• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

PNHP

  • About PNHP
    • Mission Statement
    • Board of Directors
    • National Office Staff
    • Speakers Bureau
    • Local Chapters
    • Students for a National Health Program
    • Contact Us
    • Privacy Policy
  • About Single Payer
    • What is Single Payer?
      • Policy Details
      • FAQs
      • History of Health Reform
      • Información en Español
    • How do we pay for it?
    • Physicians’ Proposal
      • Full Proposal
      • Supplemental Materials
      • Media Coverage
    • The Medicare for All Act of 2025
  • Take Action
    • Moral Injury and Distress
    • Medical Society Resolutions
    • Recruit Colleagues
    • Schedule a Grand Rounds
    • Letters to the Editor
    • Lobby Visits
    • Organizing in Red Districts
  • Heal Medicare
    • HealMedicare.org
    • Sign our Petition
    • Take our Survey
    • Medicare Disadvantage
    • Stop REACH
  • Kitchen Table Campaign
    • Medicare Disadvantage
    • Maternal Mortality
    • Mental Health Care
    • Health Care Voters Guide
    • COVID-19 Endangers Health Workers
    • COVID-19 Exacerbates Racial Inequities
    • Public Health Emergencies
    • Rural Health Care
    • Racial Health Inequities
    • Surprise Billing
  • Latest News
    • Sign up for e-alerts
    • Medicare Advantage harms report
    • Members in the news
    • Health Justice Monitor
    • Articles of Interest
    • Latest Research
    • For the Press
  • Member Resources
    • 2024 Annual Meeting Materials
    • Member Interest Groups (MIGs)
    • Newsletter
    • Slideshows
    • Materials & Handouts
    • Kitchen Table Campaign
    • COVID-19 Response
      • Why we Need Medicare for All
      • PNHP’s 8-point plan
      • New Study: Perils and Possibilities
      • Emergency COVID-19 Legislation
      • Kitchen Table Toolkit
      • Take Action on COVID-19
      • Telling your COVID-19 story
      • PNHP members in the news
    • Events Calendar
    • Webinars
    • Film Room
    • Join or renew your membership
  • Home
  • Contact PNHP
  • Join PNHP
  • Donate
  • PNHP Store

Quote of the Day

Framing health financing as wealth transfer ignores the moral imperative of social insurance

Health policy reform or wealth transfer?

Share on FacebookShare on Twitter

By Gary Galles
The Orange County Register, May 9, 2018

Americans have been fighting over health insurance reform for years. Single-payer proposals, as most recently proposed in California’s legislature, are just the latest example. However, while rhetoric has focused on how many would supposedly gain or lose insurance, wealth transfers have been the real issue. As economist Henry Aaron estimated a quarter-century ago, implementing comprehensive national health insurance would redistribute more income than any single public policy then in existence.

We know insurance is not the real issue because claimed “reforms” violate so many principles of insurance.

The price controls reform proposals incorporate are also about transferring wealth, not health insurance. My age makes my actuarial risk six times that of my students. If, as Obamacare required, I could not be charged more than three times what they were, that really forces the young to subsidize the old, explaining why Obamacare imposed penalties to force acceptance of a bad deal.

Mandating coverage of pre-existing conditions also shows “reforms” are seldom really about insurance. It doesn’t reduce people’s risk exposure, it forces others to cover costs already known to be higher and deflects the blame to insurance companies who must charge others more. Such after-the-fact possibilities are not offered in fire, automobile or life insurance. Similarly, casinos don’t let you bet once the roulette ball or dice have stopped.

In addition, if health policy was truly aimed to benefit all Americans, rather than benefiting some by pick-pocketing others, it would not have been pushed with so many lies, damned lies and statistics.

Our health insurance debate has become so contentious largely because it has allowed massive wealth transfers to be mis-represented as improving health insurance. It helped dishonestly sell Obamacare, and now portrays reducing massive theft from those government targeted to hold the bag as imposing heartless harm on others. Such mis-representation cannot generate policies that advance either Americans’ or Californians’ well-being.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research fellow of the Independent Institute, a member of the Foundation for Economic Education faculty network, and a member of the Board of Policy Advisors at the Heartland Institute.

***

Published comment:

By Don McCanne, M.D.

Wealth transfers have been the real issue? Isn’t the real issue rather ensuring that everyone has affordable access to essential health care services, as all other wealthy nations do?

We take for granted public services such as primary and secondary education, fire and police protection, public parks, highways and streets, national defense, Medicare, Social Security, the services of the National Institutes of Health, to mention a few. Most of the taxes used to fund these services are progressive to some degree – those with higher incomes pay more than those with lower incomes. Yet we do not refer to wealth transfer as being the primary policy that drives the existence of these services; it its the services themselves that are the primary public policies.

Health care stands out partly because of its very high costs. The cost of health care for the typical family of four receiving employer-sponsored PPO coverage is now $27,000 (Milliman). Median household income is now about $59,000. Although those are not identical family units, these numbers do make the general point that average-income families cannot possibly pay their proportionate share of global health care costs if they were evenly distributed amongst all of us (risk pooling).

Rather than framing this primarily as wealth transfer it should be framed as social insurance covering the health care needs of the people. If the funding were not equitable (progressive), too many would have to do without health care. The most efficient and effective methods of financing happen to be either a single payer system – an improved Medicare that covers everyone – or a national health service – socialized medicine. Most Americans would prefer Medicare for all, and would consider it their earned right, just as we consider Medicare in retirement to be our earned right rather than being primarily a government wealth transfer program.

https://www.ocregister.com…

***

Comment:

By Don McCanne, M.D.

