The U.S. Health Insurance System Is Already Mostly Socialized

 It may surprise many right-wingers who profess to hate "socialized medicine", but the U.S. health insurance system is already mostly socialized. Economist Paul Krugman explains:

A system under which the government would pay almost all medical expenses. Isn’t that socialism?

Well, if that is the criterion then much of U.S. healthcare is already socialist. In fact, the government’s role is so large that U.S. healthcare is better described as partially privatized socialism than as anything resembling a free market.

Let’s start with the raw numbers on health insurance, which pays the bulk of Americans’ medical expenses. Americans receive health insurance either from private companies or from public programs, overwhelmingly Medicare and Medicaid.

While a majority of Americans with health insurance get it from private companies, well over 100 million of us are covered by government programs instead. And these government programs pay more total dollars for medical bills than the private insurers do.

Why do government programs that cover a minority of the population account for a majority of health insurers’ outlays? Mainly because Medicare covers seniors, and we’re expensive. Also, while Medicaid covers many younger Americans, disabled and elderly beneficiaries account for most of its spending.

Even by the raw numbers, then, U.S. health insurance looks as much public as private. But that understates the government’s role: Private health insurance in the U.S. is both highly regulated and heavily subsidized.

This is obviously true for the insurance coverage purchased by tens of millions of Americans through the exchanges established by the Affordable Care Act. But employment-based health insurance, which covers 161 million Americans, is far more of a government creation than most people realize. For employment-based insurance exists largely because of huge implicit government subsidies that come with major strings attached.

Here’s how that works. If your employer pays you $10,000, that’s taxable income. But if your employer pays $10,000 toward a company health insurance plan that meets certain criteria, it isn’t taxable. That’s a huge effective subsidy, running at more than $300 billion a year. Take that subsidy into account, along with the more than $100 billion per year spent subsidizing policies purchased under the ACA, as well as the outlays on Medicare and Medicaid, and net effect is that the government pays for more than two-thirds of Americans’ health insurance.

Granted, there are strings attached. Roughly speaking, employment-based health plans can’t discriminate based on medical history — that is, they can’t deny coverage to employees with pre-existing conditions — and they also can’t offer the plans only to highly compensated employees — a health plan that is only for the C-suite is considered taxable income.

So given the restrictions of the federal tax code, employer-based health insurance is a lot like Obamacare, which also prohibits discrimination based on medical history and provides subsidies to make insurance affordable to lower-paid workers. The fact is that virtually all of private healthcare insurance is already well under some form of government control through regulation and tax subsidies. . . .

 If Medicare is socialism, then the whole U.S. health insurance system, with the government paying most of the bills and placing conditions on private insurers, is almost equally socialist. If you insist on calling any program the government pays for and regulates socialist, then U.S. healthcare would best be described as a partially privatized form of socialism.

And one must ask, what is the point of the part that is privatized? Do private insurers add anything positive? Or are they simply parasites, skimming off money that could have been paying for care?

The case for viewing insurers as parasites is strong. Many Medicare benefits are now delivered via Medicare Advantage, that is, plans paid for by the government but run through insurance companies. MedPAC, an independent advisory commission, estimates that last year Medicare Advantage plans were overpaid by $84 billion, thanks to practices such as “upcoding,” in which patients’ health problems are overstated to get larger sums from Medicare.

Assessing the waste from employer-based insurance is harder, but most evidencesuggests that private insurers have substantially higher administrative costs than Medicare does. Furthermore, the complexity of private insurance, with multiple payers all trying to deny care when they can, is a huge burden both on providers — doctors, nurses, and hospitals — and on patients.

What do private insurers offer to compensate for these costs? One must go through intellectual contortions to avoid the conclusion that they are, in fact, parasites.

Which brings me to El-Sayed. In supporting Medicare for All, he’s basically calling for an end to the partial, parasitic privatization of a healthcare system that is already hugely dependent on public funding. When one looks at it that way, it’s not at all a radical proposal. . . .

 The political calculus may very well have shifted since the 2000s, as Americans are fed up with a system of unaffordable premiums, rampant claim denials, and byzantine claim administration. Moreover, funding healthcare insurance through taxation would allow for a much more progressive distribution of the cost. That is, compared to the present system, middle-income households would pay less as high-income households would pay more. And the U.S. would stop wasting large sums on pointless administrative costs.

So let’s be clear: El-Sayed’s healthcare platform is perfectly reasonable on the merits of cost, fairness and health efficacy. And with private insurers never more hated, while millions of Americans are losing their health insurance, 2026 may be its time.

