Will the attacks on Obamacare lead to a single-payer system?

The unrelenting opposition by American conservatives to Obamacare may have the unintended consequence of leading the United States to a single-payer system like Canada’s.

How’s that, you say? Isn’t the whole point of conservative opposition to Obamacare to drive home the point that the government is incapable of managing people’s health care?  Yes.  And aren’t conservatives effective in driving home that point? Yes, polls show that confidence in government is at an all-time low, no doubt related in some degree to the attacks on the Affordable Care Act and its chaotic launch.  (The VA scandals undoubtedly will also undermine trust in government, as I noted in a recent guest blog post for the Philadelphia Inquirer.)

Yet when future historians write the history of health care reform in the United States, they may very well report that Obamacare was a stepping stone to single-payer — not because liberals persuaded voters that we’d be better off with the government fully in charge (they’ve been trying to make that case for decades, with little evidence of success), but because conservative opposition to Obamacare ended up destroying employer-based private insurance, leaving the government as the only remaining payer.

Consider the following:

The Supreme Court ruling in the Hobby Lobby case is widely viewed as a victory for conservatives, since it reins in the ability of government to impose mandates on for-profit companies that violate their owners’ religious beliefs.  But Don Munro, a contributor at Forbesprovocatively asks if Hobby Lobby will “signal the end of employer-sponsored health insurance.” Fred Rotondaro and Christopher Hale from Catholics in Alliance for the Public Good persuasively argue that the Hobby Lobby decision:

… brings to the forefront something we’ve all known for sometime: that Obamacare — for all the good it’s done in increasing access to quality and affordable health care — is a messy law. It asks employees to be at the whim of its employers’ objectives and mission for what health care benefits they receive. It also asks employers to at times reject its deepest convictions in order to provide certain benefits to its employees.

This isn’t sustainable. A person’s access to quality health care shouldn’t depend on who their boss is. And an employer shouldn’t be heavily fined if they don’t compromise their religious convictions in providing health care for their staff. . . A single-payer public health care option eliminates such complications. No matter who your boss is or what business you work for, you get access to the health care you need. And employers will not be forced to compromise their religious beliefs while providing the public good of health care.

And let’s be clear, if you have something that is both supported by the United States Conference of Catholic Bishops and Planned Parenthood, you might be onto a plan that proves the angel Gabriel right: nothing is impossible with God.

Renowned health economist Uwe Reinhardt also believes that the Hobby Lobby rule may lead Americans to re-examine employer-based health insurance:

The ruling raises the question of why, uniquely in the industrialized world, Americans have for so long favored an arrangement in health insurance that endows their employers with the quasi-parental power to choose the options that employees may be granted in the market for health insurance. For many smaller firms, that choice is narrowed to one or two alternatives – not much more choice than that afforded citizens under a single-payer health insurance system …

… the Supreme Court’s ruling may prompt Americans to re-examine whether the traditional, employment-based health insurance that they have become accustomed to is really the ideal platform for health insurance coverage in the 21st century. The public health insurance exchanges established under the Affordable Care Act are likely to nibble away at this system for small and medium-size business firms, especially those with a mainly low-wage work force. In the meantime, the case should help puncture the illusion that employer-provided health insurance is an unearned gift bestowed on them by the owners and paid with the owners’ money, giving those owners the moral right to dictate the nature of that gift.

But it isn’t just Hobby Lobby where conservative opposition to Obamacare may help bring about single-payer.  CNBC reports that another pending court case against Obamacare’s insurance subsidies, instigated by conservative critics of the law, makes the claim that:

… those often-valuable subsidies are illegal because the Affordable Care Act only authorized such tax credits for people who bought insurance through one of the exchanges originally set up by an individual state or the District of Columbia — not the federal exchange. Nearly 90 percent of the people who enrolled in plans via the federal exchange qualified for those subsidies because they had low or moderate incomes. Take away those subsidies and many, if not most, of the enrollees on HealthCare.gov might not buy insurance next year because they will find it unaffordable at the full premium price. That, in turn, could create a much-feared ‘death spiral,’ where insurance pools have too many sick enrollees and not enough young healthy ones, and premium rates skyrocket. And if those subsidies are not available to individuals in the states served by HealthCare.gov, it would also mean that businesses in those states could not be mandated starting next year to offer affordable health insurance to their workers or pay a fine. That’s because the so-called employer mandate is linked to the availability of those subsidies for workers who opt to buy individual insurance.

