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What Bernie Sanders Gets Wrong About Healthcare

Ever since Bernie Sanders became a nationally known figure during the 2016 Democratic primary race, his proposal to bring European-style publicly-provided universal healthcare to the US has become firmly entrenched in the country’s political mainstream. Sometimes called “single-payer healthcare,” the idea is to take private healthcare companies out of the equation and have the government directly pay healthcare costs. The most simple way of doing this, of which Sanders is a strong advocate, is to expand Medicare – which provides public healthcare to over-65s – to everyone, regardless of age. Other candidates in the 2020 Democratic Party primary have latched on to this “Medicare-for-all” proposal and support for it has become something of an acid test to gauge their progressive credentials. Elizabeth Warren, Kamala Harris and Tulsi Gabbard have pledged their backing, though in spite of their best efforts, the policy remains most closely associated with Sanders and his brand of democratic socialism (more accurately described as social democracy.)

But for someone who has been such a champion of the issue for so many years, it is remarkable how Sanders occasionally demonstrates considerable misunderstanding of its intricacies, and in doing so, plays straight into the hands of his right-wing and centrist opponents. The latest example of this happened during the July 30 Democratic primary debate. Host Jake Tapper asked Sanders about whether the proposal would require an increase in taxes. Just days earlier, Tapper had put the same question to Sanders during a one-on-one interview aired on CNN on July 28. Tapper played a clip of fellow Democratic Party primary candidate Joe Biden. In the video, Biden says that his opponents who say they can implement Medicare-for-all without raising taxes on the middle class are living in a “fantasy world.”

On both occasions, Sanders’ response started off well. He pointed out that under Medicare-for-all, people would no longer need to pay premiums, copayments or deductibles – as is the case already in Canada. And on stage at the Democratic Party debate, he pointed out that the whole we will need to raise taxes issue is merely a Republican talking point. But during the one-on-one interview with Tapper, in particular, he made a serious blunder in conceding this exact talking point. He said: “But I do believe that, in a progressive way, people will have to pay taxes. The wealthy will obviously pay the lion’s share of those taxes.” Sadly, here he taking the bait of the Republicans, and also establishment Democrats, who wish to fearmonger about the prospect of higher taxes under a Medicare-for-all system. The reality is that there is good reason to believe that taxes will not need to be raised at all.

For one thing, by taking the private healthcare companies out of the equation, the huge, wasteful costs of the current system would also be eliminated. The US private healthcare industry has become a monolithic, paper-pushing bureaucracy. A 2014 peer-reviewed scientific report authored by Dr. Aliya Jiwani of Harvard Medical School and three other leading academics in the field, for instance, found that transitioning the US to a public healthcare system would save $375 billion in paperwork alone.

But moreover, the need to pay shareholders, CEOs and board members of these private health insurance companies has created an even bigger overhead that would be dispensed with by such a transition. The remuneration for the CEOs of these companies, in particular, matches the obscene salaries paid to similarly large corporations in the modern era. Between 2010 and 2017, for instance, the top 70 CEOs of the major healthcare companies together earned just under $10 billion.

As a result of this wastefulness and inefficiency, the US spends about twice as much on healthcare as similarly developed countries in Western Europe. Public provision would eliminate the need for the private insurance companies to exist, meaning no more capitalist profiteering by CEOs and shareholders. This explains why the likes of Michael Bloomberg so vociferously oppose reform toward public provision. It is exactly the capitalist class that he has dutifully represented throughout his political career who profit from the status quo via shares and dividend payments. So again, far from making healthcare more expensive, public provision would make it much cheaper, which in all likelihood would obviate the need to raise taxes at all. Sanders made a huge blunder in not raising this point, instead conceding a major falsehood that benefits the Republicans’ and establishment Democrats’ pro-status quo narrative.

Sadly, this is not the first time that Sanders has flubbed a question on healthcare. In February 2017, shortly after Trump had won the presidency, Sanders held a town hall debate with Republican Senator Ted Cruz in which they took questions from the audience. One question came from LeRonda Hunter, a middle-aged women from Fort Worth, Texas, who owns several hair salons. In her question, Hunter spoke of how she could not expand her business because, under the provisions of the Affordable Care Act (ACA – known colloquially as “Obamacare”), businesses with more than 50 employees must provide health insurance to all their workers. She asked: “How do I grow my business? How do I employ more Americans without either raising the prices to my customers or lowering wages to my employees?”

Foolishly, Sanders responded with this: “Let me give you an answer you will not be happy with. And that is, I think that for businesses that employ 50 people or more, given the nature of our dysfunctional healthcare system right now where most people do get their health insurance through the places that they work, I’m sorry, I think that in America today everybody should have healthcare. And if you have more than 50 people… I’m afraid to tell you, I think you will have to provide healthcare.”