Voters Don't See Most Popular Democrats As Socialists

The chart above reflects the results of the Economist / YouGov Poll -- done between July 17th and 20th of a nationwide sample of 1,432 registered voters, with a 3.2 point margin of error.

Don't Fear The "S-Word" - It Just Means An Affordable Life For Everyone

The following is part of an excellent post by Thom Hartmann at The Hartmann Report: 

On Tuesday night, the establishment wing of the Democratic Party got a message it would prefer to pretend it didn’t hear. In New York, Mamdani-backed progressives swept the congressional primaries, ousting two sitting Democratic congressmen and taking an open seat in a single evening. . . .

The corporate press and just about every Republican in the country will tell you these candidates are “socialists,” and they’ll spit the word the way you’d say “arsonist.” A little history clears the fog.

When a young public defender in upper Manhattan or a state assemblywoman in Brooklyn calls herself a democratic socialist today, she isn’t talking about Havana or the old Soviet Politburo (the way Republicans and much of the press want you to think). . . .

Strip away the scare word and what’s left is far more truly and anciently American than frightening: a country where a person who works forty hours a week, no matter how complicated or how humble that work might be, can afford a home and a car, take the family on a vacation every year, put the kids through school and college, see a doctor without going bankrupt, and retire with dignity.

That’s the entire “radical” program that Republicans, corporate Democrats, and our billionaire oligarchs are so flipped-out about.

Americans have wanted those things for a very long time. More than a hundred and twenty years ago, Teddy Roosevelt stood up and called it the Square Deal: a fair shot for the worker, the consumer, and the “honest businessman” against the trusts and the railroad barons who’d swallowed the economy whole.

Franklin Roosevelt built the scaffolding of it with the New Deal, Lyndon Johnson finished the second story with the Great Society, and for about three decades we actually had it. The middle class in the postwar years grew faster and richer than any middle class in the history of the world. By 1980, it was two-thirds of us with a single paycheck (it’s about 41% now, and takes two paychecks to get there). . . .

And then it was taken apart on purpose. As I lay out in The Hidden History of American the American Dream, the dismantling of that middle class wasn’t an unfortunate side effect of globalization or robots or some impersonal economic weather. It was a deliberate Republican neoliberal project that began with Ronald Reagan imitating Maggie Thatcher and following Heritage’s A Mandate for Leadership in 1981 and has been carried forward by both parties ever since.

The tools were straightforward. Going back to Taft-Hartley in 1947 and the spread of “right-to-work-for-less” laws Republicans and their corporate funders handed states and giant companies the power to strangle unions, and a worker without a union is a worker without leverage.

 

They froze the federal minimum wage at $7.25 an hour, where it has sat untouched since 2009. America’s oligarchs fought, decade after decade, to keep the United States the only wealthy nation on Earth without national healthcare, herding us instead into the arms of insurance conglomerates and hospital and physician monopolies, more and more of them now owned by private equity firms that treat a sick patient as a line item to be squeezed.

The result, as the nonpartisan RAND Corporation recently calculated, is that roughly $79 trillion has been pumped upward from the bottom ninety percent of Americans into the money bins of the morbidly rich top one percent since Reagan, and the middle class has sunk below 50% of us and is hanging on — now requiring two paychecks — by its fingernails.

In that same span the share of national income going to the bottom ninety percent fell from about two-thirds to less than half, we’ve watched the largest upward transfer of wealth in the history of the American republic all the way back to George Washington, and every dollar of it was a choice some oligarch or his wholly-owned politician made. . . . .

Republicans have to scream “socialism” at any candidate whose actual platform is “rent you can afford” and “a doctor you can see when you need to without going broke.” They can’t argue the economics (and their billionaire donors won’t let them even if they wanted to), so they change the subject to fear.

But the American people aren’t buying the GOP’s oligarchic bullshit anymore. The GOP got crushed in last year’s off-year elections on the simple issue of affordability — which I read as blowback against oligarchy. . . .

The Democratic base is trying hard to pull its party back toward its FDR and LBJ roots. . . .

What these voters keep saying they want is fighters against neoliberalism, fascism, and a return to the New Deal and Great Society.

The Republican Party, meanwhile, is bowing and scraping lower and lower to Trump, Project 2025, and their neofascist agenda. . . .

After forty-five years in the wilderness, Americans are reaching back for the Square Deal that Teddy Roosevelt promised and the New Deal and Great Society that FDR and LBJ delivered, and no amount of red-baiting about Havana is going to talk them out of it. 

Democrats must choose to kick the oligarchs out and let the people back in.

