Definitions for a Discussion of Univeral Healthcare

Universal healthcare is going to be a political issue again under the Biden administration and probably will be for the foreseeable future.

Before anyone talks about healthcare, they should define their terms. I define healthcare as the large system that is supposed to deliver actual care related to health. This care is usually delivered by health professional like physicians, nurses, therapists and others.

Healthcare is about insurance, Medicaid and Medicare, hospital systems, health economists, policy-makers and so on.

Providing health care is complicated, but the systems of healthcare are complex, in a technical sense.

Universal healthcare is a system where nobody goes without some form of coverage. One way of accomplishing this is single payer. Paradoxically in the US, people are talking about multiple single payers; one for the military and the VA, one or the poor, perhaps one for the elderly, although expansion of Medicare or Medicaid to the general public is one way to achieve a large single payer that coves the majority of Americans. That’s where “Medicare for All” comes in. What most people mean by single payer is the elimination of health plans and other middle men who finance health care. Some people refer to single payer as a true one payer for the entire country, much along the line of the French system.

I define insurance as an agreement with a private or public entity that protects against financial catastrophe by assuring compensation for losses in return for a premium. In the US, we cannot speak of health insurance since it has become a financing mechanism for every virtually type of care, no matter the cost. What we call health insurance is merely a mechanism, for funding care. Low price services are covered which makes them more expensive and raise premiums. The administrative cost is high; think of $20 to get the average claim out, compared to a $20 brace. Now it’s a $40 brace.

It is better to talk of these as health plans, which are prepaid based on an actuarial estimate of total annual expenditures for a given individual or group of individuals. The premium is set at about 1/3 above the average (technically 1 standard deviation above the mean.) This means the insurance company will win two years about of three, There are a lot of ways to maniputale this estimate and the set price of a premium.

Some people, myself included, refer to universal access to health care. To me this implies that everyone can get to a doctor. Some may have to pay, if they can afford it, but there would be financial support and resources for those who could not. The level of support would depend on income and the potential cost of a specific treatment. But here we are getting ahead of ourselves. Universal access implies some sort of blend of true insurance with out-of-pocket expenditures.

Now that we’ve defined our terms, we can then talk about the pros and cons of single payer. That will be the subject of the next post.