workers must meet certain deductibles before their health insurance kicks-in. Deductibles for family health plans are as much as $1,715 per year. Workers may also have to pay additional deductibles for hospital stays and outpatient procedures. Most employer plans have co-pays and other out-of pocket expenses. Thus, the average employee winds-up paying over $6000 per year for health insurance and health care that is supposedly covered by his or her employer. Health insurance for people whose employers do not provide coverage is over $13,500 per year.

How would a single-payer system be paid for? (PNHP) Physicians for a National Health Program explains that the public financing already funneled to Medicare, Medicaid, and other government health insurance programs would be retained. The difference or the gap between current public funding and what we would need for a universal health insurance system could be financed by a payroll tax on employers (about 7 percent) and an income tax on individuals (about 2 percent). The payroll tax would replace all other employer expenses for employees’ health care. The income tax would take the place of all current insurance premiums, co-pays, deductibles, and other out-of-pocket payments.

A 2 percent income tax is dramatically less for most people than the amount they now pay for employer-provided health insurance. If you have an adjusted gross income of $60,000 per year, your tax would be $1,200. That’s about $4,800 less than you now pay for company insurance premiums, deductibles, and co-pays. The plan proposed by Hillary Clinton could make the tax even lower. She would pay for her health plan by eliminating the Bush tax-cut for people making over half a million dollars per year.

Right-wing demagogues like Bush will argue that a single-payer program is “socialized medicine.” That is mendacious nonsense. A single-payer system would not do away with private doctors. People would be able to choose their own doctors, specialists, clinics, and hospitals. People would be allowed to buy their own supplemental health insurance for additional treatments and benefits just as they are allowed to do in European countries. A single-payer system would save lives and expand the rights and choices of millions of people who are trapped today in a miserable, corrupt, faulty system of costly, restricted, wasteful private health insurance.