Capitalism Needs A Social Democracy To Benefit All Citizens

Donald Trump has been unable, so far, to find any charge that works against Kamala Harris. He's tried crazy nicknames. He's tried intentionally mispronouncing her name. Nothing has worked. Now he's going for the ridiculous - calling her a "communist".

It isn't even remotely true, but that has never bothered Trump in the past. He will say anything, even an outrageous lie, to get what he wants.

The truth is that Harris is a social democrat. She believes that capitalism must be tempered with regulations and social programs to benefit all citizens.

An unregulated capitalism with government social programs will not work. It will eventually results in a few rich people, a tiny management middle class, and the huge majority of citizens stuck in poverty.

Republicans want you to believe that freeing the rich capitalists from government regulation will allow them to "trickle down" much of their wealth to the rest of the population, thus eliminating the need for any social programs. It's a crazy idea, and it's never worked.

The rich don't want to share their wealth, even though they gained it on the backs of working people. They will always (as we have seen in the past) pay as little as possible to the workers creating their wealth - even if it leaves those workers in poverty.

To prevent this, there are three things needed - regulations, government social programs, and labor unions. These three entities assure that production is shared with everyone and not just hogged by those at the top.

That is not communism. It's not even socialism. It's just common sense capitalism. It allows the rich to get and remain rich, while ensuring that others have what they need to survive in the economy.

Wall Street Opposes Socialism (Unless It's For Them)

 

The giant financial institutions don't like the idea of government helping ordinary citizens. They call that socialism. But they love for the government to bail them out of trouble and provide loopholes and other financial advantages. In other words. They believe socialism should be reserved for Wall Street!

Here's part of what Robert Reich says about this ridiculous view:

The stock market is gyrating wildly in light of Putin’s aggression in Ukraine, but Wall Street traders are doing just fine. Bad news is good news for traders who make money off volatility.

After all, in the year of Delta and Omicron, climate chaos, Trump Republican attacks on democracy, bitter divisiveness, a calamitous exit from Afghanistan, and accelerating inflation, the Street’s biggest banks have reaped record profits. Bonuses are through the front Porsche. Hundreds of traders have racked up seven and eight-figure bonanzas. Morgan Stanley paid out $35 million to its CEO, James Gorman. Goldman Sachs, $35 million to David Solomon. Bank of America, $32 million to Brian Moynihan. Citigroup, $22.5 million to Jane Fraser. And, not the least, JPMorgan, which paid out $34.5 million to Jamie Dimon — plus a retention bonus of $50 million.

Dimon has become a spokesman for the Street and one of the most influential CEOs on Capitol Hill. His public statements are a barometer for what America’s financial oligarchs are thinking.

They are not fretting about what the Fed’s incipient fight against inflation is likely to do to jobs and wages. They’re not worried about the shrinkage of America’s middle class or the precariousness of the working class and poor. They are unsettled by what they consider creeping socialism. In an annual letter to JPMorgan shareholders, Dimon warned that socialism would be a “disaster for our country” because it produces “stagnation, corruption and often worse.”

It should be remembered that Dimon was at the helm in 2008 when JPMorgan received a $25 billion socialist-like bailout after it and other Wall Street banks almost tanked because of their reckless loans. Instead of letting the market punish the banks (which is what capitalism is supposed to do), the Obama administration bailed them out and eventually levied paltry fines which the banks treated as the cost of doing business. According to the Justice Department, JPMorgan acknowledged it had regularly and knowingly sold mortgages that should have never been sold. (Presumably this is where the “stagnation, corruption and often worse” come in.)

Millions of Americans lost their homes, savings, and jobs in the financial crisis. But neither Dimon nor any other top Wall Street executive was held accountable. If this isn’t socialism for rich bankers, what is it?

America’s five largest banks, including Dimon’s JPMorgan, now control almost half of all deposits, up from 12 percent in the early 1990s. Because of their size, these banks are now considered “too big to fail.” This translates into a hidden subsidy of some $83 billion a year — the total estimated discount that creditors and depositors give banks whose solvency is effectively guaranteed by the government. More socialism for rich bankers.

Dimon was instrumental in getting the big Trump tax cuts through Congress. They have saved JPMorgan and the other big banks over $50 billion so far.

But Dimon and JPMorgan are doing their bit to make sure average Americans experience the full consequences of harsh capitalism. Although federal regulators waived overdraft fees for big banks when the economy took a dive in 2020, Dimon and JPMorgan refused to waive overdraft fees for borrowers struggling to make ends meet amid pandemic lockdowns. Dimon and JPMorgan reaped $1.46 billion in overdraft fees — the most of any big bank. . . .

