Many people are focused on creating a Medicare-for-all health insurance system in the United States and for good reason, it would be the best. However, I do not think this will happen. We will, however, get a Medicaid-for-all system in the United States and I think it will happen by 2025. Here's why.
The Affordable Care Act is the greatest expansion in government-run health insurance since the inception of Medicaid. Medicaid will now insure all individuals below 133% of the poverty line. The Affordable Care Act also includes a subsidy system for all those making less than 400% of the poverty line.
When the CBO scored the Affordable Care Act, it was done in such a way as to present the lowest possible cost to the electorate. I also think that many more individuals will lose their employee sponsored insurance than previously thought and the cost per individual will be greater than they found in the way they scored it. In short, the costs of the subsidy system will be far greater than previously anticipated(or at least expressed). With a very tight budget for the foreseeable future, these increases in costs will need to be covered.
There are only a few ways to balance this portion of the budget: 1. drop coverage, 2. cut benefits, and 3. raise taxes are all politically untenable. The fourth option is to put all those who receive subsidies onto the state-based Medicaid programs. Because the Federal government will pay the difference between the small percentage payed by those receiving subsidies and the true cost of the health insurance, switching to Medicaid would save them the cost difference between Medicaid and the private insurance. This cost savings will compel lawmakers to require those receiving subsidies to buy into the state-based Medicaid systems.
At this point all individuals below 400% of the poverty line and others will be on Medicaid. All those over 65 will be on Medicare. The last step will be to then allow all individuals, regardless of income, to buy Medicaid as their health insurance. Then we will have all individuals on government-based insurance that will continue to morph more and more into a nationalized health care plan.
So that is how it will happen. Affordable Care Act implemented. Subsidized individuals into Medicaid. All other individuals in Medicaid. Morph into a true single payer system over time.
This is how Canada did it. Each province designed their own health insurance plan and it morphed into single-payer system. My wife, who is from Ontario, does not have a Canadian health insurance plan. She has the Ontario Health Insurance Plan(OHIP). It is that way in all provinces. They each have their own. But since, over time, they have become almost the same, are partially funded by the Federal government, etc... it is pretty much a national single-payer system. This is how we will get there as well.
I stated that I think this will happen around 2025, and here is my thinking. It is my belief that President Obama wants the Simpson-Bowles Illustrative Tax Plan. I believe it is one of the few things that has a chance of getting through the Congress. It lowers and combines the tax rates at 12, 22, and 28%. All income is taxed as ordinary income and credits for mortgages, charity, etc... are set at 12% so that all income levels get an equal value for these. It is just about as progressive as rolling back the Bush Tax Cuts for the rich but, here is the important thing, it caps the deduction for employer sponsored insurance at the 75th percentile in 2014, freezes it in nominal terms through 2018, then phases it out by 2038. In other words, the tax incentives for employer insurance are going to be severely limited and then eliminated. When this happens, not only will significant downward pressure be exerted on health spending in this country, but the incentive to get insurance or give insurance through a employer will be eliminated. This means more people off ESI and onto the subsidy system. This will cause the costs of the subsidies to increase.
The elimination of the ESI exclusion will also limit the amount spent on insurance in this country. This goes along with competition of exchanges lowering prices. Let's also not forget that health insurance companies will also be required to spend significantly more on care, which will further cut into their profits. These all will limit the profitability and political clout of the private health insurance industry.
This process will be progressive but will have serious effects on the industry during 2017,2018, 2019, etc... Around this time, the people will be losing more and more tax benefits to receiving ESI, and will therefore be dropping coverage in favor of the subsidy system as both employers and employees will receive a greater benefit of dropping coverage and entering the subsidy system. This raises costs and, at some point during the late teens/early 20's those on subsidies will be shifted into the Medicaid system.
This will be the death blow to the private insurance industry for three reasons. First, their pool of individuals will shrink dramatically due to the loss of all customers below 400% of the poverty line. Secondly, around this time the last of the baby boomers will be entering the Medicare system, further swelling Medicare's rolls and decreasing the pool of private insurance customers. Thirdly, the large enrollment in Medicaid will begin a call to Medicaid for all individuals as, like Medicare, it is a far cheaper system that just gives the benefits it is supposed to without all of the hassle and run-around of the private insurance industry. At some point in the early 20's, all individuals will be allowed to buy from Medicaid and we have a nation of states with Medicaid-for-all but the elderly systems. Soon enough, all federal health funds will be bundled and given to states to implement fully single-payer systems.
I am not sure when this will happen but I suspect it will be around 2025 for the reasons stated above and also because the Medicare trust fund will run dry around 2025. This is the perfect storm that is being built. The step we should all push for, to achieve this 'judgement day' is the exclusion of employee sponsored health insurance. As a union member, this will affect me as much as anyone else, but it is what must be done to gain the system we want. It is a means to the end. The good thing is that, because so many union members will be adversely affected, the Republicans should have cover to go along with it.
Barack Obama didn't directly give us single-payer, and he didn't need to. All he needed to do was push the ball just over the top of the hill, and he did. It will roll all the way down the other side on its own.
Let me know what you guys think and I may update this post after reading the comments.
Thanks