October 7, 2008 1:33PM

Is Barack Obama’s Health Plan a Prescription for Socialized Medicine?

Barack Obama's health plan would enroll more than 50 million Americans in new and existing government health programs, effectively doubling the Medicare rolls.  It would increase taxes on nearly all workers.  It would give the federal government near-total control over health insurance, by letting Washington control prices and dictate the content of every private health plan in the country.  It would create a new government agency whose research would help government and private insurers ration medical care.  Harvard University and Harris Interactive recently polled Americans who claim to know what socialized medicine is, and found:

  • 79 percent believe that universal coverage equals socialized medicine,
  • 73 percent said that socialized medicine exists when “the government pays most of the cost of health care,”
  • 60 percent consider Medicare to be socialized medicine, and
  • 57 percent believe Obama supports socialized medicine.

Obama has repeatedly voiced his support for a single-payer health care system -- the type of plan most people have in mind when they use the term socialized medicine.  Many who support Obama's health plan, such as New York Times columnist Paul Krugman, do so because they believe the Obama plan would lead to socialized, single-payer system. 

So is Obama's plan a prescription for socialized medicine? 

Somehow, respectable folks at the Urban Institute, The New York Times, The Washington Post, FactChecker.org, and National Public Radio still say no.  Their reasons boil down to these:

  • It's only socialized medicine if the government employs the doctors and provides health insurance directly.  But that can't be right.  There is little functional difference between health care system A, a public program through which the government taxes and spends your money on its health care priorities, and health care system B, a completely “private” system in which the government forces you to spend your money on identical priorities.  What matters is not whether health care is nominally "public" or "private," but who controls the resources.  Even Center for American Progress scholar Jeanne Lambrew acknowledges that a (nominally) private sector is no barrier to socialized medicine: “the government role in socialized medicine systems [can include] public financing of private insurance and providers.”
  • It's only socialized medicine if there's government rationing.  But that can't be right, either.  Barriers to access occur when the government limits spending below what is required to meet patients’ demand for medical care. To say that socialized medicine only exists when there are waiting lists or other access problems is to make the rather curious argument that socialized medicine would disappear if the government wrote bigger checks.

I offer a more reasonable definition:

Socialized medicine exists to the extent that government controls medical resources and socializes the costs.

In a Cato Briefing Paper released today, I use that reasonable definition of socialized medicine to show how America's health-care sector is already more than half-socialized, and how Obama's health plan would take us the rest of the way there.