The Medicare For All Mystery

Issue 251

Why corporate America hates the health-care reform that would save it billions.

Paddy Quick Oct 8, 2019

Would “Medicare for All” mean higher taxes?  It’s a question that keeps coming up whenever the Democratic presidential candidates take to the debate podiums. This September, former vice president Joe Biden went on the offensive, demanding of his rivals, Senators Bernie Sanders and Elizabeth Warren, both of whom support a national health care system, how they would pay for it.

“I want to hear tonight how that’s happening,” he barked.

Biden and other critics of Medicare for All claim it amounts to “middle-class tax hike.”

Since it is an accusation frequently leveled against supporters of the health care reform, let’s break down the numbers. Would the Medicare for All Act, a bill introduced in Congress in February, lead to an increase in taxes? Yes. But what people would save on medical bills and insurance premiums would far exceed the extra taxes they’d have to pay, with the exception of the very well off. In addition, both Sanders and Warren would shift the overall burden of taxes to the rich.

Medicare for All would actually cover much more than Medicare does now, such as dental, vision and nursing-home care, there would be no copayments or deductibles and people wouldn’t have to buy private insurance to pay for the 20 percent of medical bills that Medicare doesn’t cover.

The need for a fundamental restructuring of the U.S. health care system is obvious. The United States spends about twice as much per capita on health care as comparably affluent countries in Western Europe, but its rate of infant mortality is often twice as high. For example, the U.S. spent $9,892 per capita on health care in 2016, while Finland spent $4,033. Finland’s infant mortality rate the next year, however, was 2.50 per 1,000 live births, compared to 5.80 in the U.S. That means that out of the 3.79 million babies born in the U.S. in 2018, about 12,500 died before their first birthday who would have lived if the U.S. had had an infant mortality rate as low as Finland’s — about 34 a day.

Insurance companies would be the main corporate losers from Medicare For All, but the private health care insurance system is notoriously inefficient. Only 3% of Medicare’s expenses today go to cover administrative compared to 25-30% for the insurance corporations. This has created a system where the first thing a patient has to do when visiting a doctor’s office is speak with the clerical workers who are responsible for ensuring that the patient’s insurance plan will cover the cost. These administrative costs are now paid for by the people they insure.

The current system is also expensive for businesses. Most of the largest U.S. corporations provide some of their workers with health insurance, at a cost that is often well over $10,000 a year for a family. Employers continually try to get workers to pay a bigger share of the costs, from premiums to copayments to deductibles. One of the things that provoked the General Motors strike of September was that the company demanded that workers pay 15 percent of the costs of their health insurance, instead of 3 percent. Another was that GM wants to keep using temporary workers, who receive few or no benefits, as 7 to 10 percent of its total workforce.

Why, then, is the U.S. corporate class so opposed to Medicare for All, if it would save businesses the expense of paying for workers’ health insurance and the trouble of hiring staff to administer it?

The most basic reason is what it stands for. In a capitalist society, the need to obtain health care, along with food and shelter, is what requires workers to engage in the wage labor that generates the profits of the capitalists. Corporations that currently provide some form of health insurance benefits are well aware that the fear of losing those benefits makes workers more vulnerable to increased work pressure and less able to demand higher wages.

But even if corporations as a whole would be better off if the U.S., like most other countries, had an “efficient” health care system, they have a more fundamental reason for opposition. The most class-conscious capitalists recognize the danger inherent in the concept that health care is a human right. The growing support for Medicare For All is not simply a demand for “more,” like the demand for a $15-an-hour minimum wage. It challenges the very heart of the capitalist organization of society, the assumption that the distribution of the resources of society should be based entirely on market transactions.

Senators Sanders and Warren are the two Presidential candidates who have spoken forcefully in support of Medicare for All, though Warren has also indicated she might accept a weaker alternative such as “public option” insurance, allowing people under 65 to buy Medicare coverage.

If either is elected, they will make significant contributions to the desperately needed health and well-being of the working class. But while Warren campaign advocates a continuous process of “corrections” to the damages that result from unregulated capitalism, Sanders has brought into the arena of public debate the more basic contradiction between capitalism and human rights and is thus a more formidable foe than Warren.

Warren proclaims herself to be a “capitalist to my bones” in her support for a market-based economy. But she sees universal health care as one of many “correctives” needed to make capitalism function better. Sanders is a democratic socialist who sees Medicare for All as one of the components of a social system in which production is organized to meet the needs of people rather than the maximization of profits. This is a far more dangerous threat to capitalism than correcting its “inefficiencies.” Not all those who support Medicare for All, including Warren, agree with Sanders, but the movement has succeeded in raising a challenge to the status quo that promises to continue long past 2020.

Paddy Quick is a professor emerita of St. Francis College in Brooklyn and a member of the Union for Radical Political Economics.

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