Single Payer “State by State”? No. Here’s why…

Born out of the huge frustration with trying to get a National healthcare plan in the US, for well over a century there’s been a movement – sometimes strong, sometimes weak – to get to National Medicare For All (or Single-Payer plan) by enacting it in individual states first. While there are many reasons so many people might find this approach to be attractive, there are several serious flaws, problems, and misconceptions that need to be understood and dealt with. Those problems, which will be outlined below, are… 

Problem number one: The Canadian healthcare story

One popular theory I’ve been hearing a lot is “the federal government is impossible to deal with, so we must put pressure on the states to enact it first. Once the states do it, the pressure will be too strong for the federal government to deny us any longer. After all, that’s how they did it in Canada”. 

Look, I know it’s overwhelmingly tempting to make all kinds of connections that seem relevant, especially if it helps make your case. That temptation, however, as often as not, is a trap. In this case, it’s the mother of all traps. Because how Canada’s Medicare plan came to be is not compatible with any existing plans to implement a  “State-By-State to National Medicare For All” strategy in the United States. For many reasons, it can’t be. 

The first problem is a legal one: namely, the Canadian Constitution.

To truly understand Canadian healthcare we have to first understand why a province (the Canadian equivalent to a US state) had to do it this way and why the federal government couldn’t unless it wanted to change its own laws. It’s because of the way the Canadian Constitution was set up: The Constitution Act of 1867 separated the roles and responsibilities of the provinces and the federal government. As it pertained to healthcare, the provinces were responsible for establishing, maintaining, and managing hospitals, asylums, charities, and charitable institutions. In contrast, the federal government was given jurisdiction over marine hospitals and quarantine. So, it would have been unconstitutional for the federal government to step in and pay for it all. It would have been unconstitutional for the federal government to pay for any of it in absence of the provinces initiating it and being in charge of it. I can tell you this for sure: the Canadian idea of “provincial rights” makes the United States’ ideas around “states rights” seem quaint. Just ask a member of the Parti Québécois… 

Canada launched its healthcare plans in 1947 when Saskatchewan began offering hospital insurance. Now, this is critically important: they only offered hospital insurance – not full coverage. This is a point that is rarely, if ever, acknowledged when the subject of Canada’s health care history is brought up. All-too-often advocates for state-by-state make it sound like some Canadian province offered to cover everything for everyone, leading to other provinces covering everything as well, and only then did a reluctant federal government capitulate and take over the payments. That’s not what happened. At all.

Healthcare took hold in the provinces because it was legally required to. If the federal government (from now on, if I just say “the government”, I always mean federal) had wanted to implement a national single-payer healthcare system they would have had to first endure a long legal battle to change the Constitution. This remains true to this day. It’s a political and legal choice to do healthcare the way they’ve chosen to do it, not a financial one. 

This is not an issue we have in the United States. So, if your argument supporting a state-by-state strategy contains “This is how it works, just look at Canada”, first, if your definition of “this is how it works” is a mere euphemism for “this is how it has to work”, then I would suggest you’ve been misled. In fact, to use a popular poker metaphor, I’ll see your “Canada” and raise you a “United Kingdom” – they started their National Health Service (NHS) in 1948, covering everything for everyone, so clearly it doesn’t have to work this way. Second, remember that Canada had to do it this way, legally. The only other option was a long, protracted Constitutional battle. Perhaps they should have taken the time to do that while the costs were relatively low, but they didn’t. This leads to:

The second reason the Canadian healthcare story is not compatible with the United States is “relative cost”: the cost of healthcare then vs. its cost now. 

In 1947, the infrastructure and costs of healthcare were very different from what they are now. In those days there were fewer issues of affordability. Doctors’ fees were minimal and hospitalizations were rare. This is mostly because, in the decades before 1947, many medications, tests, and procedures were simply unavailable as they had yet to be, or had only recently been invented. As a consequence, a hospital stay was neither as likely nor as expensive as it is now. Even so, medicine was getting more sophisticated. New techniques, medications, testing, and procedures were being invented and were becoming possible for hospitals to use for the general public. As a result, the possibility of a hospital stay, along with the likelihood of it being unaffordable to many, was on the rise. So, as private insurance companies in the United States began offering health coverage (and businesses used this as a means of attracting and incentivizing people to come work for them), in Canada some provinces created public insurance for hospital stays only. First Saskatchewan, with Alberta and British Columbia following soon after. Remember, they weren’t offering to cover everything as they were in the UK. They were only covering the cost of hospitalizations. 

