Introduction: Surviving Health Costs to Retire: Health (and Retirement) Savings Accounts
New topic 2016-03-08 22:42:53 description
Single payer is a political slogan, not a program, and I for one don't know what it exactly implies. My guess is, no one was expected to know what it meant, so it could gather votes and provide "deniability" without explaining the bad parts. However, I'll take a chance and suppose single payer means extending Medicare to all ages and eliminating every other form of competitive medical payment. I favor individual health and retirement savings accounts, and I'm in favor of trying to extend uniformity of them to all ages. I offer no proposals for significantly modifying Medicare itself, but even offer suggestions for extending it to retirement income. But I am not in favor of monopoly, therefore not in favor of "single", eliminating competition in this or any other field. Furthermore, I have a few stones to throw at Medicare.
But there's a technical problem lurking underneath this political description of single payer. Look far ahead, and you can foresee medical care steadily eliminated by huge research efforts, especially for ages 50-65. Eventually, you can imagine sickness care reduced to two categories, problems related to being born, and problems associated with inevitable death. (The first year of life, and the last year of life, in insurance jargon.) Never mind how it narrows down, these two will persist. It's fairly easy to see how death can be anticipated decades in advance, and become pre-paid. But birth is a significant political problem. Some subcultures want a lot of children, some can't be bothered with any. Some say pregnancy is a subject for mothers alone to decide, some say it is a family decision, sometimes a paternal one. And some say it is a cost for the child to pay back because it is basically the baby's cost. Notice: It can be pre-paid only when regarded as a cost of the parents, or a temporary cost for them to transfer back to the child later. Of course, this is merely a transfer. Birth control has made it optional, but you won't willingly pre-pay an option if it isn't an option you ever want. If you don't pre-pay childbirth, but it happens anyway, whose responsibility is the cost? Until this last matter is settled -- and it may never be settled -- any whole-life pre-payment system is precarious.
So the problem for a healthcare finance designer is to avoid politics, designing a system which will peacefully address all concerns, and that last step is the most difficult one. The whole idea of a government system with equal justice implies one size fits all, but equal justice for life-long solutions is often impossible in the face of cultural disagreement. You are forced to consider at least two systems, only one of which can possibly be prepaid for a naked, penniless child. (If you are a smart politician, you will avoid suggesting the culture should rearrange itself for the convenience of health insurance because it won't.) And you also will be troubled by dual systems, since they create opportunities for loopholes. In other words, a workable scheme for pre-paying a cost for what can be expected to remain the second-largest health cost of the future must also envision some massive transfer system for that cost, with methods for rebalancing the books. We started by criticizing intergenerational transfer systems, and here we are, creating a new one. Late-night talk hosts may ridicule if they please. It may not be necessary for everyone to adopt the system, but it must retain an option to remain out of it. Looking at it from any minority culture's perspective, the concept of forcing a minority to adopt one-size-fits-all must yield to the requirement there must be at least two if there is to be any. The only reasonable resolution of such conflicts is to leave the choices about newborns to the consumer.
As for specific reasons to reject "single payer", one need add little more about Medicare than it is 50% subsidized by the government, so the government has to borrow that subsidy from (mostly Chinese) bondholders -- to question the wisdom of extending its post-payment model still further. Its popularity is no endorsement at all. Everybody likes to get a dollar for fifty cents. In fact, few people seem to notice the Medicare payroll tax, thus the only cost people really notice is the Medicare premium. To them, it seems like a dollar of care for fifteen cents, because those other payments are in the past. I'm going to skip on and assume we will all get Health Savings Accounts, liberalized perhaps in a few ways. Any description harms nothing if you don't use it; it must work if you do use it. Or else, just describe Health (and Retirement) Savings Accounts as a single payer if you must. HRSAs are certainly cheaper than any other proposal and provide an outlet for pouring unused surplus into retirement funding. If you wanted "to demagogue" the HSA idea, you might claim if you put enough money into it, a dollar's worth of care would come out the other end for a penny. But, please. HSAs might cut the price of care in half, but that's about the limit, after a lot of effort. The most recent rejector of single payer, defined by him as the Canadian system, was by Jonathan Oberlander in the New England Journal, who says he prefers the Affordable Care Act. It's more typical that Liberals advocate single payer because it isn't the Affordable Care Act.
Originally published: Friday, April 08, 2016; most-recently modified: Wednesday, May 29, 2019