April 2020

The U.S. healthcare sector is unique in the world. But this is not to say that it’s a model.

American healthcare is paid for by a complicated mix of patient payments, private insurance, and various federal programs. It features an unusual employer-based insurance system owing to a longstanding tax loophole. Provision varies significantly from one state to another because of federalism.

Why not just simplify the whole thing? It’s a reasonable question, because the system is well-known to bear a great deal of waste, fraud, and abuse. An individual consumer’s health care costs bear little relation to scarcity and may deviate wildly from what other consumers are paying. Many have no health insurance at all and can’t afford what it would cost.

One proposed simplification is to expand the federal government’s Medicare program—originally focused on seniors—to cover everyone. Presidential candidate Bernie Sanders has promoted the idea, and it remains popular among progressives. Is it a good idea?

The Cato Institute’s Director of Health Policy Studies Michael F. Cannon writes this month’s lead essay, in which he casts doubt on Medicare for All in a variety of ways. In the coming days, we will post response essays by Prof. Sherry Glied of New York University, Prof. Jay Bhattacharya of Stanford University, and Dr. Micah Johnson of Harvard Medical School, each of which will offer a different take on the question. We look forward to readers’ comments as well.

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Lead Essay

  • Michael F. Cannon finds many faults with Medicare for All, starting with the fact that it would reduce patient choice in ways that even citizens of Canada, the United Kingdom, and the Scandinavian countries do not experience. He rejects the idea that M4A would save money, and he describes the existing Medicare program’s history of failing to correct itself when it delivers inefficient and substandard care.

Response Essays

  • The health care status quo in the United States is nothing to be proud of, writes Sherry Glied. The U.S. response to COVID-19 in particular highlights the weaknesses of a system that is too expensive and that prioritizes the rich to an unacceptable degree. We face shortages of basic equipment that other countries do not, and this isn’t a failing limited to the pandemic. While she does not see Medicare for All as an especially good alternative, she concludes that it would nonetheless be much better than the status quo.

  • Writing with Jonathan Ketcham, Jay Bhattacharya explains how health care providers under Medicare face a series of perverse incentives—rewards, in essence, for inefficient and costly medical care. A system like this one can’t be expected to correct itself if and when the law makes it the only system around. Other countries’ socialized health care systems have also failed to deliver life expectancy or lower costs.

  • Micah Johnson disputes several of Michael Cannon’s empirical findings and argues that Medicare for All would indeed give all Americans a health care plan that was safe and affordable. Selling health insurance on the open market has failed to control prices; other countries, which use a variety of single-payer, government-administered systems, generally enjoy lower spending per capita and a higher standard of health than we do. He concludes that within a wide range of possible variants, any form of medicare for all would be closer to this appealing international norm.

The Conversation

Coming Up

Conversation through the end of the month.