Health Insurance: The Good, The Bad, The Ugly

Every day, whether you switch on the TV, open social media, or scroll through the news, it’s likely something comes up about politics. And when it comes to political debates and disagreements, one topic is standout: health insurance. If you watched the recent Democratic Debates, you may have almost gotten sick of hearing almost an hour of back-and-forth arguing without understanding some things they were saying on the issue. The mere mention of the phrase can immediately make people cower in fear, and that’s understandable. In fact, 96% of people don’t even understand 4 basic health insurance terms. But in a time where the debate on health care becomes a top priority, it’s important to get a good understanding of what’s going on and determine for yourself where you should stand. Below is a simple guide to major health care proposals that hopefully will get you on track to formulating your opinions! (For extra information on understanding terms, definitions, etc., click here to see Policygenius’s helpful Glossary on Health Insurance Definitions so you can keep up with the vocabulary often thrown around by politicians, from “deductible” to “co-payment.” This article won’t focus too much on specifics, but further research is encouraged for such a complex issue).

100% Private Health Insurance

The private sector largely dominates the current insurance system in the U.S. Private health insurance works like any other private service. A customer will pay the insurer to cover them for health care costs. This payment is called a premium. Premiums are paid monthly to an insurer. When an instance occurs where the customer has to pay health care costs, the insurer will either pay for those costs or partially cover them (leaving the customer to pay the rest out-of-pocket). Different insurers have different premiums. Oftentimes, the higher the premium paid, the more coverage is offered.

The Good: So, what would the benefits of having only private health insurance be? Proponents of a free market argue that private health insurers would compete to lower their premiums and offer quality coverage at the same time. In this sense, premiums will vary and become affordable for the lower class, while higher premiums will yield better coverage for those who can afford it.

The Bad: The free market doesn’t seem to be self-correcting in this scenario, however. That’s because health care premiums have only drastically risen in the last few years, and it doesn’t seem to be stopping.

Where The Debate Gets Ugly: Economic Libertarians love to take the free-market approach and want to scrap all government plans and just allow the private sector to do its thing. Conservatives lean toward this proposal but often support an idea to repeal government-run Medicare and replace it with something to still help those who can’t afford to pay their premiums. Democrats are most likely to reject the idea, arguing that government intervention is necessary at the point that people can’t afford insurance. Meanwhile, Switzerland (which is commonly known to have the best health care system in the world) proves them wrong, a country that regulates companies and subsidizes the poor to afford coverage, leaving everyone with care while maintaining only private insurance...

The Current Implementation (ACA and Medicare)

The system in place in America right now has two key features in addition to the private sector: Medicare and the Affordable Care Act (ACA). Medicare is a government-run health insurance program available to people above the age of 65. The ACA essentially provides money to people who can’t afford health insurance and allows people below a certain income bracket to use Medicaid, a state-run program.

The Good: The ACA requires insurers to cover basic necessities, gives poor people more money to afford their insurance, and slows the rise of health care costs by making care more accessible.

The Bad: Unfortunately, nothing in life is free. To implement the program, Obama had to raise taxes for everyone, including those who aren’t even included in the program. Employers also kicked many people off of their employment-based insurance. In response to the ACA, other costs and services saw price hikes in the short-term, which you can read about here.

Where The Debate Gets Ugly: Republicans actually helped to craft Obamacare with Democrats, and a few moderate conservatives have even voted against repealing certain parts of it in the past. However, it seems that neither side is very satisfied with the current implementation of the ACA at the moment. There’s a conservative push to replace it with a cheaper, less regulated system, and a liberal push to make Medicare more accessible to everyone. Joe Biden is one of the few candidates for the presidency that stated that he at least wants to strengthen the ACA (unclear as to what that means) if he can’t get his plan passed, but every major Democrat seems to want to go further…

A Public Option (It Varies)

Perhaps the favorite of moderate Democrats, the Public Option concept is quite simple: a government-run program that serves as an alternative to private health insurance. While it sounds straightforward, many politicians have taken liberties with their own health care plans which roughly resemble this concept. For example, some may want the public option to be run like a private provider, while some vouch for it to be a taxpayer-funded right of citizenship for those who want it. Nevertheless, the main goal is for economic competition between the government and the private sector.

The Good: Multiple studies find that the implementation of a traditional public option would lower premiums across the board because of market competition. Ideally, the government coverage would be consistent and wouldn’t prioritize profit over people, thus gaining popularity; in response, it would be expected of the private sector to lower their prices and reel in more customers.

The Bad: It’s clear that a public option would draw upon more spending by the government, making fiscal conservatives bawl their eyes out. Unfortunately, not all calculations and numbers centering around the concept of this plan may be helpful, simply due to how many variations there are in theory. With multiple health care plans out there that blur its true meaning and candidates who make provisions and exceptions, it’s hard to determine the true impact. The only oppositions come when conservatives simply don't want a larger taxpayer-funded system or when progressives say a public option doesn't go far enough.

