A congressional candidate makes an argument for Medicare for All

Posted Oct 08, 2019

By Zina Spezakis


Medicare for All is as much an economic issue as it is a moral one. While pharmaceutical and health insurance companies reap ever increasing tens of billions of dollars of profits year after year, Americans have seen their health insurance premiums rise consistently over the past two decades.

The Affordable Care Act made real progress on expanding health insurance coverage, but we have much more work to do. 27.5 million Americans were uninsured in 2018, up nearly 2 million from the year before. Each year, 530,000 families file for healthcare-related bankruptcy, accounting for two-thirds of all bankruptcies filed, unchanged from before the ACA.

People are dying because they ration or cannot afford medicine. This isn’t just the uninsured. Health insurance companies refuse to cover the full cost of care, leaving ordinary Americans to make choices no one should have to make. Should I pay for insulin or the rent? Can I delay the start of my cancer medications due to cost?

As a country, we spend a greater percentage of our economy on health spending than any other wealthy nation, but we get worse outcomes. A comparison of 10 wealthy countries found that the United States had the most maternal deaths, the most infant deaths, and the lowest life expectancy.

We spend enough, more than enough, on healthcare. It’s time we disrupted the industry. Its lack of efficiency, huge overhead, and administrative costs are being shouldered by Americans in what effectively is a tax on their earnings.

And when I say tax, I mean tax. A tax, after all, is a compulsory contribution to revenue, but in this case, rather than going to the government, it’s going to a bloated and inefficient corporate bureaucracy. A total of 8% of our healthcare spending is taken up by administrative costs, compared to 3% in Canada and 1% in France. Adopting a system like the Canadian would save Americans money.

If employers must pay for health insurance premiums, there are opportunity costs. If companies did not have to pay for their workers’ insurance, those fungible dollars could be used for wage increases, training, or hiring more workers.

The economics of the health insurance business are irrational in many ways. Who pays, uses, sells and provides health care are different entities with little transparency or coordination. For example, the employer may pay for an employee to use an emergency room. But payment does not go to the hospital that provides the service. It goes to a health insurance company. The hospital sells its services to the insurance company instead of the actual user of the service. The health insurance company is the middle man that takes a cut. The normal forces of supply and demand do not work properly under these conditions.

Pharmaceuticals provide life-saving products, and yet they are often prohibitively expensive. Americans often spend multiples of what people in other countries pay. In Italy, insulin costs $19 a month. In the United States, it costs $360 a month. Perhaps, it’s time we provided proper private regulation for the pharmaceutical industry. Luckily, there is precedent in the utility sector for looking at price regulation. Utilities make reasonable profits, but cannot price gouge their customers because if they do, they lose their government sponsored monopoly.

Properly regulating pharmaceuticals is essential, but does not address the larger issue of the huge administrative overhead necessary to deal with such a complex system of plans which drive health care costs. Only Medicare For All does that.

The average American spends about $10,000 on health care every year. Under a Medicare For All plan, this would drop significantly, depending on how we finance it. Congress should have a strong debate on how to finance Medicare For All. There are a number of proposals out, each lowering cost by different amounts. The bottom line is that as a share of its Gross Domestic Product, the United States spends nearly 18% on healthcare, much higher than any other industrialized country. That is about $3.5 trillion. And by some estimates, a third of that or about $1 trillion is in overhead. Overhead is driven by the complexity. That sounds like an industry ripe for disruption.


Zina Spezakis lives in Tenafly. She’s a mother of two and is running for the Democratic nomination in the 9th congressional district.

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