A bi-partisan goal for healthcare reform is that all people have coverage. The question under debate is how to accomplish that: is it through insurance mandates with subsidies for those who can’t afford it, further de-regulating the health insurance market in the hope of incentivizing competition and lower costs or a publicly-financed universal health insurance.
The Affordable Care Act (ACA) applies the mandate model with public insurances for our most vulnerable populations – low income and elderly.
A new study by the National Bureau of Economic Research of the Massachusetts health plan, passed in 2006, finds that it is not possible to subsidize our way to universal coverage. Even subsidizing 90% of the cost of health insurance for low income individuals only resulted in 80% coverage.
The study cites a chart by the Kaiser Family Foundation showing that nonelderly uninsured are distributed across the income spectrum. This means that policies to address coverage need to target all income levels.
In 2016, the US Government spent $300 billion on subsidies to private health insurers. Hundreds of billions of more healthcare dollars were spent on administration related to hundreds of different health insurance plans, multi-million dollar CEO salaries and profits for investors.
If we can’t subsidize our way to universal coverage, then we need to reject the failed model of private health insurance and rapidly adopt the proven solution – a universal publicly-funded and privately-delivered national health insurance.
Business CEO Richard Master explains why in “A businessman makes the case for single payer health care system.”