Anyone wondering how it might function need look no further than Medicare, which runs all senior health care in this country. It’s arguably the most popular government program in America and one of the more cost-effective.
Start with the cost of administration. Medicare’s ranges between 2 and 5 percent of its budget. For private insurance, the average is 12 percent. The Government Accountability Office once estimated that this simple savings alone would be “more than enough to offset the expense of universal coverage.”
Moreover, a single provider would have the size to negotiate better prices from providers and pharmaceutical companies. According to a New England Journal of Medicine study, this would save $400 billion more — and provide a boon for American business, reducing labor costs by 10 to 12 percent.
A CBS poll found that 59 percent of the public favored a government health plan, but insurers treat single-payer like Israelis do the Palestinians: as a threat to their very existence. So the industry set out to ensure that such a program never saw the light of day.
“Of course they don’t want it,” Robert Reich, a former secretary of labor in the Clinton administration, wrote in a 2009 opinion piece. “A public option would squeeze their profits and force them to undertake major reforms. That’s the whole point.”