Universal coverage does not require single payer

By | March 14, 2017

Healthcare in the United States has been deemed a social right. No matter what happens, a person will always receive care under emergency conditions. There are also many organizations that make it their mission for all to receive non-emergent care. The idea of universal coverage is a bipartisan issue as there is no doubt that a healthier society is better for all. Instead the debate on healthcare is over how can we afford universal coverage in a way that does not lead to a single payer, and how we make sure individuals have options and are not “told” what to do.

A major issue to universal coverage is the fact that the cost of care is not spread out equally amongst all. A small percentage of people drive a large percentage of the cost, and one cannot predict who those people will be. This fact basically means that there is cost shifting at all times. The key to successful coverage is making sure all participate, thus spreading the risk amongst both healthy and unhealthy people. Though people do not want to pay for things they do not use, they also want full coverage when something unpredictable happens to them. We cannot have it both ways.

This latter fact is where it gets more complicated. In order for the risk to be spread amongst all, all must pay into a system. Under a single payer model, taxes would be used to pay for care or insurance for all. But there is another way. Instead, it can be mandated that all have health insurance. This individual mandate can create a model where the private sector can also succeed. If everyone is required to pay for insurance premiums, this will create an incredibly large business which leads to competition amongst insurance carriers, thus putting downward pressure on costs.

For this to work, insurance monopolies cannot exist. The regulatory and risk environment must allow for smaller companies to be created and succeed. Governmental-backed reinsurance is one way to allow for such competition. Yes, there can be problems with this model, but we must remember the goal is for universal coverage and access through the private sector.

Now for the hard part: How do you force people to buy insurance? To what level of coverage will all be required to have? If we look globally, there are some excellent examples of how to accomplish this goal. Switzerland, Singapore, and Germany have all created different models of individual mandates that are supported by their governments in different ways, but is run within the private sector and allow for personal choice.

We must remember that there is no perfect way to have universal coverage without lots of gives and takes. Though we can use business principles for creating a more affordable model of coverage and care, at the end of the day, healthcare is a social right and therefore is not a pure business, and will require mandates and governmental support. Our goal should be to solve this problem in a manner that creates a just society in which all receive a basic level of care with stewardship of our resources.