Bear in mind that the cost of hospitalizations in 1947, while increasingly expensive for individuals, were manageable when entire provinces pooled their financial resources. Even so, 10 years later, in 1957, the government of Canada passed the Hospital Insurance and Diagnostic Services Act of 1957, which offered to reimburse, or cost-share, one-half of provincial and territorial costs for specified hospital and diagnostic services. 

So, while it remained relatively cheap (especially when compared to the cost of a hospitalization today), the provinces stepped in to provide hospital insurance. When those prices went on the rise, the government offered to share the cost, 50/50. No province was going to have to go it alone. That allowed less prosperous provinces to also provide hospital insurance to their citizens. 

This brings us to:

Problem number 2: The political fight – its intensity and duration. 

Canada didn’t provide full healthcare coverage all at once, as they did in the UK. Canada started with hospital insurance in 1947 and very slowly, more and more services were added in; doctor’s visits, lab testing, preventative care…  It resulted in an excruciatingly slow but steady amount of “success”. But just doing that much took over 20 years. How many people went bankrupt, suffered, and died during that time? Now, over 70 years after its inception, this patchwork of different plans – yes, different plans: it’s not a “Single Payer” system, it’s 13 different Provincial and Territorial plans with financial assistance and guidance from the federal government, as well as private insurance plans – STILL doesn’t cover vision, dental, prescription drugs, ambulance rides, or home and long term care!

Can you imagine? Canada doesn’t cover vision (but not to worry, as “only” 55% of Canadians need corrected vision), Dental (almost 75% of Canadians sought dental care in 2018 alone but, at least according to some recent surveys, nearly 100% of Canadians have teeth. But who cares about that – the sooner they lose their teeth the sooner this won’t be an issue, anymore, amiright?), prescription drugs (but only 65% of Canadian adults use them, so, whatever), Ambulance rides (did you really need to get to a hospital? Really? Surely you can get a ride with Uber or Lyft. After all, we need market solutions, right?), or home and long-term care (but who wants to live at home in their old age or be able to live long term at all, right? And what’s this “living with dignity” I’ve heard so much about? I guess it can’t be that important after all… ). 

And, after all this, the struggle to cover these last vestiges of human dignity is almost non-existent and has been for decades. Doing something as important as healthcare “piece by piece” takes much longer to achieve and never ends up covering enough and certainly doesn’t cover everything. The political drive to get the job done diminishes over time. The longer it takes, the more it diminishes. Once a certain threshold of success is reached, the political will to finish the job inevitably grinds to a halt. Canada would be a much different country if it hadn’t done healthcare this way, to be sure, but it would be a much better country if it had just done what was hard while costs were relatively cheap. The real solution would have been to allow the government to be entirely responsible for the cost of healthcare, allowing them to cover everyone for everything, right from the start. 

This is not a system to envy or emulate as an end, even as it is clearly better than our current system. But just about any other system is better than our current one, so let’s aim as high as we can, shall we?

Problem number 3: The US Federal Government itself. 

The government controls the flow of federal dollars for all of its programs, including Medicare (the elderly), Medicaid (the poor), Tricare (the military), the ACA (private exchange plans), and CHIP (children). You don’t get to spend this money “however you want” – there are heavy guidelines and restrictions. You cannot just take this money and pool it into your state plan. The government also heavily regulates private insurance plans through The Employee Retirement Income Security Act of 1974 (ERISA). A state simply cannot compete with, alter, or ignore the ERISA statute, and with over 136,000,000 Americans insured by ERISA-covered plans, navigating workarounds to this law will severely weaken any and all state plans. The more they are allowed to be weakened, the more loudly the opposition will claim “See?! It doesn’t work! We tried to tell you but “nooooooo”, you wouldn’t listen!” and that will be used to kill any and all momentum for any other state plan, let alone a true national single-payer plan, putting us all at risk. 

What’s really interesting with this particular argument for enacting a state-by-state healthcare plan is the often-used argument by its proponents: “working with the federal government and getting them to agree to anything is too big a problem and cannot be done, so we have to go state-by-state”. 

Ok. Let’s be clear about this: proponents of state-based plans say the government is dysfunctional, prone to gridlock, bought and sold by special interests to sabotage progressive legislation, and too cumbersome to quickly meet the demands of any occasion. And while a lot of that is true, it is STILL going to be true as you seek to create the required legal pathways to allow for waivers to be a possibility at all (they currently are not: Rep. Ro Khanna of California is trying to rectify that but with no success) and it will still be true when you apply for those waivers, assuming they ever get created in the first place. 

