The Public Option and the “Unequal Good” that Healthcare Is

Other than Trump, the biggest issue in the 2020 Democratic primary is healthcare. It’s talked about in every debate and it is consistently ranked at the very top of people’s issues for the Democratic primary. Moreover, it’s a proxy issue for general disruptiveness and progressiveness — the candidates that hold more disruptive views on healthcare hold more disruptive and progressive views on everything else. The candidates that hold less disruptive views on healthcare hold less disruptive and progressive views on everything else. Thus, healthcare is a perfect issue for grouping the Democrats into “camps,” which partially explains why debate moderators consistently ask about it. In my opinion, the two camps fundamentally differ on who to ration healthcare from: just the non-rich, or everyone, including the rich?

There are some trends evident in Democratic candidates’ proposed healthcare policies. Some believe in throwing the whole system away and making everyone have the same government health insurance plan (headlined by Sanders and Warren). Others believe it should be easy for those who don’t have health insurance or don’t like their health insurance (Buttigieg, Biden, Bloomberg) to get health insurance through a government plan, but don’t believe it is necessary to take anybody off their private health insurance. 

Here are the top five Democratic candidates by polling average, and where they generally stand on healthcare. To be clear, all of the candidates say they believe in universal healthcare coverage. However, they have different ideas on what that means and how to get there.

1. Vice President Joe Biden believes in a public option plan that anyone can opt into. His plan will also attempt to limit and reduce the amount people pay for their healthcare.

2. Senator Bernie Sanders believes in a single-payer system, essentially getting rid of private health insurance. The plan seeks to eliminate premiums, deductibles and copays for all Americans.

3. Senator Elizabeth Warren also supports a single-payer system that appears to be the same as Sanders’. It, too, essentially eliminates private health insurance and with it, premiums, deductibles and copays.  

4. Mayor Michael Bloomberg has little to no formal policy positions as of now. He has been critical of a single-payer system, calling it un-American, extreme and unaffordable. In one of the campaign videos he spent hundreds of millions spreading, he advocates for a system where “everyone without health insurance is guaranteed to get it, and everyone who likes theirs can go ahead and keep it.” His actual policy page on this issue is somewhat minimal, but it clearly states he wants a public option plan.

5. Mayor Pete Buttigieg believes in a public option. It, too, hopes to limit out-of-pocket expenses.

As you can see, there are basically only two ideas: 

1. Single-payer, where everyone is on the same public plan and private health insurance of all kinds, both employer-tied and not, is eliminated. All healthcare is free — no copays, premiums, or deductibles.

2. A public option, where people have the choice of keeping their private health insurance, or moving to a public plan.

Proponents of the second option, the centrists, don’t seem to believe their plans are philosophically different to the progressive proponents of the first opinion: after all, Biden said the public option is “the most rational way to get to universal coverage.” Buttigieg’s website states his public option plan “guarantee[s] universal coverage.” Bloomberg’s website states that his plan is “politically practical and achievable, working toward universal coverage…” If the public option helps get us to universal coverage and keeps private health insurance a thing (which they say 160 million people like), shouldn’t we do that? This is the centrists’ basic argument.

Here’s the problem: Nobody likes their private health insurance. At best, these 160 million Americans are okay with their private health insurance. The price they pay for care isn’t debilitating and going to the doctor and hearing that their insurance will cover most of it is a nice feeling. But would they rather pay slightly higher taxes (maybe even no additional taxes if they’re middle class) and have that healthcare be free? Quite possibly — satisfaction doesn’t mean perfection. If you ask me if I’m happy right now, I would say yes. That doesn’t mean nothing in my life can be improved. Similarly, just because 160 million Americans are ‘happy’ with their private health insurance doesn’t mean we can’t improve anything. Being happy about one thing doesn’t mean you won’t be happier about another thing, especially if that thing is better. Being happy with employer-tied private health insurance doesn’t mean you wouldn’t be happy with single-payer, or that private health insurance doesn’t have significant room for improvement.

There are severe downsides to employer-tied private health insurance. It keeps people in jobs that aren’t good for them, afraid to leave (to another job, to start a business, or to work part-time) because they’ll lose their health insurance and the healthcare it enables. This lack of labor flexibility not only makes people unhappy, but can also have adverse economic effects; labor flexibility is very important economically because it allows people the ability to find jobs that match them best, allowing workers to respond better to changes in the labor market — which we will likely experience as automation ramps up — and increase their productivity and contribution to the overall economy. Bad job matches are bad for people and bad for the economy, and employer-tied private health insurance sustains bad job matches.

So why do candidates like Biden and Buttigieg insist so many people are happy with their insurance? Is it not obviously true they would be happier if their physical wellbeing was not something their employers were a part of?

The truth is that there is a more philosophical disagreement. The centrists don’t really believe that 160 million Americans are happy to know that if they’re unemployed for some reason and get cancer, there’s a 42% chance they’ll have no life savings in two years. The centrists also know employer-tied health insurance is socially and economically bad. They aren’t dumb. But they support a public option because it keeps healthcare the way it is — as a great example of what I’ll be calling an “unequal good.”

There are basically two types of goods in America. Equal goods and unequal goods. Here they are quickly defined:

Equal goods are those aspects of life that our society has decided should be equal for the rich and for the poor. Take the DMV. Rich people have to wait in line like everyone else. They also have to take the same driving test as everyone else, with the same proctors. There is no special DMV for the rich.

Unequal goods are those aspects of life that our society has decided should be better for the rich and worse for the poor. These are most things: cars, food, homes, etc. Rich people get better houses, better cars and better food not because someone assessed them to be good people or anything, but because they’re rich.