A court ruling for the plaintiffs in this case (although considered unlikely) would be another huge blow to relying on private health insurance to make affordable coverage available to most Americans, because it would keep all Obamacare’s benefit mandates on the books, while making the private insurance offered through the exchanges unaffordable to the millions of people it was supposed to help.  But the “public option” part of Obamacare — Medicaid — would remain intact.

And let’s not forget that conservatives are stoking public opposition to Obamacare’s mandate that people buy private insurance — even though they once championed an individual insurance requirement as an alternative to either single-payer health insurance or requiring employers to provide coverage.

Now, I don’t see the United States rushing head-long into a single-payer system (although just about all Americans regardless of their political leanings love Medicare), because the country is deeply polarized, and people have little trust in government, and even less in politicians.

But it’s plausible that over time the unrelenting conservative attacks on Obamacare will end up showing Americans that it is just too difficult to provide affordable coverage through a system of regulated and subsidized private insurance and by counting on employers to continue to offer coverage, especially when employers can opt out if they have religious objections.   Conservatives then will not just have destroyed Obamacare — they will have opened the door to single-payer as the only feasible way to provide affordable health insurance coverage to all.

Bob Doherty is senior vice president, governmental affairs and public policy, American College of Physicians and blogs at The ACP Advocate Blog

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  • Thomas D Guastavino

    Interesting take. You are correct when you say that Obamacare is a step toward single payor. However, it is not conservative opposition that will cause the change. The entire system was designed from the beginning to collapse the private insurance market. When the government subsidies that were the bribes to the private carriers to not oppose the ACA dry up, premiums will skyrocket. The public outcry will inevitably lead to some politicians (Harry Reid comes to mind) to claim the the health care system is in crisis and it is up to the government to step in and “save” the system.

    • southerndoc1

      “When the government subsidies that were the bribes to the private carriers to not oppose the ACA dry up”

      The ACA was written by the insurance industry to facilitate the transfer of enormous amounts of public funds into the coffers of private companies. This corporate/government alliance won’t be severed for a long, long time.

      • Thomas D Guastavino

        Exactly. Obamacare is heavily subsidized. Premiums are now dependent on the amount of the subsidy which puts the government in control.

        • southerndoc1

          And who controls the government on this issue?

          The insurers. They’re not going away.

          • Thomas D Guastavino

            So…it sounds like you resent the idea that that private insurers are not “going away” You support full government takeover.

          • southerndoc1

            No, I object to the insurers being given enormous sums of tax-payer money and in return only being required to provide a truly lousy product on the exchanges. I object to corporate welfare. I object to highway robbery.

          • Thomas D Guastavino

            So…. the insurers were bribed (given an enormous amount of tax-payer money) to provide a “truly lousy product” which will eventually result in……what, leading to….what?

          • southerndoc1

            “what, leading to….what?”

            Record corporate profits, funded by the tax payers.

            United Healthcare is now one of the 25 largest corporations IN THE WORLD.

          • Thomas D Guastavino

            So….your solution to all this would be…?

          • southerndoc1

            Highly regulated private insurers, as seen in some of the Western European countries.

            Strict enforcement of anti-trust laws.

            All required to carry insurance.

            Sliding-scale subsidies paid to the individual.

          • Thomas D Guastavino

            So…..Run it like a utility. And the providers response should be….?

          • southerndoc1

            No, utility companies are monopolies.

            Ideally, there would be multiple insurers in every market. They could also sell supplemental policies to cover non-standard services.

            I’m also inclined to allow balance billing by docs (but not hospitals), so they would truly be competing on price and quality, as determined by patients.

            If I were king . . .

          • Thomas D Guastavino

            Sounds a bit to complicated to me, to easy for a politician to make political hay. (Kind of like whats going on with Obamacare now). To quote Scotty (Star Trek). “The more complicated the plumbing the easier it is to stop up the drain”

          • ErnieG

            I agree with you. This is a step towards single payer. Insurances may make record profits, but citizens will get lousy care and blame the insurances. Government will be more bankrupt. This is a perfect situation for a political demagogue.