SO….

…you’re saying that we either need to work around the government, an act that will greatly weaken an already weak healthcare plan, or we must work with (force?) a dysfunctional, gridlocked, and bought-and-sold Congress to give us what they are paid to not give us? Great. 

In other words, your great plan to not have to deal with Congress to get what we want still mandates that we have to deal with Congress to get what we want? I’m sorry but that’s not a great plan or solution. 

And, for what it’s worth, whoever claimed that any and all state governments aren’t also dysfunctional, corrupt, prone to gridlock, and bought and sold by special interests to sabotage progressive legislation? I have yet to hear of ANY government body, whether municipal, county, or state, that isn’t corrupt in some way and hell-bent on preventing any kind of serious progressive action that would threaten the existing power structures in any substantive way. Not one. Additionally, if you think it’ll be easier to go after state houses due to some misguided idea that the size and scope of the issues are better done “on a small scale”, you should know that there are well over 7,000 legislators in all the statehouses right now vs only 535 members of Congress. By the numbers alone, it’ll be easier to pressure 535 people than over 7,000. It’s a question of deciding what you really want and fighting for it like it actually matters, which means putting your time, talents, and resources where they’ll do the greatest good no matter how frustrating it may be, not diluting them in various misguided, if well intentioned, areas that will only result in harm to the whole system.

Remember… working for a state-based plan requires two additional battles, and you must win both:

1. You must fight Congress, and win, to create federal waivers so you can create your state-based single-payer healthcare plan. And…
2. You must fight Congress, and win, everytime you apply for those federal waivers.

So, my ultimate question on this aspect is: If you’re going to have to fight Congress, and win, both to create AND to apply for legal waivers, why waste any amount of energy, time, and money (all resources we cannot afford to waste) in fighting them for these crumbs? The effort to win anything will be the same: extreme. So if the effort will be that excruciating, why engage in that struggle at all for exceedingly less than we all need with a state plan instead of a federal one – the only one that can get the job done? 

Problem number 4: Economics – Federal vs State and Local

Now, when I say “exceedingly less than we need”, I’m not only talking about the serious blow that all state-by-state strategies inevitably bring to bear on any national efforts – every time, no matter what, when yet another state tries. and inevitably fails, to implement its own version of a state-based single-payer healthcare plan, it’s failure is forever immortalized in the national media as further evidence that “it’s too expensive”, “it’s too inefficient”, “it’s too complicated” and therefore “it can’t happen nationally”. They’ll stir up the population at large with scary terms like “economies of scale!”, “bankruptcy!”, a “crushing burden of high taxes!”, they’ll throw in another round of “Death Panels!!” as well as everyone’s favorite “SOCIALISM”!! (a few of the milder examples are here, here, and here. Not so mild, here). While all of that is complete bullshit, that kind of propaganda, repeated over and over on all corporate media, is bad for the national single-payer movement. It’s practically a death blow. So when I talk about the foolishness of fighting for “exceedingly less than we need” I am talking about that, but I’m mostly talking about the dangers in conflating the economics of states and local governments with the federal government or “the difference between what is actually possible to achieve in real terms (ie: can we physically do it?) versus what is financially affordable in monetary terms (ie: do we have enough money to spend on it?)”. This may seem like splitting hairs, but the difference is, and with no hyperbole, the difference between life and death when it comes to things like healthcare. Because the truth is:

The federal government is NOT like a household, it has no characteristics of a business (and should NEVER be thought of as one, let alone run as one), and bears no financial resemblance to any state or municipality.

You see, one of the biggest challenges in activism, civic engagement, and in government itself, is understanding the differences in the roles, powers, and possibilities that exist between state governments and the federal government. What everyone needs to understand (and yet so few do, thanks to decades of media and political lies and misdirections) about this difference lies in the different financial powers these two entities have; state, municipal, and local governments are financially constrained. They are all dependent on local taxes to “pay for“ all their programs. They have to tax and borrow (i.e.,sell bonds) as their main source of getting money to be able to spend on anything. A state’s other source is the federal government itself. States are like you: they have to earn money, borrow money, steal money, or in some other way secure the financing before they can turn around and spend that money. If they want to build a bridge, they’ll need to raise the funds to do it. If they want to pay teachers’ salaries, they’ll need to secure the funding, first. If they want to pay pensions, they’ll need to raise taxes or sell bonds. Why? Because, like you, they are currency users. They do not create, control, or issue their own currency. What they can and cannot do is not limited to the physical and technological resources available to them – they are limited by how much money they can raise to buy those resources. And what they need to use to buy resources is the government’s money – the US dollar. 

