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A Tale Of Two Medicares

By Matthew Yglesias on June 4, 2011 at 11:50 am

"A Tale Of Two Medicares"

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It would be difficult and undesirable, though not impossible, to simply take a “do nothing” attitude toward Medicare and pay for it with much higher taxes. But what’s more, as Paul Krugman says even if you do accept the desirability of reducing the projected rate of growth in Medicare expenditures there’s no reason to think its single-payer structure needs to be changed, or even should be changed. The point is best illustrated, as he says, with reference to Canada’s universal single payer health care program which is called “Medicare” and is pretty similar to American Medicare except that non-seniors are eligible for it.

The point about affordability is well-made with this chart from the New England Journal Of Medicine:

Now to be clear, this is from an article expressing skepticism about the Obama administration’s cost-control claims in the Affordable Care Act. But the specific grounds for the skepticism is that the ACA isn’t socialistic enough:

It seems clear to us that the latent cost-control effect in Canada is unlikely to be replicated in the United States, because a unified or universal insurance scheme that would create a national monopoly capable of achieving widespread cost control is not on the horizon. Without a single-payer system, this country may never achieve the cost-control effects enjoyed by other industrialized countries. Instead, every measure that expands coverage for underserved populations may lead only to further cost increases.

That, however, is a political judgment. Even without monopoly insurance provision, the vast majority of health insurance in the United States relies on indirect financing by the federal government. Except for politics—which is obviously a huge “except”—there’s nothing stopping us from squeezing providers, Canada-style, and acquiring cheaper services. Indeed, we could probably be more successful than Canada because Canada needs to worry about doctors decamping from Vancouver to Seattle. American doctors would have noplace to run.

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