Capitalism works if people seek money. If nobody cares at all about money, capitalism cannot succeed, and people only care about money if it comes with good things. Without unequal goods, people would have no reason to seek more money than is necessary for survival. If you could have all the money in the world, but not be able to have a better house in a better neighborhood, or a better car or more delicious food, you just wouldn’t become rich. Unequal goods are, therefore, essential to any even somewhat capitalist society. However, in the case of most unequal goods, we would like to see the poor also have a serviceable version of that good. In transportation for example, I think most people are ok with the system of private transportation where rich people spend hundreds of thousands of dollars on cars, plane rides, maybe even a private plane to travel to cool destinations. However, people also want to see a good and cheap public transportation system so the masses can get to their jobs. Just because something is an unequal good doesn’t mean the poor have to get a terrible version of it or no version at all. 

Equal goods are just as essential as unequal goods, in most of our eyes. We think there’s fundamentally something wrong if we find out rich people have it better at literally everything. If we found out the rich could bribe a guy at the DMV to get to the front of the line, or to get their license, we would be quite annoyed.

Thus, the real question on healthcare is, “Should healthcare be an unequal good or should it be an equal good?”

I believe the centrists have selected the public option because they want healthcare to be an “unequal good.” This is because according to Medicare-for-all critics, single-payer healthcare would lead to supply issues where there aren’t enough good healthcare providers to go around, or a rationing of care issue, where the government doesn’t have the money to pay for everyone’s healthcare expenses even if there is enough care.

The first issue, undersupply of care, would manifest itself in wait times. Republicans cite this fear frequently. Evidence from Canada suggests that wait times can be unreasonably long, to a level that is unhealthy for suffering patients. Progressives like Sanders deny that this is an issue for anything that requires immediate care.

The second issue, monetary rationing of care, would manifest itself in people being denied care because the government can’t pay for it. The mechanism for this is that the government could be facing a massive increase in expenditure and impending doom-by-deficit and would be forced to start refusing to pay for some procedures, thus preventing them from happening. This basic situation happened in Arizona, where a person on Medicaid was denied a bone marrow transplant because the government was running a huge deficit and didn’t think it could pay for the treatment. 

This care rationing also frequently takes place without the government’s involvement. Our country’s market rations healthcare by price — if you can’t pay or have your insurance pay, you will often not get care, unless it’s life-saving. 45,000 people a year die this way, from lack of healthcare coverage. Rationing care by price is appropriate if you believe healthcare should be an unequal good. If you believe healthcare should be an equal good, you would support rationing based on something else — maybe how old the person is or how likely they are to die without the treatment. Or you would believe in never rationing — but healthcare costs would surely balloon once people find out all of their possible healthcare wants will always be satisfied at no cost to them. Most progressives don’t talk about this though. They don’t want to believe there will ever need to be healthcare rationing. While I’m not sure I agree no rationing of any kind will ever occur in a Medicare for All system, it is true that America has found the money for other things that don’t seem affordable either: just recently, Trump announced the military had spent 2 trillion dollars defending us against a war the president decided to nearly start. 

For what it’s worth, there is also a third option beyond single payer and the current system of mostly employer-tied private health insurance (which public option preserves). In this third scenario, everyone would start with government health insurance but anyone could personally opt out and buy private health insurance if they’d like. Employer-tied private insurance would be unnecessary and would cease to exist, but many people would elect to have private health insurance if they could afford it. This lack of employer-tied health insurance would increase labor flexibility hugely, but this scenario wouldn’t force everyone to have the same government plan. There would be a gap between rich and poor (healthcare would be an “unequal good”), but the economically and socially harmful situation of employer-tied health insurance would be avoided. There would need to be a big enough pool of rich people with diverse health situations who would buy it so that the health insurance companies could have a balanced pool, but there are more than enough rich people. After all, the top 1% is a whole one percent — 3.2 million people sick, healthy and everywhere in between. This third scenario would be possible, but it would be quite disruptive (as would single-payer) in the United States; temporarily, all the private insurance companies would lose all of their corporate customers. And again, there might still be rationing of care, but in this scenario the rich’s care would be safe. To be clear, many healthcare systems work like this, like Australia’s (basically), where everyone is given public health insurance, but the rich are expected to still buy private insurance.

To summarize, proponents of single-payer healthcare believe that in a shortage of care or of money, which may happen, everyone should be treated equally, the same way everyone is treated equally when there’s a shortage of DMV attendants (which there always is). Centrists propose the less disruptive public option because they believe that in a shortage of care or money, the rich should be exempt from feeling the effects of this shortage.

This way of thinking about the healthcare debate isn’t intended to make people progressives, nor is it intended to make people centrists. It isn’t even to make people proponents of the third option I brought up that would keep healthcare an unequal good but get rid of employer-tied insurance. Rather, I offer this rhetorical framework of equal and unequal goods to help understand the healthcare debate and what both sides are really fighting about: who will be denied care in a shortage?

The progressives have some steps to fix shortages of care, but they don’t really address the actual possibility of a supply of care issue. But if one were to happen, care would be denied or waited for in a way unrelated to wealth, maybe favoring instead prioritization by age or direness of the situation. The centrists don’t believe in a shortage either — they think the care is there and the money is there if you let corporations pay for roughly half of Americans’ health insurance as they currently do for most of the 160 million insured, although not very well since 43% of Americans with health insurance still have had costs that limit their treatment. 

Both sides deny a shortage in their plans. Yet the key difference in their plans is what exactly to do in one: ration from only the non-rich or ration from everyone?