Fortunately, correcting the mistake is easy, if we’re willing to give a minute or two of thought to some rudimentary math and logic. I speak of the question of universal health coverage, particularly in the form of Medicare-for-all (in its multiple variations).
Before we proceed, there’s a number I want you to remember: $50 trillion. Keep that in the back of your head.
Right now, this debate is being framed in part as a disagreement between a bunch of Democrats peddling pie-in-the-sky notions on one side and more hardheaded and realistic critics (including but not limited to Republicans) asking the tough questions about affordability on the other. That framing is completely and utterly wrong, and even journalists of good faith are falling into its trap.
So for instance, former New York mayor Michael Bloomberg says “I think we could never afford that” when asked about providing universal coverage. The government might provide coverage to the uninsured, he says, “But to replace the entire private system where companies provide health care for their employees would bankrupt us for a very long time.” Likewise, former Starbucks chief executive and potential presidential candidate Howard Schultz dismisses the idea, saying, “It’s unaffordable.”
The fact that these two highly successful businessmen — whose understanding of investments, costs and benefits helped them become billionaires — can say something so completely mistaken and even idiotic is a tribute to the human capacity to take our ideological biases and convince ourselves that they’re not biases at all but are instead inescapable rationality.
Let me explain. There are any number of reasons you might oppose universal coverage. I happen to think they don’t add up to much, but you can make a case. Maybe you just don’t think it’s government’s job to make sure people are covered. What you cannot say, however, is that a universal system is unaffordable.
That’s because there is one thing you absolutely, positively must do whenever you talk about the cost of a universal system — and that journalists almost never do when they’re asking questions. You have to compare what a universal system would cost to what we’re paying now.
It isn’t easy to be perfectly precise about this, because there are multiple forms a universal system might take. But there have been some recent attempts to estimate what it would cost to implement, for instance, the single-payer system that Sen. Bernie Sanders (I-Vt.) advocates; one widely cited study, from a source not favorably inclined toward government solutions to complex problems, came up with a figure of $32.6 trillion over 10 years.
That’s a lot of money. But you can’t understand what it means until you realize that last year we spent about $3.5 trillion on health care, and under current projections, if we keep the system as it is now, we’ll spend $50 trillion over the next decade.
Again, you can criticize any particular universal plan on any number of grounds. But if it costs less than $50 trillion over 10 years — which every universal plan does — you can’t say it’s “unaffordable” or it would “bankrupt” us, because the truth is just the opposite.
I've made this analogy before, but it's as if you were heating your house by burning $100 bills in your fireplace, and I said, “Gee, maybe you should buy a new furnace; you can get one for a few thousand dollars,” and you replied, “Buy a new furnace? What are you, crazy? I could never afford that! Burning the $100 bills is the only reasonable thing to do."
We have a natural tendency to assume that someone who says something is unaffordable is being, if perhaps a bit of a downer, at least logical. Who tells you things are unaffordable when you’re growing up? Your parents, who say, no, our next car will not be Ferrari, and you can’t have an Xbox. It makes you mad when you’re a kid, but when you grow up, you realize they were right.
But right now, it’s the people who say universal coverage is unaffordable and want to continue with the status quo who are suggesting something outlandish. Which is why, whenever someone says a universal system would be unaffordable, the appropriate follow-up question is: “If we don’t change, we’re going to spend $50 trillion over the next 10 years. How do you propose to pay for that?”
There’s another follow-up question we should be asking, because universal coverage isn’t some kind of novel idea no one has tried before: “If universal coverage is so unaffordable, how come every other industrialized country on earth manages to afford it and spends less on health care than we do while insuring all their citizens? What do they know that we don’t?” Let me offer you a chart:
To repeat, every other country on that graph has universal coverage, the thing that people such as Bloomberg and Schultz believe is unaffordable. They do it in different ways — Great Britain has a single-payer system, while Germany has private but tightly regulated insurers — but they all cover everyone and, on average, they do it for half of what we spend. It’s great that Schultz’s company offers health insurance to its employees in the United States, but he should know that Starbucks stores in other industrialized countries don’t have to, because the government takes care of it.
That doesn’t mean that achieving universal coverage will be easy, or won’t require lots of policy choices, or won’t need tweaking over time as it evolves. If anyone characterizes it as something simple to implement, they aren’t being honest either. But if we’re going to talk about the cost — as we should — we absolutely have to talk about the cost of the current system.
No one would claim that moving to a system of universal coverage, whether through single-payer or something else, wouldn’t be a profound change. But we have a bias toward the assumption that change is impractical while maintaining the status quo — no matter how pathological the status quo may be — is if nothing else reasonable and practical.
In this case, it isn’t. Maintaining the status quo is a choice, a choice that will cost us $50 trillion. That’s the single most important fact to keep in mind as we talk about cost, and the people who have already forgotten it ought to know better.