The Rx From "SiCKO:" More Choice

Truthout: By Dean Baker

The pundits are working overtime trying to defuse the message from 'SiCKO,' Michael Moore's new film. They are trying to convince the public that the United States could not possibly do what every other rich country (and even some not so rich countries) have managed to do: guarantee their people decent health care.

The centerpiece of the pundits' whine is that universal health care could not work here. They claim the systems which work in other countries require a larger roll for government in health care than Americans want. While this claim is contradicted by poll after poll on the topic, we don't have to argue with the pundits, rather pointless task in any case.

We can just give people a choice and let them vote with their feet. Suppose the government were to establish a Medicare-type program and open it up to all individuals and employers in the country. Those who already have insurance can switch to the government-run plan. Similarly, employers can switch to it as well. Individuals who do not already have insurance would have the option of buying in to the expanded Medicare plan as would employers who do not currently provide insurance for their workers. We can also have a system of expanded subsidies for health care for low and moderate income households, which will make health care insurance more affordable for those families.

This is more or less what both John Edwards and Barack Obama have proposed in their presidential campaigns. To get to universal coverage, there are important issues like mandating that individuals have health care insurance, and also questions about the revenue source for subsidies, but the key point is to establish a national Medicare-type insurance system that can get costs under control and eliminate the enormous waste in the private insurance system.

Medicare's administrative expenses are a small fraction of the administrative expenses of private insurers. Medicare uses just 2 percent of the money that flows through the system to cover administrative costs. By contrast, private insurers spend between 10 to 20 percent of their premiums to cover administrative costs. They use this money for marketing, high CEO salaries and dividends to shareholders; all expenses that Medicare does not have.

This is the reason Medicare always wipes the floor when it competes against private insurers on a level playing field.