Commentary: Canada’s Health Care Is Abysmal. Why Would We Copy It?

By April 30, 2018Health Insurance

By SALLY C. PIPES

April 26, 2018

Americans have come down with single-payer fever. A whole 59% now back a national health plan, according to a March 2018 Kaiser Health Tracking Poll—way up from the 33% reported by the Pew Research Center in summer 2017.

But the American people don’t really understand what supporting a single-payer plan means. For instance, in October 2017, 47% believed they’d be able to keep their current health coverage if a single-payer plan were put into place, according to Kaiser.

They’re sorely mistaken. Bills that would launch a government takeover of the country’s health care sector are meandering through Congress and numerous statehouses across the country. Those measures would outlaw private insurance within a matter of years. If any of them pass, Americans will find themselves paying sky-high taxes for access—not to care but to a waiting list.

Take Sen. Bernie Sanders’s Medicare for All proposal. Over the course of four years, it would systematically pryBernie Sanders people away from their current coverage arrangements—employer-sponsored insurance, individual-market coverage, Medicare, and Medicaid—and dump them all in a government-run plan. Companion legislation spearheaded by Rep. Keith Ellison in the House would do the same.

The Center for American Progress’s recently released Medicare Extra for All plan would nudge people into single-payer more gradually. Medicaid beneficiaries, the uninsured, and people with coverage through Obamacare’s exchanges would be first. Newborns and seniors turning 65 would soon follow suit.

The proposal also claims to allow Americans to keep their employer-sponsored coverage. But it offers employers incentives to move their workers into Medicare Extra. The end result, after a decade or so, would be single-payer.

Earlier this month, Democratic senators introduced the Choose Medicare Act, a bill that would allow individuals and employers to buy into Medicare rather than purchasing coverage from a private insurer.

As long as there’s a Republican in the White House, these proposals have little chance of becoming law; consequently, many state legislators are taking matters into their own hands. The California Senate approved a single-payer bill last June. It has since stalled in the Assembly, thanks in large part to the absence of a plan to pay for it. But progressive activists, led by the California Nurses Association, have continued to pressure the Assembly speaker to act on the bill. The New York Assembly green-lit a single-payer plan last year, but it never made it out of the State Senate.

Rhode Island, Washington state, New Hampshire, and Massachusetts are all in various states of exploring how they might implement single-payer within their borders.

They’ll quickly find that it’s financially impossible. California’s Senate Appropriations Committee estimates that single-payer would cost $400 billion per year—roughly twice the state’s entire budget. New York’s plan would increase state health spending by more than $87 billion in 2019 and require nearly $226 billion in tax increases, according to the Foundation for Research on Equal Opportunity.

Sanders’s Medicare for All plan makes these state initiatives look cheap by comparison. According to the Urban Institute, his reform package would cost $3.2 trillion a year. Proposed financing options include new payroll and individual income taxes of 7.5% and 4%, respectively—all on top of existing taxes.

Single-payer wouldn’t merely harm Americans’ financial well-being—it would jeopardize their physical health.

When patients face no out-of-pocket costs at the doctor’s office or hospitals, they have no incentive to moderate their consumption of care or seek lower-cost providers. The only way for governments to control spending is to ration the supply of care.

Consider how things work north of the border. Canada effectively outlaws private insurance for medically necessary services—just as the Sanders plan would. Patients must wait months for routine procedures—a median of more than 21 weeks for treatment from a specialist after referral from a general practitioner.

These long waits aren’t due to a lack of funding. The cost of health insurance for the average Canadian family jumped 174% over the past two decades—nearly twice as fast as incomes and four times the rate of inflation.

Canadians are fed up with their “free” health care. Three in four believe they should have the right to pay for care privately if the wait they’re facing is longer than clinically recommended.

Sanders and his progressive allies are working toward a revolution in the opposite direction. But it’s odd that they’re looking to mimic Canada’s single-payer model just as a strong majority of Canadians want to end their government’s ban on private insurance and permit more private options for care.

Americans’ burgeoning support for Medicare for All will quickly fade when patients learn that the government will confiscate their current health plans and force them to wait in line for care—and then charge them exorbitantly high taxes for the pleasure.

Sally C. Pipes is the president, CEO, and Thomas W. Smith fellow in health care policy at the Pacific Research Institute. Her latest book is The False Promise of Single-payer Health Care. Follow her on Twitter.