Although it is usually not wise to repeat the deceptive rhetoric of the opponents of health care justice, it can be helpful to understand it and be able to respond when it is in your face. Professor Galles uses wealth transfer – a concept he apparently considers to be evil – to reject the concept of pooling risk for health care.

It’s really simple. Because health care needs are unequally distributed, we need to pool risk by transferring from the healthy to the infirm. Because average health care costs are beyond the means of those with average incomes we need to fund the risk pool equitably based on ability to pay.

This is a concept that is accepted throughout society. Tax-financed public services are largely funded progressively through tax policy. That is not evil, but good. It makes it possible to provide those services for everyone. We don’t suggest that individuals with lower incomes should be denied fire or police protection merely because it would results a transfer of wealth.

Galles condemns what he calls wealth transfer when it makes health care services available to those who otherwise could not afford them. Yet he remains silent on the massive wealth transfer that necessitates these public policies – the transfer of wealth from the workers whose productivity has grown the economy, to those already wealthy rentiers who provide little personal contribution other than their excess capital gained by market abuses. That’s the shameful wealth transfer that our public policies should be addressing.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Primary Sidebar

Recent Quote of the Day

  • John Geyman: The Medical-Industrial Complex...plus exciting changes at qotd
  • Quote of the Day interlude
  • More trouble: Drug industry consolidation
  • Will mega-corporations trump Medicare for All?
  • Charity care in government, nonprofit, and for-profit hospitals
  • About PNHP
    • Mission Statement
    • Board of Directors
    • National Office Staff
    • Speakers Bureau
    • Local Chapters
    • Students for a National Health Program
    • Contact Us
    • Privacy Policy
  • About Single Payer
    • What is Single Payer?
      • Policy Details
      • FAQs
      • History of Health Reform
      • Información en Español
    • How do we pay for it?
    • Physicians’ Proposal
      • Full Proposal
      • Supplemental Materials
      • Media Coverage
    • The Medicare for All Act of 2025
  • Take Action
    • Moral Injury and Distress
    • Medical Society Resolutions
    • Recruit Colleagues
    • Schedule a Grand Rounds
    • Letters to the Editor
    • Lobby Visits
    • Organizing in Red Districts
  • Heal Medicare
    • HealMedicare.org
    • Sign our Petition
    • Take our Survey
    • Medicare Disadvantage
    • Stop REACH
  • Kitchen Table Campaign
    • Medicare Disadvantage
    • Maternal Mortality
    • Mental Health Care
    • Health Care Voters Guide
    • COVID-19 Endangers Health Workers
    • COVID-19 Exacerbates Racial Inequities
    • Public Health Emergencies
    • Rural Health Care
    • Racial Health Inequities
    • Surprise Billing
  • Latest News
    • Sign up for e-alerts
    • Medicare Advantage harms report
    • Members in the news
    • Health Justice Monitor
    • Articles of Interest
    • Latest Research
    • For the Press
  • Member Resources
    • 2024 Annual Meeting Materials
    • Member Interest Groups (MIGs)
    • Newsletter
    • Slideshows
    • Materials & Handouts
    • Kitchen Table Campaign
    • COVID-19 Response
      • Why we Need Medicare for All
      • PNHP’s 8-point plan
      • New Study: Perils and Possibilities
      • Emergency COVID-19 Legislation
      • Kitchen Table Toolkit
      • Take Action on COVID-19
      • Telling your COVID-19 story
      • PNHP members in the news
    • Events Calendar
    • Webinars
    • Film Room
    • Join or renew your membership

Footer

  • About PNHP
    • Mission Statement
    • Board of Directors
    • National Office Staff
    • Speakers Bureau
    • Local Chapters
    • Students for a National Health Program
    • Contact Us
    • Privacy Policy
  • About Single Payer
    • What is Single Payer?
      • Policy Details
      • FAQs
      • History of Health Reform
      • Información en Español
    • How do we pay for it?
    • Physicians’ Proposal
      • Full Proposal
      • Supplemental Materials
      • Media Coverage
    • The Medicare for All Act of 2025
  • Take Action
    • Moral Injury and Distress
    • Medical Society Resolutions
    • Recruit Colleagues
    • Schedule a Grand Rounds
    • Letters to the Editor
    • Lobby Visits
    • Organizing in Red Districts
  • Heal Medicare
    • HealMedicare.org
    • Sign our Petition
    • Take our Survey
    • Medicare Disadvantage
    • Stop REACH
  • Kitchen Table Campaign
    • Medicare Disadvantage
    • Maternal Mortality
    • Mental Health Care
    • Health Care Voters Guide
    • COVID-19 Endangers Health Workers
    • COVID-19 Exacerbates Racial Inequities
    • Public Health Emergencies
    • Rural Health Care
    • Racial Health Inequities
    • Surprise Billing
  • Latest News
    • Sign up for e-alerts
    • Medicare Advantage harms report
    • Members in the news
    • Health Justice Monitor
    • Articles of Interest
    • Latest Research
    • For the Press
  • Member Resources
    • 2024 Annual Meeting Materials
    • Member Interest Groups (MIGs)
    • Newsletter
    • Slideshows
    • Materials & Handouts
    • Kitchen Table Campaign
    • COVID-19 Response
      • Why we Need Medicare for All
      • PNHP’s 8-point plan
      • New Study: Perils and Possibilities
      • Emergency COVID-19 Legislation
      • Kitchen Table Toolkit
      • Take Action on COVID-19
      • Telling your COVID-19 story
      • PNHP members in the news
    • Events Calendar
    • Webinars
    • Film Room
    • Join or renew your membership
©2025 PNHP