As we know, Bernie advocates replacing Obamacare with a single-payer system that is based on Medicare and similar to systems throughout the rest of the world. From a purely political perspective, his proposal is wildly impractical; it wasn’t even possible to include the public option in Obamacare when the Democrats had substantial majorities in both the House and the Senate. It would also result in the elimination of countless thousands of jobs in the health care insurance business. Let’s put those facts aside, however, and look at the merits of the proposal in a vacuum.
There are enormous advantages to single-payer if it is done properly. Single-payer systems have much lower administrative costs (the other side of the coin is the elimination of all of those private sector jobs) and, by creating a national consumer cartel, do a far better job of keeping costs down on a service-by-service basis than our system does. The problem is that someone has to pay for this; the fact that Vermont tried and failed to institute a single-payer system is, or should be, a cautionary tale.
Sanders is vague on this subject, but it would appear that he believes he can pluck enough feathers from employers and the wealthy to pay for the new system. I have two concerns about this:
- Logically speaking, universal benefits should be paid for by all of society, not just a relative handful of people; and
- The last thing we need to do in an era of globalization and technological change is to drive up the cost of labor. A new employer payroll tax, therefore, would be a huge mistake, in my opinion.