The Example of Vermont

When the state of Vermont tried and failed to implement its own single-payer healthcare system it failed because it was “too expensive”. Vermont is a currency user. It had to raise the revenue to pay for any healthcare plan it had wanted to create. The people wanted it so they put intense pressure on their legislature to create and pass it. In fact, the lawmakers did pass it but despite this great success, they couldn’t pay for it. Vermont had to abandon their popular single-payer healthcare system without ever having implemented it. Did this mean there weren’t enough doctors and nurses, hospitals and clinics, medical imaging centers, and other suppliers of the needed medical equipment to provide all the needed services for all Vermonters? No. It didn’t mean that. It meant that, no matter what was available, the state couldn’t raise enough money to pay for it. Much like you might have all the access you need to buy a brand new Mercedes Benz car from your local dealership but if you don’t have the money to buy one, then I’m sorry but you’re walking home. The resources were there for you if you had the money, but you didn’t. It’s the same for any state and local government. It doesn’t matter what they can do based on the available resources. If they cannot pay for what they want to do then it can’t be done. 

Monetary Sovereignty: What is it and why is it important?

The federal government, on the other hand, is financially sovereign. It creates the currency that you, businesses, and state and local governments must have and use to pay for things. It taxes and borrows exclusively in its own currency (but unlike state governments it doesn’t do this for revenue, or as a means of collecting money it can then turn around and spend). And it doesn’t peg (or promise to convert at a fixed price) its currency to anything else, and it hasn’t done so since President Nixon took us off the gold standard in 1971. So, when the federal government taxes you, they’re not doing it to get an “income”; they’re forcing a tax obligation upon you to force you into debt – a debt you legally owe to them and that can only be repaid in what they, themselves, create: the US dollar. This, in turn, means that when the government decides to, for example, build a hospital, they can pay people to do that and use their own created currency to pay them. And that payment will universally be accepted because the people they pay to build that hospital need that money, that specific currency – US Dollars – so they can avoid legal problems, including prison, due to not being able to pay their taxes. Federal taxes serve a LOT of purposes, but NONE of them have anything to do with the government needing an “income”. They never need anyone else’s money. They need everyone else to need their money. They never need to turn a profit, never need a federal loan repaid, and never, EVER should be “run like a business”. Their constraints are never strictly financial in nature: their constraints exist in the real economy – they are resource-constrained. What they can and cannot do is only limited by the availability of the real resources needed to accomplish their goals: brick, mortar, steel, technology, labor… anything and everything that it actually takes to do whatever it is they wish to do. If these resources are available then the government can always pay the bill when it comes due: on time and in full. Always. They can never be forced into insolvency nor can they ever be forced to not pay. Those choices are political, not financial. For more on this, you can see these videos by Stephanie Kelton PhD here, Steven Hail PhD here, Bill Mitchell PhD here, and mine (very much NOT PhD) here. 

The Importance Of Monetary Sovereignty With Healthcare

For example, as it pertains to healthcare, the government doesn’t need to ask “how expensive would it be to give the best possible healthcare to our entire population?”, as Vermont, California, Colorado, New York, and Washington state all have done or must do. All the government needs to ask is “Do we have the resources, the real stuff, to give the best possible healthcare to our entire population?” If they do, if those resources are available, then all they need to do is mandate that they be purchased for that purpose by writing a bill, and when the President signs it then the central bank (the Federal Reserve) and the Treasury coordinate to create the currency and make the payments. If they don’t have the resources available in existence at the moment then they need to ask “Can we create, educate, import, innovate, or in any other way secure the needed resources to give the best possible healthcare to our entire population?” If those needed, but currently unavailable, resources can be created (by building more hospitals or educating or importing more doctors, for example), then bills are crafted and signed into law and these things will then be created. Only if the real resources in doctors, nurses, hospitals, clinics, pharmaceutical companies, and medical technology companies with the needed know-how are not in existence (or are not possible to produce either through education or importation) does the government then have any real constraints over whether or not it can provide the best possible healthcare to all its citizens. For more on how the government spends, see this paper by Professor Stephanie Kelton, PhD, here. 

