Karl Marx and American Health Care
As the Germans and French have shown, a 'public option' for health insurance needn't give government a socialistic monopoly.
One tenet of 20th-century Marxism held that corporations, left to their own devices, would grow and merge until there was just one big corporation left on a given field — a monopoly, run by the whims of some chuckling private baron. Socialist writers — from Vladimir Lenin to Edward Bellamy — said OK, form the monopoly, but let government run things; hand control to the people.
By now we can all agree that Karl Marx and his most fervent disciples are dead; even this year's wave of bank and auto industry semi-nationalization in America had little to do with old-school socialists. But arguments about health care in the United States this year have witnessed insurance companies and their champions in Congress accusing the White House of socialism — while sounding like socialists themselves.
"[When] you got the government competing with private enterprise," Alabama Sen. Richard Shelby said, "with all the incentives the government has and the power, they can destroy the marketplace for health care." A public plan would ruin competition, went the argument; it would clear the field and leave nothing but a sluggish government health monopoly in place.
Germany — where Marx was born — has a health care system that roughly resembles the plan Congress and President Obama have set out to forge. But insurance companies haven't been driven out of business. In fact, they thrive here because of a law that says every German must be insured, and there are a number of "public" options to choose from. This isn't Britain's monolithic National Health. It's a complicated mix of private, for-profit and nonprofit schemes with different degrees of government intervention, which makes finding the right insurance feel like choosing the right color of Kleenex at Safeway.
Most of the 250-odd plans are called gesetzliche Krankenkassen, or state sickness funds. None of them is truly state run. What they are is heavily regulated. The government sets basic health care standards and premiums for everyone. It collects the premiums based on income but doles out a different amount to each citizen's chosen health care provider, using the sort of risk-calculating details familiar to every American insurance customer, like age and medical history. The government has centralized the money and overall risk, in other words, but not the day-to-day management of health care.
The result is a nonprofit system that doesn't bounce patients for pre-existing conditions. The premium paid to the national pool by a citizen works like a flat income tax, shadowing salary with a dull predictability, but the money paid by the government to the sickness fund will be more for a cancer patient than for a healthy 25-year-old.
It works pretty well. The rigid monthly costs are high — 15 percent of income, split by employer and employee — but on average they're lower than American payments, partly because a German spouse and kids win automatic coverage once a single wage earner pays into the system. Kids, in fact, never lack health care. They're covered by general tax revenue to guarantee a hale new generation of Germans.
This heavily regulated national arrangement is for anyone earning under €48,000 a year ($66,000). The 20 percent of Germans who make more can buy American-style "private" insurance, with premiums tied to individual risk. Only one-fourth of them bother to leave the public scheme.
Doctors in the system grumble about their pay, and Germans mutter about rising co-payments, terrible hospital food and an erosion of preventive services. But when you need treatment in Germany, it's there. No one gets turned away from the emergency room or dumped by taxi at the door of some downtown hospital, and the quality of treatment, at least in big cities, is world class.
The French system also has a real public option for insurance — it's called the Sécurité Nationale — but here again, doctors and hospitals remain private. The French like to be choosy, and they sneer at Britain's closed National Health as "socialism."
So the system debated by Congress this fall, whatever form it takes, will probably not be a wretched child of Karl Marx. Government can play a subtler role, from the citizen's point of view, nationalizing payments and risk but keeping insurers and health care providers in the mix. In this style of reform, doctor salaries and pharmaceutical profits might be casualties, of course. And the level of back-office regulation could make our mighty insurance providers squeal. But a public option is neither a cure-all nor a Soviet anachronism, and the rise of a government health monopoly to the distant tune of the Internationale is far from imminent on American shores.
Contact Michael Scott Moore at: firstname.lastname@example.org.
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