          • southerndoc1

            “citizens will get lousy care and blame the insurances”

            Nah, they’ll blame the doctors.

            My point is that the insurers are far too powerful to allow themselves to be put out of business. If they need more government funds, they’ll make sure it’s taken from infrastructure, education, SS, etc.

          • ErnieG

            That is highly unlikely. As long as physicians have direct personal contact with patients, and insurances become larger, it will be very easy to demonize insurance companies. Your view of history is too short. History is full of large companies put out of business by governments (as well as large governments falling). They bigger they seemingly are, the harder they will fall (think British East India Tea Company)

          • DeceasedMD

            I am not a fan of insurance either nor banks. But the fact is the banks are doing quite well after their bailout. I think as pointed out on all these posts there is an unhealthy tie between the MIC and government. And they are both corrupted. Truly makes me sick how much profit is made from teh MIC: inefficient systems and often useless products. It is astounding how much hospitals charge and insurance pays.

  • QQQ

    The problems of ACCESS to healthcare and the COST of healthcare are
    related. “Obamacare” is more of an unsuccessful attempt to fix the former problem, while ignoring (or exacerbating) the latter. And while everybody’s got
    their own boogiewoogie man for the unsustainable costs of healthcare – Obamacare, greedy pharmaceutical companies, greedy insurance companies, greedy doctors, etc., the real problem is far more fundamental: The absurd
    proposition, that the way to finance all healthcare is through “insurance,” public or private.

    The purpose of insurance is to mitigate risk by having a large group of
    people pay a relatively small amount into a common pool, which makes a
    large payout to the few people for whom the risk becomes reality. One
    “insures” against rare and unaffordable loss. But most healthcare does
    not fall into this category of unaffordable loss that will hit only a
    few (even if some of it does). All of us “consume” healthcare, incurring
    regular and routine medical costs even if we never suffer catastrophic
    or prolonged illness. Insurance is a spectacularly inefficient way to
    pay for such routine care, and its use in this context introduces
    distortions and perverse incentives that reverberate throughout the
    entire healthcare “market.”

    Insurance drives up costs by adding a huge administrative burden to
    every healthcare transaction, by stifling market-based competition, and
    encouraging over-consumption by divorcing the price of healthcare
    services from the patients who use them. Insurance provides the illusion
    that “someone else” is footing the bill, but there is no free lunch
    here. Whether through taxes or “hidden” deductions from our salaries, we
    are ALL paying – and more than it’s actually worth. There are sound
    reasons why we don’t pay for auto maintenance with car insurance, or
    most home improvements with homeowners insurance.

    The solution is conceptually simple if politically difficult: Most
    “ordinary” healthcare (doctor office visits, prescription drugs,
    diagnostic procedures, ER and hospital outpatient treatments, etc.)
    should be paid for directly by the individuals who “consume” it. Leave
    insurance for what it is meant to be: Protection against “catastrophic”
    illness.

    Such a change would save enormous amounts of money. Many routine costs
    (certainly a large proportion of total healthcare costs) would instantly
    decrease by the ~30% that now goes to administer insurance because
    there is no longer a “middleman” between healthcare provider and
    consumer (and it’s not just insurance “profit.” After all, someone must
    generate, process, verify and pay the claims, on both the doctor and the
    insurance side of the transaction. These people also get paid).

    Also, it would eliminate much of the over-consumption that we now see
    because insured people perceive their healthcare to be essentially
    “free” to them. People are always willing to spend “someone else’s”
    money differently from how they’d spend their own. Would YOU opt for
    that expensive MRI scan to rule out a break, when your doc says it is
    most probably just a sprain – if it cost YOU $2000 out of pocket?
    Co-pays notwithstanding, there is little real incremental cost to
    increased consumption if you are reasonably well “insured.”