To put it simply, if something is “for sale” in the government’s own currency, then it can “afford to buy it” with no regard to solvency issues. What it might do is bid up the price on certain products, technologies, and labor as it seeks to move some things from private to public use. In other words, if we reach the limit of what we can produce in real (not financial) terms, then there might be inflation (but there are a lot of other causes of inflation beyond government spending). This will have to be weighed against the need to have the best possible healthcare for the entire population – would some inflation be worth that effort? How much inflation? Would we need to see to other ways to combat inflation? Price controls, going after monopoly power and price gouging, increasing production in other ways through the elimination of wasteful uses of public resources, seeking innovative solutions through technology and efficiencies, as well as a better tax code? And all of this can be handled through centralized planning in ways that we’ve done many times before, most notably during World War II. For more on understanding and combating inflation, see here, here, and here.

Problem number 5: What if a State succeeds in passing it?

So, you successfully got your state to pass and implement its own version of a single-payer healthcare system? You got your needed federal waivers and/or successfully worked around them? Good for you. You worked your ass off and you deserve a huge round of applause. Seriously. That’s no joke. But, now that you’ve done the impossible, you’re not done, yet. Not by a long shot. 

Why?

Because, ironically, one of the biggest challenges and problems with state-based healthcare plans isn’t getting them enacted. It’s “what happens if a state not only successfully votes for their own version of single-payer healthcare but they also get to implement it?“. In other words, “what are the consequences of being successful?” Counter-intuitive, right? But hear me out… 

As I’ve implied before (and will now unequivocally state), healthcare is not about money, it’s about resources; do you have what you need? Can you distribute it all to everyone who needs it? The money is only important when it comes time to pay the bill. Sounds obvious, right? But the real question that’s implied is, “who is paying the bill?”…

If you have to pay for your own healthcare then the cost of that healthcare will be of the utmost importance. After all, you only have so much money available and healthcare is extraordinarily expensive today. Individuals without insurance are on the hook for all of it. There’s virtually no way the vast majority of people would ever be able to pay their healthcare costs. It’s an impossibility with a body bag attached to it. 

Yet, even if you do have insurance, so what? Insurance companies are a business and therefore are, from an economic standpoint, just like you; they have to earn (or somehow acquire) the needed funds to pay for your care on top of the profit they demand for themselves and their shareholders (notice the order, there? For-profit insurance companies want to pay themselves before they’ll even consider your needs). It’s commonly known that medical issues are one of the leading causes of personal bankruptcy in the United States. What is not commonly known is that most of the people who file for medical bankruptcy have health insurance. Having health insurance is no guarantee that you’re not going to wind up bankrupt, homeless, and facing even further deprivation and, possibly, an early, lonely, miserable, and senseless death. 

Additionally, medical errors in hospitals are the third leading cause of death in the US. This is because for-profit healthcare systems want to pay themselves before they even think about saving your life. As a result we get things like insufficient nurse to patient ratios, a lack of reliable equipment, doctors being forced to see more patients in less time, and a host of other issues cloaked in the guise of efficiency and cost-consciousness but are really just about greed and stuffing the pockets of the already insanely rich, and all because the financial resources needed to purchase more equipment and hire more nurses and doctors are diverted to useless middlemen whose only job is to deny you the care you need so they can inflate “shareholder value” and CEO pay instead of ensuring the best patient outcomes possible. 

It Matters Who Pays The Bill

So, yes; it matters who pays. It matters a great deal. The problem is you can’t pay and your insurance company either also can’t pay (those that are not-for-profit but are still financially constrained, but we can charitably assume they really do care about you more than their bottom lines, it’s just that their hands are tied, financially) or doesn’t want to pay (the for-profit ones that I shall not be charitable towards). So what does that leave us with? 

Well, someone has to pay, right? “Doctors aren’t going to work for free!“ Is the rallying cry of those who think they’re saying something important about the follies of single-payer healthcare. “The problem with socialism is, eventually you run out of other people’s money!“. My, my… They do think they’re clever, don’t they? The problem is they’re just ignorant. They don’t understand federal economics. But, let’s take a look at this scenario, for while it may not apply at all to federal economics, it does apply to state economics. 

