Democrats Need To Nominate A Credible and Sensible Candidate for the 2020 Presidential Election
Posted February 8, 2019
The Democratic contenders for the 2020 presidential nomination are providing remarkably ill-informed advocacy for national health insurance.
Nova Scotia’s publicly funded health care costs about C$4,500 per person. That covers almost everything that happens in a doctor’s office or hospital visit, but not much for dental or prescription drugs.
Nova Scotians pay 15% sales tax on almost all goods and services. This only covers two thirds of the cost of government funded health care. The rest is covered by a portion of income taxes.
American public spending in 2017 on Medicaid (health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities), Medicare (65 and over), and military families amounted to just over US$5,000 (C$6,600) for every American, but only provided benefits to 37% of them.
Including privately funded health care, Americans spent US$10,200 (C$13,400) per person.
Americans’ spending on health care is substantially larger than any other advanced economy, yet their population health numbers are worse than most developed countries.
Into this troubled picture, Senators Sanders, Gillibrand, Harris, and Warren, among others, are proposing various versions of “Medicare for all” or other single payer systems.
Senator Kamala Harris’ declaration of support for Sanders’ proposal, “It’s just the right thing to do… Someone should tell my staff…” does not inspire faith in the depth of her analysis.
A single payer system has some big advantages. Administratively, it costs a lot less, not just because there are no insurance companies involved, but also because there is far less work for the legal community disputing how much doctors and hospitals should be paid.
American hospitals spend 25% of their revenue on administration; Canadian hospitals spend 12%. Canadian doctors spend a quarter of what their American counterparts spend on billing and administration.
The cost of health care in a single payer system should be funded by some combination of sales and income taxes, and possibly an annual per person charge. Americans already pay more taxes for programs that cover 37% of them than Canadians pay for a system that covers everyone. It is the largest destination for tax dollars in both countries.
That said, there are some hard truths that must be recognized.
- In a single payer system, the only way the payer can keep control of the budget is by limiting supply. In most European countries with national health care, the patient pays some portion of the cost, with further subsidies for people with low incomes.
In Canada, the government pays 100% of the cost, so there is no financial deterrent to demand. In that circumstance, there will always be an excess of demand over supply, often resulting in substantial wait times for care that is not urgently required.
- The single payer system must cover everyone. In the context of limited supply, the best care must go to the sickest patients, not the richest. It should not be possible to buy privileged access to the publicly funded system.
- Canada unwisely makes it difficult to buy government-insured services outside the system. Americans would do better by following what other developed economies do. Allowing people to buy care outside the public system, either directly or through insurers, reduces wait times for everyone.
Choosing to ignore these realities may endear candidates to the hard left Democrats, but it will open up their presidential contender to withering criticism in the 2020 campaign, and not just from Republicans.
Bernie Sanders energized many Democrats with his 2016 campaign, but some of his ideas—free college and university tuition; unlimited single payer health care including prescription drugs, vision, hearing, and dental care; universal child and prekindergarten care—are fiscally untenable. This year’s contenders are endorsing these and other expensive ideas without providing any credible plan to pay for them.
Losing to Donald Trump in 2016, a candidate many voters found repulsive, was not an easy feat. Trump maintains a 55% disapproval rating in February 2019. But the Democrats could lose again in 2020 if they are not able to offer a candidate who is relatable to the average voter.
That would be a great disservice to the American people and a disappointment to leaders around the world (well, perhaps excepting thugs such as Putin in Russia, Sisi in Egypt, Duterte in the Philippines).
The Democrats will do a good service to themselves, to their country, and to the world if they nominate a sensible, thoughtful, credible candidate for the 2020 election.
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