- Joe Biden’s public option proposes a health system by government that exists in addition to the private system that currently exists.
- Bernie Sanders has led the calls for a one-payer system, Medicare For All, removing options for private coverage.
- Supporters of Medicare For All should advocate for the public option, as it offers many of the same benefits.
- Nick Buffie is an economics policy analyst and a graduate of Harvard Kennedy School.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit the Business Insider website for more stories.
When Bernie Sanders ended his presidential campaign, he released a video outlining his vision for the future of America. He called for a transition to a more economically just society, and then ended with a quote from Martin Luther King Jr .: “The arc of the moral universe is long, but it bends toward justice,” he proclaimed.
For health care advocates with one payer, movement along that arc has seemed exceptionally embarrassing. A single payment system was included in the original draft of the Social Security Act of 1935. Yet 85 years later, Sanders’ proposal “Medicare For All” is supported by just 14 members of the United States Senate.
Many Sanders fans have, understandably, become frustrated. In the very Democratic primary, Bernie criticized Joe Biden for supporting a public option – a plan in which the government provides an insurance plan for all Americans as an alternative to private insurance. Bernie portrayed this proposal as a half-hearted measure that “would essentially maintain the status quo.”
But if you’re a single payer, rest easy: Biden’s plan incorporates many of the upsides of a traditional single payer scheme. The difference is that his public option has a better chance of being introduced.
An incentive for low- and middle-income workers
The first major benefit of a single player system, as Bernie thinks, has nothing to do with health care. It’s about poverty. A shift from employer-sponsored to government-sponsored health insurance would increase the wages of low- and middle-income workers.
To understand why, think about how health insurance looks from an employer’s perspective. A for-profit company will always seek to cut costs so that it compensates its workers as little as possible.
But while employers want to reduce the cost of hiring an employee, they do not care how those costs are distributed. For example, $ 30,000 in salary and $ 20,000 in health insurance benefits cost an employer just as much as $ 50,000 in salary. Unsurprisingly, a series of academic studies have found that employers fund their workers’ health insurance by dipping their wages.
According to estimates by the Social Security Administration, this does most workers with low wages. Because of the cost of employee-sponsored health insurance, wages are cut by 10% for workers in the lower half of the wage distribution. For the richest 1 in 20 workers, wages fall by only 4%.
Single pay systems stimulate the income of working class people. Unlike employer-sponsored insurance, government-sponsored insurance can be financed through higher taxes on the income, estates and expenses of the rich.
And while the Biden plan is not a single-payer system, the public option offers many of the same benefits. Under current federal income tax, long-term dividends and capital gains are taxed at special extra-low rates. The dividend are regular payouts that corporations make to their shareholders; capital gains are profits made from the sale of an asset above the purchase price. In 2014 (the most recent year for which we have data), the 400 highest-income Americans extracted three-quarters of their income from these two sources. As a result, they pay just 23% of their income in taxes.
Biden would raise this specialized rate for all taxpayers with incomes above $ 1 million, and generate more than $ 440 billion in the coming decades, according to the nonpartisan Tax Policy Center. These new incomes would fund generous health care subsidies for low-income Americans. Thus, although Biden did not endorse the rhetoric of “redistribution”, his public option, like one payer, would increase the income of the poor, while decreasing the income of the rich. To the extent that Biden’s plan differs from a single payment arrangement, it is only a matter of degree.
More Americans get health insurance
The second big benefit of health care with one payer is that it covers everyone. Indeed, Biden’s plan is ineffective on this front. It would leave just under 3% of the population uninsured, which is 3% higher than what single-pay lawyers want.
However, Biden’s plan is also a significant departure from the status quo. Even before the COVID-19 outbreak, 8.5% of Americans were uninsured. By covering more than 97% of the population, Biden would get our country the most out of universal coverage. This equates to the gains after the Medicare, Medicaid, and Obamacare interventions, all three of which are rightly seen as monumental steps toward a more compassionate health care system. Biden’s public option deserves to be viewed in the same light.
However, there is one striking difference between Biden’s proposal and Bernie’s: it will not cost Democrats the election. A January 2019 poll by the Kaiser Family Foundation found that 74% of Americans believe people should be given the option to purchase insurance from the government. In contrast, 56% support Medicare For All (MFA), and support drops to just 37% when poll participants learn that MFA would eliminate private insurance. Since virtually every opinion poll suggests that health care reform is the top priority of Americans, the difference between a popular public option and a one-payer plan that expels a much larger portion of the electorate is likely to decide the election.
Biden’s plan would not maintain the status quo. Far from it. His plan would increase the income of poor and working class while taking important steps for universal coverage.
Attacks on Biden’s plan make the perfect the enemy of the good. And we are not just talking about the difference between a perfect health plan and a good health plan. If supporting an unpopular proposal like Medicare For All Donald Trump holds in the White House, Democrats will have offered the perfect health plan for the right health care plan, the right climate plan, the right education plan and so much more. If you’re a single payer, be sure to vote for Joe Biden’s public option in November.
Nick Buffie recently completed a Masters in Public Policy degree at Harvard Kennedy School (HKS). Prior to joining HKS, Nick spent three years working on two economic policy think tanks in Washington, DC.
