Commentary

Universal Health Care Won’t Work — Witness Medicare

By Sue A. Blevins
April 11, 2003

They’re back. The single-payer advocates are out in full force, again, calling for universal health insurance for all Americans. This time they’re backed by a bipartisan coalition including Presidents Gerald Ford and Jimmy Carter. Some of the current proposals are as coercive as Hillary Clinton’s infamous national health plan. The new push carries the same message, but more “moderate” messengers deliver it.

At first glance, many Americans might find the idea of single-payer health insurance appealing, given current economic conditions and high health insurance costs. However, before we accept such a drastic shift in national health policy, we should examine how single-payer health insurance could affect all individuals’ health care costs, choices and privacy.

If history is any indication, any single-payer initiative will end up costing much more than advocates claim. That, in turn, will lead to higher taxes and/or rationing under which the government will determine which medical treatments will and will not be covered. How do we know this will happen? Because single-payer health care has already been empirically tested on seniors in the United States. Many people may not realize it, but the Medicare program is one of the largest single payers of health care in the U.S. and in the world. An examination of Medicare’s 38-year-old track record provides evidence of what happens when the government controls the financing of health services for millions of U.S. citizens. Consider the following facts.

When Medicare was debated in 1965 (the year it was signed into law), business and taxpayer groups were concerned that program expenditures might grow out of control. However, single-payer advocates assured them that all seniors could easily be covered under Medicare with only a small increase in workers’ payroll taxes. The federal government’s lead actuary in 1965 projected that the hospital program (Medicare Part A) would grow to only $9 billion by 1990. The program ended up costing more than $66 billion that year.

Just three years after Medicare was passed, a 1968 Tax Foundation study found that public spending on medical care had nearly doubled in the first few years of Medicare. In subsequent decades, Medicare payroll taxes and general taxes have continued to rise to pay for skyrocketing health care costs.

Tom Miller, director of health policy studies at the Cato Institute, explains the main problems with Medicare (single-payer) financing. “As fiscal pressures mount, the federal government does not ‘negotiate’ with medical providers for lower prices for covered services,” says Miller. “It dictates below-market reimbursements with its near-monopoly power as a purchaser of health care for seniors. The full costs of such price discounts eventually reduce access to quality care and hold health care markets hostage to political exploitation.”

Before Medicare was passed, seniors were promised that the program would not interfere with their choice of insurance. However, existing rules force most seniors to rely on Medicare Part A to pay their hospital bills — even if they can afford to pay for private insurance. Additionally, today’s seniors and doctors must abide by more than 100,000 pages of Medicare rules and regulations dictating what types of services are covered or not under the program.

Currently, many Americans choose to pay privately for health services to maintain their medical privacy. However, a single-payer health plan would eliminate that option and all citizens would be forced to give up their ability to maintain a confidential doctor-patient relationship. Just look at what has happened with Medicare.

Under Medicare rules established in 1999, patients receiving home health care are required to divulge personal medical, sexual, and emotional information. Government contractors — mainly home health nurses — are directed to record such things as whether a senior has expressed “depressed feelings” or has used “excessive profanity.” If seniors refuse to share medical and lifestyle information, their health care workers are required to act as proxies. This means total strangers will be permitted to speak for seniors.

Medicare officials stress that the government protects patients’ privacy. However, the General Accounting Office reported to Congress several years ago that at five of 12 Medicare contractors’ sites, auditors were able to penetrate security and obtain sensitive Medicare information. At a time when citizens are concerned about high health care costs, fewer choices and loss of medical privacy, a single-payer health plan could exacerbate these concerns. Given our empirical evidence from the single-payer Medicare program, a single-payer health insurance program for Americans of all ages would most definitely lead to increased costs, reduced choices and less medical privacy for everyone. These are warning signs that no American — including the moderates pushing universal health care — can afford to ignore.

Sue A. Blevins is president of the Institute for Health Freedom and author of “Medicare’s Midlife Crisis” (Cato Institute, 2001).