Are We Heading Toward Socialized Medicine?

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Abstract

With health reform at the forefront of the national campaign, some charge that proposals to restructure our health care system represent dangerous steps moving the country towards government-run health care and socialized medicine. Similar rhetoric was heard last fall when President Bush vetoed legislation reauthorizing the State Children's Health Insurance Program (SCHIP). We find this rhetoric inapplicable to both the SCHIP bill and proposals from most presidential candidates. The core issues in health reform involve, not the size of government, but proposals' effect on the number of uninsured, access to quality care, cost growth, and consumers' health care choices.

Summary

Amid a spirited campaign where health reform will be a leading issue, some have charged that proposals to restructure the nation's health care system represent dangerous steps that would move the United States toward a government-run health care system and socialized medicine. Similar rhetoric was heard last fall when President Bush vetoed reauthorization legislation for the State Children's Health Insurance Program (SCHIP) that passed the House and Senate with bipartisan support. This paper examines that rhetoric and, in short, finds no evidence to support it.

Strictly speaking, socialized medicine involves government financing and direct provision of health care services, as with the traditional British system. Neither SCHIP reauthorization nor proposals from the major Democratic presidential candidates fit this description. While these policies would provide additional public resources to help the uninsured pay for coverage and would increase the pooling of risks in insurance markets, none would overturn the dominant role of private insurance and private providers in America's health care system. However, some single-payer proposals (like former candidate Dennis Kucinich's plan) would limit the ability of individuals to obtain, and providers to render, care outside the public system—potentially giving the federal government sufficient power to constitute the functional equivalent of socialized medicine.

Some suggest that almost any expanded role for government in health care inevitably leads to strict limits on consumer choice, rationing, delays, and poor quality—all concerns traditionally associated with socialized medicine. These concerns, however, do not apply to the 2007 SCHIP proposals or to plans advanced by leading Democratic candidates, which would offer workers more choices among competing, private health plans than they currently receive from their employers.

Market-oriented approaches proposed by President Bush and some current and former Republican presidential candidates would expand coverage by granting tax subsidies that people could use to buy insurance in the individual market. But if tax subsidies are inadequate at low levels of income and there is little or no improvement in the nongroup market's pooling of risk, many low-income households and people with health problems will face difficulties obtaining essential care—exactly the problems of poor access and quality that supposedly characterize public-sector coverage.

No reform proposal under serious consideration would result in either a purely government-run system or a free market that offers entirely unregulated and unsubsidized health care. All serious proposals are on a continuum between these extremes. For example, market-oriented plans retain significant public-sector responsibilities for Medicaid, Medicare, medical research, product safety, etc. Similarly, proposals to replace the current tax deductibility of employer coverage with refundable tax credits would redistribute a substantial amount of income from higherto lower-income households—one of the major ways the government affects Americans' lives.

The core issue in health reform is not specifically the role of government, but what policies yield the best possible consequences for the American public. Such results include the number of people with health coverage, individuals' access to quality care, curbing cost growth, and consumers' ability to make choices about their health care and health coverage. Inaccurate rhetoric about socialized medicine and government-run health care is a distraction from these much more fundamental concerns.

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The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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