Single-Payer Is Less Appealing When it Comes With a Price Tag

Progressive lawmakers in California eagerly unveiled a plan for a state-run single-payer healthcare system, only to find that paying for it would require the state to more than double its tax burden (and that’s before the bureaucratic bloat and cost inflation kicks in). The San Francisco Chronicle reports:

Creating a single-payer health care system in California would cost $400 billion a year — including $200 billion in new tax revenue, according to an analysis of legislation released Monday by the Senate Appropriations Committee.

The projected cost far surpasses the annual state budget of $180 billion, and skeptics of the bill say the price tag is “a nonstarter.”

Yes, that’s right: A state-run insurance system would cost more than California spends on all other public services—education, police, pensions, and more—combined. The fiscal forecasts for New York’s proposed single-payer system are similar.

The GOP House’s haphazard efforts to repeal Obamacare would leave so many people without health insurance that they seem like political suicide. Meanwhile, the progressive approach to healthcare—steadily increasing subsidies on the way to single-payer—will crash against the reality of constrained public budgets.

Both visions run up against the same problem: Whether insurance is bought by private individuals or paid for by the government, healthcare simply costs too much. In the short run, we can argue about exactly how much insurance should be subsidized; in the long-run, the only way out of this trap is to find sustainable ways to bring down the price of delivery, whether through expanded federally-funded research initiatives, regulatory changes, targeted immigration policies, or tort reform. (And stay tuned for the two headline pieces in our upcoming print issue on this subject—online later this week.)

America is stuck in a bitter and seemingly-endless tug-of-war about who should pay for health insurance. But no matter who wins, America won’t be that much better off unless we can find a way to make care cheaper altogether.