    Finally, healthcare providers themselves will be forced to become
    responsive directly to the consumer, instead of to third-party payers,
    which inevitably forces prices down. If you doubt this, look at the
    costs of procedures that are NOT covered by insurance, but must “market”
    directly to the patient like LASIK or cosmetic surgery. They are a
    fraction of the cost of equivalently complex “covered” procedures – and
    they are coming down as equipment depreciates and doctors compete for
    your business. This is what happens in a transparent, competitive
    market. But healthcare is anything but a transparent, competitive
    market! This is because you may be the patient, but you are not the
    “customer” of healthcare providers – your insurance company (or
    Medicare) is. And until the customer is in the equation, there is no
    market discipline, no “competition” – and costs can only ratchet in one
    direction.

    When the patient is also the customer, everything from the price of
    drugs and medical procedures, to the wait at your local hospital ER
    becomes subject to the same market forces as in every other
    consumer-facing industry. Until people recognize this basic economic
    fact, and as long as insurance remains the vehicle by which all
    healthcare is financed, costs will continue to spiral out of control.

    • James O’Brien, M.D.

      Insurance for routine services is prepayment of services with added frictional costs If Americans understood basic econ, they would be on board with real insurance.

      Imagine if homeowners covered painting and redecorating and roof repair. That’s what health insurance is. It’s so mind numbingly idiotic but maybe we are too collectively stupid to do the right thing.

  • James O’Brien, M.D.

    No one is fooled by this article which is full of projection. The pom poms are out. The author is hoping for single payor as were most of the bill’s authors. Harry Reid has admitted that it was a steppingstone to single payor. The author wants single payor but also wants to find another excuse to blame the opposition.

    I would like to hear from any internists in private practice who still belong to the American College of Physicians.

    • DeceasedMD

      Nice to get an accurate summary. I can’t tolerate reading Bob Doherty articles. Propaganda all the way.

  • edwinleap

    It’s so tiresome, this endless ‘the Conservatives are ruining everything.’ The consequences of the law are bad. People are losing insurance, people with insurance can’t find doctors who accept it, people with insurance see their premiums skyrocket (myself included). And the group that has seen remarkable increases in ‘insurance’ is the Medicaid population. But wait, what? They can’t find doctors either because the doctors can’t afford to accept their insurance and they end up using the ER, which was supposed to be a problem that the ACA fixed. Blame whomever you choose, rail and rant as you see fit. It isn’t working.

    • James O’Brien, M.D.

      It’s also dumb because Hobby Lobby has no significant effect on the economics of ACA.

      This article is pure projective identification…let one loose (enact a bill designed to fail) then blame your enemy for the smell

  • doc99

    I believe in a single payor – the patient.

    • Ava Marie Wensko George

      Until they get cancer….Then it’s all on the rest of us. We need insurance. We just have to figure out the best way to accomplish 100% coverage for all Americans.

  • QQQ

    Rasmussen Poll July 14, 2014 –

    Obamacare Approval

    Approve: 39%

    Disapprove: 54%

    • SteveCaley

      The fundamentals of the system are very fragile, and there is no going back.
      If we have a “soft crash,” the system will come to resemble the American Public School system in its bureaucracy and regulation.
      If we have a “hard crash” with deaths, we will have a version of the Public Service Corps as the only providers in town, and you will get what you get.
      We are in more peril than we expect.

    • Ava Marie Wensko George

      Obamacare approval numbers are not well defined. Who are the people responding to this poll? Are they Americans with insurance paid by the companies they work for? Are they Americans who are on the Obamacare plan? Statistics can be whatever you want them to be. Looking at the far skewed numbers, I’d say that the predominate population of Americans asked the Obamacare question are from the population pool of Americans who receive healthcare from their employers, and these people should be excluded from the question entirely. They have no skin in that game.

  • Thomas D Guastavino

    Thanks. At this point single payor is inevitable. It is time for docs to stop fighting and prepare. Trade Union anyone?

    • DeceasedMD

      Well the one thing you might have on your side is that you may note, Congress is in chaos themselves. They seem incapable of getting just about anything passed. They could not even compromise on a veterans bill.

      • Thomas D Guastavino

        Might slow it down, doubt it will stop it. No matter, its always better to be prepared.

  • Ava Marie Wensko George

    Bravo….I totally agree with you.

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