Why “Berniecare” Won’t Work

DUSSELDORF – You cannot get better health care anywhere in the world than in the United States – that is, if you can afford it. And, faced with what is by far the most expensive health-care system in the world, affording it is no small feat. Indeed, US health-care spending, half of which is private, will reach $10,651 per capita this year alone, the equivalent of 18.4% of GDP. Despite the progress that President Barack Obama’s Affordable Care Act – so-called “Obamacare” – has made in expanding health-insurance coverage, many Americans still lack sufficient access to modern diagnostics and treatment.

Bernie Sanders, the Vermont senator, made this a central plank of his campaign for the US presidency, and seems certain to keep pushing the idea on Hillary Clinton, now the Democratic Party’s likely nominee. Unfortunately, while the appeal of his proposal for universal mandatory health insurance – or “Medicare for all” – is certainly understandable, his plan is not economically convincing.

In all modern countries, the provision and financing of basic health care are, to some extent, excluded from private market mechanisms. After all, if medical services are allocated via private markets, their provision will be based on a patient’s economic capacity, not his or her medical needs. That conflicts with globally accepted fundamental ideas of justice.

But, in the US, that market exemption is very limited. Indeed, the US stands out among its developed-country peers in the extent to which the quality of health care depends on a patient’s personal financial solvency. That is what Sanders wants to change, by introducing a single, compulsory, and tax-funded insurance plan that would provide all US residents with the same access to basic health care.