On the fast track to single payer?

Only a few months ago, Goldman Sachs was touted as an incredible bastion of strength in the face of the credit crunch. Sure some other institutions might have been suffering, but Goldman was savvy enough to earn record profits in 2007. The average bonus was a whopping $600,000 per employee. Then very suddenly Goldman and pretty much the whole industry collapsed. The federal government has stepped in, and a partial nationalization of the financial industry is underway. That’s not the free market, it’s socialism.

While actual socialism was being carried out by the Republican Administration in Washington, out on the campaign trail, McCain and Palin were bashing Obama for allegedly socialistic policy proposals, namely rolling back the Bush tax cuts for high earners. Obviously the voters didn’t buy it.

Thanks to the credit crisis, companies and non-profits are starting to lay people off. My inbox is filling up with messages from people who’ve been given the sack and are searching for their next gig. Today I received such a notice from a close friend at Goldman Sachs itself.

The unemployment rate is going to go through the roof, in my opinion, and a lot of talented people in the prime of their careers are going to have trouble landing good jobs anytime soon. Many people in their fifties and early sixties are going to be forced into early retirement. The way the system is set up now many of them are going to get screwed on their health insurance. They’ll find COBRA coverage available but costly (they’ll pay what their employer paid plus another 2%) and individual coverage less available –or unavailable– and also costly. The depletion of retirement/rainy day savings from the financial meltdown will make this problem even more acute. Even if people do manage to come up with the premiums COBRA eligibility expires after 18 months.

In the midst of all this, health insurance companies are likely to try to boost premiums. They’ve suffered massive losses on their investment portfolios, which is hurting earnings, and they’ll need to make up for it with higher premiums.

At the same time, state programs will suffer from an increase in demand and a decrease in tax revenue. Private programs are already being hit; pharmaceutical company patient assistance programs are seeing an unexpected impact as middle class patients try to get in.

I know that the consensus view is that the Obama Administration will put off health care reform for a couple of years, settling instead for modest changes such as increasing funding for children (through the SCHIP program) and regulating insurance companies. In fact, that’s what I’ve been expecting. After all, there are bigger fish to fry and health care reform would require the development and nurturing of a fragile national consensus.

However, in this environment I’m starting to change my mind. I think it’s quite possible that a consensus may emerge from the grass roots level in favor of a single payer health care system. Health insurers aren’t that popular anyway, and as business owners, the unemployed, and the underemployed lose confidence in their ability to afford premiums and start worrying about losing access to health care, I wouldn’t be surprised to see people coalescing around a government solution. And don’t forget about health care providers. Hospitals and doctors don’t want to deal with uninsured people either –or insured people who can’t afford their co-pays and coinsurance—and they may actually be open to the idea of the government taking over.

I don’t want to see single payer and it probably won’t happen, but conditions in this country are more favorable for the idea than I’ve ever seen.

November 5, 2008

4 thoughts on “On the fast track to single payer?”

  1. Health insurance and benefits are complicated. There are numerous types of plans and providers, and each has nuances. Surely, without effective price regulation, there will be many providers that may try to squeeze people on premiums and/or deductibles, as well as questionable coverage levels. I am self employed, and had such a headache trying to sift out the bad deals and scammers. I wanted decent levels of coverage through a well known provider- that wouldn’t cost me an arm and a leg… Too much to ask? Well, luckily, I found out about SurePayroll Insurance. They focus exclusively on small business and individual health insurance. Their benefits experts explained why I would consider buying into one type of plan over another. They also informed me of whether the plan is compatible with a health savings account, and how I could lower my premiums while still getting the kind of coverage I needed. So now, no matter if I change or lose my job, at least I know that I will keep my insurance active. Now, somebody please tell me how we can make it more affordable without ruining it entirely!

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