Dimon isn’t really concerned about widening inequality. He’s not really concerned about socialism, either. Nor about any of the other crises hitting America, which expose Americans to more economic uncertainty and insecurity than the citizens of any other advanced economy. His real worry is that one day America might end the type of socialism he and other denizens of Wall Street depend on – bailouts, regulatory loopholes, subsidies, and tax breaks.

About 38% of Americans Have A Positive View Of Socialism

 

These charts are from a recent Gallup Poll -- done between October 1st and 19th of a national sample of 823 adults, with a 4 point margin of error.

The Real Socialism In The United States Is Corporate Welfare

The Republicans love to whine about socialism. They would have you believe that everything the Democrats try to do is socialism. It's not. But the crazy thing is that there is a brand of socialism in this country created and sustained by the Republicans -- a socialism for the rich and corporations.

Here's how Robert Reich describes it: 

You may have heard Republicans in Congress rail about how the Democrats’ agenda is chock-full of scary “socialist” policies. 

We do have socialism in this country — but it’s not Democrats’ policies. The real socialism is corporate welfare. 

Thousands of big American corporations rake in billions each year in government subsidies, bailouts, and tax loopholes – all funded on the taxpayer dime, and all contributing to higher stock prices for the richest 1 percent who own half of the stock market, as well as CEOs and other top executives who are paid largely in shares of stock. 

Big Tech, Big Oil, Big Pharma, defense contractors, and big banks are the biggest beneficiaries of corporate welfare.

How? Follow the money. These corporations and their trade groups spend hundreds of millions each year on lobbying and campaign contributions. Their influence-peddling pays off. The return on these political investments is huge. It’s institutionalized bribery. 

An even more insidious example is corporations that don’t pay their workers a living wage. As a result, their workers have to rely on programs like Medicaid, public housing, food stamps and other safety nets. Which means you and I and other taxpayers indirectly subsidize these corporations, allowing them to enjoy even higher profits and share prices for their wealthy investors and executives.

Not only does corporate welfare take money away from us as taxpayers. It also harms smaller businesses that have a harder time competing with big businesses that get these subsidies. Everyone loses except those at the top. 

It’s more socialism for the rich, harsh capitalism for the rest. 

It should be ended. 

Most Want A Fairer Economy (But Don't Call It Socialism)

 

The charts above reflect the results of a new Axios / Momentive Poll -- done between June 11th and 15th of a national sample of 2,309 adults in the United States. (no moe given).

It shows that the word socialism still scares most Americans (although younger Americans, between 18 and 34, view it more positively). Overall, about 41% view it positively and 52% negatively. 

But that does not mean they don't like the policies pushed by socialists and progressive. About 58% say the economic system favoring the rich is a bigger problem than over-regulation of the marketplace, while only 36% disagree.

And a whopping 66% say the federal government should pursue policies to reduce the wealth/income gap between the rich and the rest of the country, while only 30% disagree.

In other words, most Americans like socialist policies, as long as you don't call them socialism. Too many years of right-wing propaganda has a majority scared of the word.

Americans Afraid Of Socialism (But Not Socialist Programs)

The charts above reflect the results of the recent Economist / YouGov Poll -- done between May 10th and 12th of a national sample of 1,500 adults (including 1,175 registered voters). The margin of error for adults is 3.2 points, and for registered voters is 3.4 points.

I found this interesting. Americans would overwhelmingly approve of giving all adults who don't make $120,000 a year about $2000 a month while the Coronavirus pandemic is still raging through the country. But in that same poll, the respondents overwhelmingly disapproved of socialism.

That's strange, because the $2000 a month payments are clearly a socialist program.

It shows that most Americans don't understand just what socialism is. They think it's a kind of government (like Stalin's dictatorship in Russia or Mao's dictatorship in China). It is NOT! It is an economic system, and can exist under a democratic form of government.

The right wing has been pretty effective is making Americans scared of the word "socialism" through decades of propaganda. But in spite of being scared of socialism in general, Americans actually like many socialist programs.

Republicans opposed the creation of Social Security and called it socialism. They were right, but the American people wanted it, and it has turned out to be an effective and very popular program.

Republicans opposed the minimum wage, calling it socialism. They were right, but the American people wanted it, and still overwhelmingly support it.

Republicans opposed Medicare, calling it socialism. They were right, but the American people wanted it, and it is an effective and very popular program.

Republicans oppose universal healthcare, calling it socialism, and have so far been able to block it. But poll after poll show the American people want it (in spite of it being a socialist program).

I could go on, but you get the idea. Americans may be afraid of the word socialism (because they don't understand it), but they are not afraid of socialist ideas and programs. They actually want a country that has an economy fair to everyone -- not just the rich and corporations.