As I’ve addressed, states have to raise funds, either through taxation or borrowing (or some other form of financing, most notably through grants from the government) before they can spend. That means if New York, for example, wanted to do a state-based single-payer healthcare plan, and it took, for example (and arbitrarily), $100 billion a year to give “free at the point of service“ healthcare to all the citizens of New York state, it would have to raise taxes, sell bonds (ie: borrow) or secure some funding from the government to come up with that $100 billion every year. If they can’t do that, then they can’t enact their healthcare plans, at least not fully. Most states would wind up like Vermont, completely unable to finance it at all and forced to abandon the idea completely. But, if we were to wind up with a scenario where the state can enact its plan but cannot fully pay for it, then they’ll not be able to provide what was promised. They’ll have wait times, shortages of all kinds, and ample ammunition for politicians and pundits on Fox News, CNN, MSNBC, and other opponents of single-payer healthcare to say “See?! We told you it was a mistake! We told you it wouldn’t work!“. 

This hurts us. All of us.

It hurts the national movement for a federal single-payer healthcare plan. 

We will have armed the opposition with everything that they need to kill the national movement. They’ll throw everything they have at it and we’ll have made it so easy for them to do it that they really should buy us all something special just to say “Thanks”. Buying us healthcare would be nice. Do you think they’d do it?…

But let’s say they can do it. Let’s say they can get the full $100 billion, every year, allocated for this so their healthcare plan is fully funded. No problems. Great job, right? Except… 

What happens when the needed higher state taxes become too burdensome and political backlash says “We’re not going to pay! We’d rather move out of the state“. Remember: “The problem with socialism is: eventually you run out of other people’s money”. This is most likely to happen if healthcare costs are not controlled and keep going up faster and higher so state taxes also have to keep going up. That is a disaster waiting to happen, with insurance execs and other sociopathic elements of our society drooling in the background, waiting to feed… 

The wealthy are quite happy to leave and/or hide their earnings. They’re quite happy to cry “poor“. Corporations are quite happy to move their operations elsewhere, either to other states with lower taxes or overseas, and they all have the resources at their beck and call to make that happen without breaking a sweat. Before you know it, state corporate tax receipts go way down. This usually leads to layoffs so unemployment goes up which makes state income tax revenue go down and all while state unemployment benefits have to go up. Now healthcare is threatened, all over again. And look, there’s Fox News, again, crying “See?! We told you it wouldn’t work!“ Ah, they’re so much fun. And, just like that, the national movement for single-payer is threatened, yet again. We all lose. Every. Last. One. Of. Us. 

But even if you don’t get that kind of a backlash – say maybe the state actually is successful in controlling costs (an unlikely outcome given the healthcare industry would still have the rest of the country to economically rape) economic downturns are always the norm – it’s only a matter of time before we have another recession, another economic emergency, another natural disaster, another pandemic, or some other cause for major economic disruption. Sales will go down, unemployment will go up, state tax receipts will go down, and now healthcare is, again, threatened. Not because we suddenly ran out of doctors or hospitals, but because the entity we put in charge of paying for it (a currency user – in this case, a state) suddenly could no longer pay for it. In other words, your healthcare, under a state-based plan, is always, always under threat. It is always out of the control of the entity that you charged with paying for it. On the assumption that your state government actually wants to do this and that it wants to fully fund it, they will be at their wit’s end, 24 hours a day, 7 days a week, trying to find ways to make sure that they have the money for it, now and in the future. And the wolves will always be at the door. You will never be safe. Ever.

The Rich And Businesses Are Too Well Adept At Avoiding Paying Any Taxes

The fact is, states are revenue constrained and can’t afford to do everything they want to do. Far too many states are revenue poor. Many companies push their legislatures around on tax policy to make it more favorable to them (promising booming economic outcomes for the people that they never deliver) and if they don’t get what they want they’ll just “take their ball and go home” ie: leave the state like so many tech companies are currently doing to California, or like Amazon did when it shopped around the entire country to build its second corporate headquarters but demanded a near-zero tax burden from whichever state it would finally chose, promising a few thousand (low paying) jobs in exchange. And states were so economically desperate that they ate up such draconian proposals and even tried to outbid each other in a huge “race to the bottom”. But we’ve seen what happens when states slash corporate taxes. In Kansas, for example, the idea was that if you slash corporate and business taxes these entities would turn around and spend this money on job creation. But without spending from the public, a public that was already financially underwater, there was never much (if any) job creation. Nor was the promised job creation ever guaranteed to be of good quality, sufficient pay, or offer any security, whatsoever. This type of local tax policy leads to lower state revenues, which leads to states slashing services to the neediest and, when that is no longer enough, slashing services to everyone. We see municipalities and states alike selling off their assets, like water and electricity – even parking meters and highway tolls – to private corporations to shore up dwindling state coffers, leading to poorer and poorer outcomes. This all leads to even greater job precarity for the people and the insufficient gig economy. You can forget about any kind of state-based healthcare plan under such politically created economic conditions. 