Where The Debate Gets Ugly: In the Second Democratic Debates, health care was the biggest focus of all issues. Those who weren’t advocating for single-payer health care were most likely championing their own plan which consisted of a government-run plan. John Delaney’s plan, BetterCare, enrolls everyone in his plan from birth unless they wish to opt out and choose private insurance. Beto O’Rourke seems to mostly agree. Joe Biden’s is a little more traditional, wanting it run like any other company, but offers it premium-free for low-income earners. Clearly, there is variation, but any of these ideas is enough to make the average fiscal conservative cower in fear; all require a lot more federal spending.

The Concept of Universal Coverage (It Also Varies)

The term "universal health care" is thrown around lightly in the U.S, and most equate it to a single-payer system; however, universal coverage can come in many forms. Simply put, universal health care refers to a system where every person has health insurance. Something everyone can agree upon is that the majority of people should have health coverage, but the Left and Right split on achieving that goal. Some may point to Switzerland, which requires all citizens to have private health insurance, with no government-run plan for health-insurance. Others point to many other developed countries which have one system funded by taxpayer money. It’s important to understand these distinctions.

The Good: Countries with universal health care most often outpace the United States in quality of care. Universal health coverage ensures that no one is left without care, and can save money for the U.S, seeing as it spends 17.9% of its GDP on health care, the highest in the world.

The Bad: No matter what the system, there will always be difficulties. Funding often can cause problems in a plethora of scenarios, whether it be for subsidization or providing free care. Not only that, the more a government has on its plate, the more inefficiency that arises, ultimately making it harder to attain universal coverage from the position of the U.S. And once again, government spending turns off fiscal conservatives.

Where The Debate Gets Ugly: So many health care plans from Democrats are labeled as “universal” that it’s hard to keep track of what’s what. More of the progressive politicians we see today often advocate for universal coverage of some sort but disagree on how to get there. All of this can get in the way of getting legislation passed from both sides of the aisle, and only contributes to government inefficiency. On the other hand, conservatives avoid the term since it evokes thoughts of bigger government, even though that's not necessarily the case.

Single-Payer (You Guessed It: It Varies)

Single-payer health care dominates the current health care debate in America because it poses the most radical change that could be implemented. Progressive Democrats and Democratic-Socialists want the government to take the majority of the burden and make health insurance run by the government. It would be solely-funded by taxpayer money, meaning that premiums and other costs are not an issue. The main variation comes around as to whether or not we should abolish private health insurance entirely.

The Good: The immediate reaction of the Right is to complain about cost; however, the net change in how much Americans actually pay for their health care would decrease in comparison to right now, which surprisingly is according to research done by the fiscally conservative Mercatus Center. Americans would see a rise in their taxes, but in return would lose less money overall since they don’t have to pay for private health care costs. Also promised by many advocates is full coverage for all expenses, meaning that there would be no additional payments needed by patients at all. (Also a plus, single-payer health care ensures universal coverage.)

The Bad: While Bernie Sanders loves to say “free health care,” we need to go back to the old phrase that “Nothing in life is free.” Of course, Sanders has made it clear that taxes would need to be raised, but it may frighten some to look at the suggested rates in his income tax plan alone. Not only that, but if Medicare-for-All were to indeed fully cover every American citizen, then costs may be even higher than what some predictions and studies would tend to suggest, and could rise more if administrative costs were not to decrease like progressives would like to suggest. Another point made by critics is that the government-run plan would be heavily inefficient, seeing as single-payer has never been tried by a country as large as the United States.

Where The Debate Gets Ugly: Most Americans happen to rate their health care quite positively, and this can cause Democrats to split on where to draw the line. Andrew Yang supports Medicare-for-all but is not in favor of an outright abolishment of private health insurance, simply to keep the same health innovations in the status quo that healthcare markets provide. Kamala Harris’s plan allows private health insurers to survive for ten years before a full transition to Medicare-for-all. Bernie Sanders and Elizabeth Warren, however, claim that a majority of Americans do not like their health insurance (though polling would show otherwise), therefore meaning that private health insurance should be made illegal. Many Democratic candidates fear such radical change, claiming that it's unnecessary to go this far to ensure universal coverage. If a single-payer system were to truly take place, however, it would require major support from the party and would need a detailed and structured plan. This by far would be the biggest structural change of all insurance policies mentioned and could end up being one of the most lasting.

The Takeaway:

So, what should the objective determining factors be? You should weigh your decisions on what would help the majority of Americans, so:

1. Look into what is the most cost-effective across the board

2. Find the plan which can be the most simple and eliminate inefficiency

3. Determine which plans provide the best quality of care

So make the decision! These were some simplified explanations of pros, cons, and potential political scenarios as a starting point for you to do selective research on such a complex topic. Hopefully, you now have a better understanding of what you want to fight for, so go out and fight for it!