Pros and Cons of Government Healthcare

Team of doctors walking in hospital hallway

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Government healthcare refers to government funding of healthcare services via direct payments to doctors, hospitals, and other providers. In the U.S. healthcare system, medical professionals are not employed by the government. Instead, they provide medical and health services privately and are reimbursed by the government for these services, in much the same way that insurance companies reimburse them.

An example of a successful U.S. government healthcare program is Medicare, established in 1965 to provide health insurance for people aged 65 and over or who meet other criteria such as disability.

For many years, the U.S. was the only industrialized country in the world, democratic or non-democratic, without universal healthcare for all citizens provided by government-funded coverage. But in 2009, that changed. Here's everything that happened and why it matters still today.

50 Million Uninsured Americans in 2009

In mid-2009, Congress worked to reform U.S. healthcare insurance coverage, which at that time left more than 50 million men, women, and children uninsured and without access to adequate medical and health services.

This deficit was due to the fact that healthcare coverage for all people, except for some low-income children and those covered by Medicare, was provided only by insurance companies and other private-sector corporations. This made it inaccessible for many Americans.

Private company insurers proved ineffective at controlling costs and providing inclusive care, some actively working to exclude as many people from healthcare coverage as possible.

Explained Ezra Klein for The Washington Post: "The private insurance market is a mess. It's supposed to cover the sick and instead competes to insure the well. It employs platoons of adjusters whose sole job is to get out of paying for needed health care services that members thought were covered," (Klein 2009).

In fact, multi-million bonuses were even awarded annually to top healthcare executives as an incentive to deny coverage to policyholders.

As a result, in the United States pre-2009, more than eight in ten of individuals uninsured were from families living 400% below the Federal Poverty Level. Non-white populations were also disproportionately uninsured; Hispanics had an uninsured rate of 19% and Blacks had a rate of 11% though people of color only made up 43% of the population. Finally, 86% of uninsured individuals were adults not classified as elderly.

In 2007, Slate reported, "The current system is increasingly inaccessible to many poor and lower-middle-class people ... those lucky enough to have coverage are paying steadily more and/or receiving steadily fewer benefits," (Noah 2007).

This widespread issue led to a reform campaign begun by the Democratic party and supported by the president.

Reform Legislation

In mid-2009, things got heated when several coalitions of Congressional Democrats crafted competing healthcare insurance reform legislation. Republicans did not contribute much substantive healthcare reform legislation in 2009.

President Obama voiced support for universal healthcare coverage for all Americans, which would be provided by selecting among various coverage options, including an option for government-funded healthcare or a public plan option.

However, the President stayed safely on the political sidelines at first, forcing Congressional clashes, confusion, and setbacks in delivering on his campaign promise to "make available a new national health plan to all Americans."

Healthcare Packages Under Consideration

Most Democrats in Congress, like the president, supported universal healthcare coverage for all Americans offered through various insurance providers and many coverage options. Many saw a low-cost, government-funded healthcare option as important to include.

Under the multi-option scenario, Americans satisfied with their present insurance could opt to keep their coverage. Americans dissatisfied or without coverage could opt for government-funded coverage.

As this idea spread, Republicans complained that the free-market competition offered by a lower-cost public-sector plan would cause private-sector insurance companies to cut their services, lose customers, and inhibit profitability to the extent that many would be forced to go entirely out of business.

Many progressive liberals and Democrats believed strongly that the only fair, just U.S. healthcare delivery system would be a single-payer system, such as Medicare, in which only low-cost, government-funded healthcare coverage is provided to all Americans on an equal basis. Here's how the public responded to the debate.

Americans Favored a Public Plan Option

According to HuffPost journalist Sam Stein, the majority of people were in support of public healthcare options: "... 76 percent of respondents said it was either 'extremely' or 'quite' important to 'give people a choice of both a public plan administered by the federal government and a private plan for their health insurance,'" (Stein 2009).

Likewise, a New York Times/CBS News poll found that, "The national telephone survey, which was conducted from June 12 to 16, found that 72 percent of those questioned supported a government-administered insurance plan—something like Medicare for those under 65—that would compete for customers with private insurers. Twenty percent said they were opposed," (Sack and Connelly 2009).

