Universal Healthcare is Good for the Economy, Despite What Your Beliefs Tell You

Will Samson No comments exist

One of the mostly hotly debated topics of the modern era is health care. The political right opposes government funding of health care because they believe it allows some people to receive a benefit they didn’t earn and don’t deserve. The left opposes the elimination of government funding for health care because they believe it is immoral to deny coverage for the sick. Those are belief statements. As such, they cannot be judged objectively. What can be judged objectively is the relationship between health care coverage and economic growth. From that perspective, someone who claims to want economic growth while opposing the expansion of health care is clinging to beliefs, not facts.

Looking at nominal GDP (i.e. GDP in pure dollars), the United States is the top producer in the world. Of the remaining countries in the top ten, eight provide universal health care to their citizens (China, Germany, UK, India, France, Brazil, Italy, Canada). Only one other country in the top ten nominal GDP list (Japan) does not.

But, when you look at GDP per capita, which is far more likely to correlate with how individuals’ health coverage relates to the overall strength of the economy, the United States drops to eleventh in the world. Of the countries with per capita GDP that outperform the US, eight have universal health care for their citizens (Luxembourg, Macau, Singapore, Norway, Ireland, Switzerland, San Marino, Hong Kong). Of the countries ahead of us in per capita GDP that do not offer universal health care, three of them are Middle Eastern monarchies (Qatar, Brunei, United Arab Emirates). Kuwait is the only democracy with a per capita GDP greater than the United States that does not offer universal health care. This doesn’t show a direct cause between GDP and universal health care, but it’s impossible to deny a high correlation.

It’s a bit more difficult to perform this type of analysis on a state-level, since only one state (Vermont) offers what could be considered universal health care. The other element making analysis difficult is that the ACA has only been in effect for a few years. But, we can compare per capita GSP (the state version of GDP) to those states that expanded Medicaid under the Affordable Care Act. This tells us whether states whose economic policies are growing the economy are also inclined to increase health care coverage.

By that standard, nine of the top ten US states in per capita GSP expanded Medicaid coverage under Obamacare (Delaware, Alaska, North Dakota, Connecticut, Massachusetts, New York, New Jersey, Oregon, Washington). The only state in the top ten GSP that did not expand Medicaid coverage under the ACA was Wyoming.

Of the ten states with the lowest GSP, in other words the worst performing economies, six voted not to expand Medicaid (Maine, Kentucky,* Alabama, Idaho, South Carolina, Mississippi); two voted to only test the waters (Montana, Arkansas); and only two of the ten lowest GSP states expanded Medicaid coverage under the ACA (New Mexico, West Virginia).

(* Kentucky (43rd in GSP) originally implemented the ACA and had one of the most successful exchanges in the country. Then, a Republican, running against Obamacare, was elected and obliterated the state exchange.)

Whole papers have been written demonstrating the correlation between higher levels of health care coverage and stronger economic development, so I won’t belabor this point. But the belief that expanded health insurance coverage is incompatible with economic growth seems to be the opposite of what the data demonstrates.

Another argument often made against universal health care is that it affects the quality of available medical coverage. This was the heart of the “Obamacare death panel” scare offered by the Tea Party. But is it accurate? Does the expansion of health care coverage affect the quality of available medical care? The answer to that is a very strong no.

US News & World Report ranked the best states for quality medical care. The top ten states all expanded Medicaid under the ACA six years before this study was conducted. You had to go to #16 in quality of medical care (Maine) to find a state that did not expand coverage under the ACA. Conversely, the worst ten states were all states whose governors and/or legislatures rejected the expansion of coverage. We’ve all heard anecdotes about our friend’s Uncle in Sweden who had to wait for his colonoscopy because of universal health care, but the evidence seems to suggest that expanding availability of health insurance, at best, has no relationship to the quality of available medical care.

Another complaint often offered is the “freeloader problem,” or the belief that certain people do not deserve, or have not earned, coverage. (And no, I’m not confusing it with the “free rider” problem) Here’s the basic flaw in that argument – unless you are an anarchist, you are pro-government. The question is not whether the government will dispense funds, but rather how much, when, to whom and for what reason. If there is strong demonstrable evidence that expanding health care grows the economy, than opposing that expansion means you are willing to place your Protestant ethics above economic growth.

What about the question of cost? Opponents of expanded coverage point to the rising costs of insurance under the ACA. I’m sure there are a lot of reasons for this, and one of them was most certainly the inclusion of so many new people, often with pre-existing conditions, into the risk pool. But the greatest factor influencing the rising of rates seems to be the underfunding by Congress for the law itself. By the end of 2016, the GOP controlled House had only been providing about 12% per year of the funds legally required by the law. Because they don’t like the Affordable Care Act, certain members of the House are sidestepping the law and attempting to starve it out of existence.

The underlying beliefs that are driving the current efforts by Republicans to repeal and replace the Affordable Care Act have no basis in fact, and appear to be the opposite of the conclusions we should draw from the available data. We’re all free to believe whatever we want. But, when a mountain of evidence suggests that expanding health care coverage has a strong positive effect on economic growth, clinging to the opposite belief demonstrates a kind of faith-based economic policy. And that’s a bad way to run a country.

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