Single Payer Wealth Transfers
Megan McArdle has a thought provoking piece on the morality of transfers inherent in a single-payer health care financing system. She focuses on the morality of paying more benefits for older and wealthier people at the expense of younger workers. One of her commentators pointed out that most people are eventually part of both classes, blunting her analysis somewhat.
But a single payer system does not require preferential treatment of either young or old. All it requires is that some groups will benefit and some groups will be harmed relative to the status quo.
A single payer system utilizes the legislative system to determine, directly or indirectly, what services will be covered, at what price, and where and to whom those services should be made available. As such, you could design a single payer system that counters the natural proclivity for greater healthcare spending at older ages. A system could, for example, limit the number of lifetime days spent in a hospital (think of the lifetime reserve day max in today’s Medicare), choose not to cover services disproportionately used by the elder (think of the absence of ambulance coverage in many Canadian provinces), choose to make fewer medical services available in communities disproportionately populated by the elderly (think of the rural/urban disparities in today’s Medicare, Medicaid funding disparities by state, etc.), or choose to be laggard in issuing National Coverage Decisions for new technologies for elderly conditions.
But you don’t have to stop with benefit payment alterations. You could raise funds from the so-called death tax, or you could increase taxes on Social Security benefits. You could increase the progressivity of the income tax, or make the tax rate age dependent. You could attack a different group entirely, perhaps by choosing the ever popular method of burdening generations of unborn to the benefit of those currently living (deficit financing).
A single-payer system is an abstraction and as such cannot be attacked on the specific ground Megan is choosing to fight. Its beauty and vice lies in its leverage of the political process to give something to someone at the expense of someone else. Is it likely that the elderly will carry a large political clout and extract for themselves a high benefit to funding ratio? Yes. But that doesn’t mean that it is inevitable.
… I can hear the youth activists now … we only get semi-private room coverage for 3 hours after labor! Horror. Let’s pay for private room coverage for 3 days after birth, complete with Jacuzzis!