History of Government Healthcare

2009 was not the first year that government healthcare was talked about, and Obama was far from the first president to push for it; past presidents had proposed the idea decades before and taken steps in this direction. Democrat Harry Truman, for example, was the first U.S. President to urge Congress to legislate government healthcare coverage for all Americans.

According to Healthcare Reform in America by Michael Kronenfield, President Franklin Roosevelt intended for Social Security to also incorporate healthcare coverage for seniors, but shied away for fear of alienating the American Medical Association.

In 1965, President Lyndon Johnson signed into law the Medicare program, which is a single-payer, government healthcare plan. After signing the bill, President Johnson issued the first Medicare card to former President Harry Truman.

In 1993, President Bill Clinton appointed his wife, well-versed attorney Hillary Clinton, to head a commission charged with forging a massive reform of U.S. healthcare. After major political missteps by the Clintons and an effective, fear-mongering campaign by Republicans, the Clinton healthcare reform package was dead by Fall 1994. The Clinton administration never tried again to overhaul healthcare, and Republican President George Bush was ideologically opposed to all forms of government-funded social services.

Again in 2008, healthcare reform was a top campaign issue among Democratic presidential candidates. Presidential candidate Barack Obama promised that he would "make available a new national health plan to all Americans, including the self-employed and small businesses, to buy affordable health coverage that is similar to the plan available to members of Congress."

Pros of Government Healthcare

Iconic American consumer advocate Ralph Nader summed up the positives of government-funded healthcare from the patient's perspective:

  • Free choice of doctor and hospital;
  • No bills, no co-pays, no deductibles;
  • No exclusions for pre-existing conditions; you are insured from the day you are born;
  • No bankruptcies due to medical bills;
  • No deaths due to lack of health insurance;
  • Cheaper. Simpler. More affordable;
  • Everybody in. Nobody out;
  • Save taxpayers billions a year in bloated corporate administrative and executive compensation costs, (Nader 2009).

Other important positives of government-funded healthcare include:

  • 47 millions Americans lacked healthcare insurance coverage as of the 2008 presidential campaign season. Soaring unemployment since then caused the ranks of the uninsured to swell past 50 million in mid-2009. Mercifully, government-funded healthcare provided access to medical services for all uninsured, and lower costs of government healthcare caused insurance coverage to be significantly more accessible to millions of individuals and businesses.
  • Doctors and other medical professionals can now focus on patient care and no longer need to spend hundreds of wasted hours annually dealing with insurance companies. Patients, too, no longer need to fritter inordinate amounts of time haggling with insurance companies.

Cons of Government Healthcare

Conservatives and libertarians generally oppose U.S. government healthcare mainly because they don't believe that it's a proper role of government to provide social services to private citizens. Instead, conservatives believe that healthcare coverage should continue to be provided solely by private-sector, for-profit insurance corporations, or possibly by non-profit entities.

In 2009, a handful of Congressional Republicans suggested that perhaps the uninsured could obtain limited medical services via a voucher system and tax credits for low-income families. Conservatives also contended that lower-cost government healthcare would impose too great of a competitive advantage against for-profit insurers.

The Wall Street Journal argued: "In reality, equal competition between a public plan and private plans would be impossible. The public plan would inexorably crowd out private plans, leading to a single-payer system," (Harrington 2009).

From the patient's perspective, the negatives of government-funded healthcare include:

  • A decrease in flexibility for patients to freely choose from a vast cornucopia of drugs, treatment options, and surgical procedures offered today by higher-priced doctors and hospitals.
  • Fewer potential doctors may opt to enter the medical profession due to decreased opportunities for high compensation. Fewer doctors, coupled with skyrocketing demand for doctors, could eventually lead to a shortage of medical professionals and to longer waiting periods for appointments.

Healthcare Today

In 2010, the Patient Protection and Affordable Care Act (ACA), often called Obamacare, was signed into law by President Obama. This act provides provisions that make healthcare more affordable such as tax credits to low-income families, expanded Medicaid coverage, and made more types of health insurance available to uninsured consumers at different prices and levels of protection. Government standards have been put in place to ensure that all health insurance covers a set of essential benefits. Medical history and pre-existing conditions are no longer legitimate grounds for denying coverage to anyone.

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