This was a disastrous response on several levels. The correct answer would have been to point out that under a Medicare-for-all-type system, the problem she faces would never arise in the first place. This is because the burden of providing access to healthcare would be assumed by the government rather than businesses themselves. Medicare-for-all would actually unencumber businesses from the non-wage labor costs that so many businesses – particularly small businesses – struggle to cover. Sanders’ answer completely failed to point this out.

He furthermore failed to mention that it is, in fact, the Republican/establishment Democrat insistence that the US keep its privatized system that prevents Hunter’s business from growing. Under Medicare-for-all, she would actually be in a better position to hire more people and expand her business because, again, she would be responsible just for paying her employees’ wages. In reality, the status quo private system overwhelmingly benefits large corporations at the expense of smaller businesses. By failing to make this point, Sanders again handed a gift to the Republican narrative by making his proposal out to be anti-small business when it is, in fact, the opposite. Naturally, his debate opponent Ted Cruz seized on his answer with glee to propagandize against public provision, making out that the Republicans are the champions of small businesses, while the progressives like Sanders are anti-business job-killers.

As if Sanders hadn’t made enough of a mess of things, he then kept digging. Understandably unsatisfied with his answer, Hunter pushed him, asking: “My question is how do I do that [provide healthcare to my employees] without raising my prices or lowering wages to my employees?” Sanders answered: “My guess is, one of the problems that we have is that maybe [there is] somebody else in Fort Worth who is providing decent health insurance to their employees. And they are in an unfair competitive situation regarding you. You can compete and maybe charge lower prices, get business, while they, on the other hand, may be providing decent health insurance.”

This again was a disastrous response. Here, he is accepting as a major premise the very kind of race to the bottom logic that forms the intellectual underpinnings of the “free” market ideology of the Republicans and establishment Democrats. According to this worldview, it is perfectly reasonable for certain employees in certain industries to go without health insurance if the profit and revenue levels of the companies they work for can’t provide it on the private market. It is a sort of employer version of the beggar thy neighbor mentality in which the market should rule supreme over all spheres of life, regardless of the consequences. Again, instead of tacitly accepting the premise that there should be a situation in which employers can race each other to the bottom in this manner, he should have simply pointed out that Medicare-for-all would do away with this situation by creating a level playing field in which employers would only be responsible for paying wages.

In the age of Trump, there is a further level of irony to this exchange, because Medicare-for-all actually makes a great deal of sense even according the logic of Donald Trump’s economic nationalist ideology. After all, it’s hard to stay competitive on the global market when businesses are burdened with paying their employees’ healthcare costs – and indeed, many European businesses are reticent to set up subsidiaries in the US for exactly this reason. This reality has been one of the major contributory factors in the deindustrialization and outsourcing phenomenon that has decimated US manufacturing and other traditional industries in the Rust Belt and elsewhere throughout the country.

Sanders also missed a major opportunity to criticize the ACA. The issue was one of the major distinguishing features between him and Hillary Clinton during the 2016 primary race, with Clinton arguing for improving and building upon it and Sanders arguing for transcending it via a full Medicare-for-all system. The ACA has been a catastrophic failure on two levels. First, it failed to challenge, let alone overturn, the power of the private insurance companies. In some respects, it represented a hand-out to them. At best, it could be described as a cosmetic measure that imposed superficial restraints, such as banning the refusal of coverage due to pre-existing conditions. Secondly, the ACA handed a huge propaganda victory to the Republicans. Ironically, the ACA was actually based in large part on what the Republican leadership in the Senate had themselves offered in 1993 as a more “free” market alternative to the proposal developed by Hillary Clinton during the presidency of her husband – known as the Health Equity and Access Reform Today (HEART). Furthermore, some of the ACA’s central tenets – such as the individual mandate – were actually dreamt up in right-wing think tanks such as the notorious far-right Heritage Foundation. In his desperate and pathetic attempt to present himself as a broadminded statesman, Obama cared far more about bipartisanship than real, radical reform. As a result, he implemented a policy that in large part the Republicans and their corporate masters originally supported themselves but could nonetheless simultaneously pass off to their zombified tea party base as “communist conspiracy” to “wreck America.” In other words, even though the ACA was based in large part on a version of their own proposal, the Republicans couldn’t resist the opportunity to use the reform to whip up a red scare for their own electoral benefit.

If Sanders wants to have a serious chance of winning the Democratic nomination and beating Trump in 2020, he needs to get more disciplined and better informed on the elements of Medicare-for-all and how it compares to both the current system under the ACA and the status quo ante of the pre-ACA era.

Emily Dosal contributed research to this article.

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