Remember, if you charge your state with paying for healthcare, they have to raise the money to do it. If state tax receipts fall off, where do you think they’ll find the money to pay for your healthcare then? Slash services to the poor? The Elderly? To Schools? To Pension funds? Or, will they just cut your health benefits? Even the richest states have to make such choices every day. With a state, everyone’s head is on the block… waiting for the financial axe to fall… 

But the federal government has no similar economic restrictions. In good times and bad, it can always pay the bill when it comes due because it is the monetary sovereign – it creates the currency that we all need and use. It is the source of all US dollars, through direct spending (Congressional bills signed into law by the President) or as private debt through its agents, the banking system. There is no economic downturn under which the government would no longer be able to pay for healthcare. There is no pandemic that could keep the government from being able to afford to pay for any programs or needed services, including healthcare. There is no war, natural disaster, or economic calamity that would ever mean the government “can no longer pay for” any federal program, including healthcare. Federal taxes could fall off a cliff, as they did during the Great Depression, and the government would still be able to increase spending to compensate for that loss. This is not to say that there are no limits to federal spending – there are limits. But none of those limits have anything to do with “affordability” or “revenue” of any kind, least of all federal tax revenue. As discussed, their limits are the limits of the physical resources at hand to produce what they wish to produce. The brick and mortar issues: steel, concrete, technology, education, and labor. In other words, the limits are full employment and inflation. 

Is Healthcare a Human Right?

If you want healthcare for everyone, regardless of economic circumstances, if you believe healthcare is a human right, then only the federal government can accomplish this. It is the only entity that doesn’t care how expensive something is, it doesn’t need an income, and it doesn’t need any kind of financial return on its investments. It only has to care if it’s physically possible to do and get it done. Any other system is forever bound to encounter obstacles that are financial in nature, first and foremost. In those systems, every healthcare decision that will ever be made on your behalf will have economic considerations before all others, including what’s in your best interest. That means (non-federal) healthcare cannot be a right, it’s a privilege. That’s what purely financial restrictions do – they eliminate rights and replace them with privileges. So, if you want healthcare to be a human right then it must be above all financial considerations. That means that only the federal government, the monetary sovereign, can get the job done. No one and nothing else can. 

So, if you’re considering fighting for a state-based healthcare plan, especially if you agree that it should be a human right, I hope you keep this in mind: What you’re proposing is going to be incredibly hard, unlikely to succeed in the first place given the political entanglements involved, likely to fall apart in the long run (even if you do succeed) due to the financial limitations of all states, and most importantly, win or lose, will be used to completely derail the movement for a national, updated, and improved Medicare For All. 

Please, Don’t Do Pelosi and McConnell’s Job for Them

Many people haven’t really stopped to wonder why so many in Washington DC say that “States are the laboratories of democracy”; it’s because so much that can be done and needs to be done is very expensive so, as I’ve shown, it matters who pays. Things like healthcare can enslave or liberate a nation. That’s why so many special interest groups from chambers of commerce, health insurance companies, pharmaceutical companies, hospital organizations, and others that will lose market share and power are so dead-set against single-payer: it liberates the people and threatens their power. They also know that states cannot accomplish this task, so their employees (politicians, political operatives, mainstream media, and their pundits) seek to distract the people. They will either scare you with “SOCIALISM!” or they’ll speak to you in paternal/maternal tones, saying “it’s not the right time” or like Rep Ro Khanna saying “Let’s just make it easier for the states to do it.” When Rep Khanna says this, or Nancy Pelosi tells us that “States are the laboratories of democracy” what they’re really saying is “Leave us alone. Don’t put any pressure on us to do anything. After all, it’s up to the states. If they can figure it out then maybe, just maybe, we’ll get a federal program” when they know that won’t happen so they won’t have to do anything, which is what they’re paid to do. They’re actively standing in the way of what the vast majority of the people want and desperately need. What I’m trying to show everyone with this paper is what those in DC already know: that a state single-payer program can’t work. 

