A recent analysis by Charles Gaba yields important insights into the difficulties of making that transition. Gaba’s article focuses on one state—Texas. Using Texas as an example, Gaba shows that the logistics will be extremely touchy—and not just in a political way.
The biggest obstacle to transitioning from our current mix of employer-based and healthcare-exchange-based system, says Gaba, is “that at least a half a million people currently work directly for health insurance carriers, plus (I’m guessing) another couple million in directly related services.”
To illustrate this point, Gaba lists every company that offered private health insurance policies in the state of Texas as of 2014. There are 163 of them.
…The point is that moving to single payer (again, assuming that included replacing all private policies for everyone and assuming that it would be a comprehensive policy which didn’t leave room for supplemental coverage) would mean that every one of these companies would go out of business…or at least shut down a major division of their operations in the cases of companies which also sell life/auto/homeowners/etc.
Gaba says that, in the long run, he has no problem with the ultimate shutdown of these companies, because he sees “the very concept of profit-based health insurance as troubling and unnecessary.”
At the same time, however, these are real people working for real companies, and very few of them are the Fat Cat Multi-Million Dollar CEOs that we all despise.
If the idea is that the federal government would hire these 500,000 people (that’s nationally; I assume it’s more like 50K or so in Texas specifically) to handle the government-run equivalent of their current job, that’s fine, but we’d better make sure to take that into consideration. What happens to multi-year legal contracts between these companies and the healthcare providers? What’s the economic impact of 160 companies being shut down in one state alone? How much transition time would be needed to do all of this? Then multiply that by 50.
Then we need to add in the political realities and the still-unanswered question of whether moving to Medicare for All would be more cost-effective/ less expensive, notes Gaba.
It’s not impossible, he says. But we have to factor in…
“…the sheer logistics and real-world impact that making this move would have. I simply see no way of it happening over the course of a few years even if all of the political and economic winds were all lined up perfectly for that entire period of time.”
That bit about putting all those health-insurance workers out of jobs is very compelling. It’s an argument that often gets lost in the political shuffle. I’m in full sympathy with Bernie Sanders’ desire to get the profit motive out of something that–as he said on Fox TV’s Town Hall last night–is a human right. But Sanders–and all of us who want Medicare for All–need to talk about it in a much more pragmatic way.