I know it’s incredibly frustrating. I know that all too well. Everyone loves their family and their community, and desperately wants to see them all thrive, and I love you all so much for that commitment. I understand the frustration that comes with dealing with the federal government (with any government, really) while your loved ones suffer for no other reason than for the greed of the few. However, I hope that by now you see that all the incredible efforts you would put into a state-based plan would be better served going into the national movement, going into mutual aid, and a general strike, so we can get all the healthcare we would ever need for everyone and more. There really is only one way to go, and we can only get there by all rowing in the same direction at the same time and forcing the government to enact, and fully fund, single-payer healthcare: Medicare For All. 

Peace 

Notes and Links

Amazon and Businesses

To Meet Amazon’s Tax-Break Demands For HQ2, Will Cities Get Steamrolled Or Win Community Benefits? – Fast Company

‘Competitive’ distractions: Cutting corporate tax rates will not create jobs or boost incomes for the vast majority of American families – Economic Policy Institute

Why Silicon Valley Companies Are Moving to Texas – Investopedia

Inflation

An MMT response on what causes inflation – Financial Times

Inflation & the Politics of Pricing with Nathan Tankus – MR Online

Modern Money and the War Treasury – Sam Levey

Federal Economics

Can Taxes and Bonds Finance Government Spending? – Professor Stephanie Kelton

Why Government Spending Can’t Turn the U.S. Into Venezuela: When poor countries fall prey to inflation, it’s not because they’re “too socialist.” – Professor Fadhel Kaboub

The Gold Standard

Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls – Federal Reserve History

ERISA Issues

Text for the The Employee Retirement Income Security Act of 1974

What if the Road to Single-Payer Led Through the States? – New York Times

The Preemption Clause That Swallowed Health Care: How ERISA Litigation Threatens State Health Policy Efforts – Health Affairs

What Is ERISA Health Insurance? – Association Health Plans

State Health Plans Challenged by ERISA – National Conference Of State Legislatures

Rep. Khanna Introduces State-Based Universal Healthcare Act, Landmark Step Towards A National Medicare For All Plan – from his website

State Tax Issues

Even Doubling Taxes Wouldn’t Pay for ‘Medicare for All’: Bernie Sanders’s brainstorm would cost taxpayers $32.6 trillion over the first decade. – Wall Street Journal

Pelosi Remarks at the National Governors Association Summer Meeting

Vermont had to “scrap” its single-payer health  insurance program because it was “going bankrupt.” – Politifact

Why single payer died in Vermont – Politico

Democrats’ single-payer health-care dream just became a nightmare – CNBC

Why Single-Payer Healthcare May Not Pass In New York Even With Democrats In Control – NY1

The Oklahoma Teachers’ Strike Is a Mutiny Against Austerity – In These Times

Oklahoma Austerity: Budget Crisis May Lead to Freeing Prisoners – teleSUR (English)

As Trump Proposes Tax Cuts, Kansas Deals With Aftermath Of Experiment – NPR

Kansas ‘Real Live Experiment’ in Trickle-Down Tax Cuts – CAP

Kansas Provides Compelling Evidence of Failure of “Supply-Side” Tax Cuts – Center on Budget and Policy Priorities

Healthcare, Medical Debt, and Medicare For All

Seventy percent of Americans support ‘Medicare for all’ in new poll

An American Sickness: How Health Care Became Big Business and How You Can Take It Back – Elisabeth Rosenthal, MD

The third-leading cause of death in US most doctors don’t want you to know about – CNBC

This is the real reason most Americans file for bankruptcy – CNBC

Only in America: Bankruptcy Due to Health Care Costs – American Journal of Medicine

The Burden of Medical Debt: Results from the Kaiser Family Foundation/New York Times Medical Bills Survey – Kaiser Family Foundation

The U.S. Health Care Non-System, 1908-2008 – AMA Journal Of Ethics

National Health Expenditures, 1929-68 – Social Security Administration

Economics

63% Of Americans Don’t Have Enough Savings To Cover A $500 Emergency – Forbes

Consumer spending in World War II: the forgotten consumer expenditure surveys – US Bureau of Labor and Statistics

Canadian Dollar – Oanda

Back on the Gold Standard–Temporarily (1926-31 – Bank Of Canada)

Canadian Healthcare

Hospital Insurance and Diagnostic Services Act – Wikipedia page

Canada’s Health Care System – Government Of Canada

Dental Care, 2018 – Statistics Canada

Eyeglasses Trending: More Canadians Are Wearing Eyeglasses As Their Primary Form Of Vision Correction – Optical Prism

Prescription Drug Use Among Adults Aged 40–79 in the United States and Canada – CDC

United Kingdom Healthcare

The Birth of the NHS – Historic UK