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Thursday, September 19, 2019

Should Americans Get to Choose Their Health Care? The Question That Divides Democrats

Sen. Bernie Sanders and Sen. Elizabeth Warren seek to abolish private health insurance and force Americans into a single-payer system, something other Democratic candidates oppose.

Senate Democrats [CC BY 2.0 (]

Twenty-five years ago, Sheena Iyengar was living with a family in Japan while completing her dissertation. On her first day out in Kyoto, she went to a restaurant and ordered a cup of green tea with sugar.

“One does not put sugar in green tea,” the waiter told her.

Iyengar thanked him but explained that she liked her tea sweet.

“One does not put sugar in green tea,” the waiter patiently repeated.

Most Democrats appear to understand the importance Americans place on personal choice.

Iyengar told the waiter she knew it was not customary for the Japanese to take sugar with their green tea, but she’d like to have sugar in her green tea. The waiter excused himself and returned with his manager. A conversation ensued. The manager left and returned a moment later.

“I am very sorry. We do not have sugar,” he said.

Iyengar said fine, then ordered coffee. It was promptly brought to her … with sugar.

Democrats Debate Health Care Choice

Iyengar, the best-selling author of The Art of Choosing and a professor at Columbia Business School, related her experience in Japan during a 2010 Ted Talk. She shared the story to illustrate how important choice is to Americans in contrast to other cultures.

The issue of choice was at center stage in ABC’s presidential debate coverage last week. Democratic candidates agreed on a host of issues, including their desire to expand government-sponsored health care. But there was sharp disagreement on how this should happen.

On one side, there were Sen. Bernie Sanders and Sen. Elizabeth Warren, both of whom seek to abolish private health insurance and force Americans into a single-payer system, Medicare for All.

There is a growing sense, particularly among intellectuals, that Americans suffer from too many choices.

The other presidential candidates, with the exception of New York City Mayor Bill de Blasio, disagree. These candidates want to expand government health care, but they oppose dismantling the private system through fiat and banning the sale of private health insurance.

This fundamental difference deserves exploration, yet the issue had received relatively little attention until Sen. Amy Klobuchar of Minnesota brought it to the forefront of discussion during Thursday’s debate.

“When it comes to health care, and when it comes to premiums, I go with the doctor’s creed, which is do no harm,” said Klobuchar, a long-time attorney, in response to a question from George Stephanopoulos.

And while Bernie wrote the bill, I read the bill. And on page eight of the bill, it says that we will no longer have private insurance as we know it. And that means that 149 million Americans will no longer be able to have their current insurance.

Klobuchar is not wrong. Sec. 107 of the “Medicare for All Act of 2017” states that federal law would prohibit “a private health insurer to sell health insurance coverage” or “an employer to provide benefits for an employee.”

This position appears to be a bridge too far for the vast majority of Democrats seeking the Oval Office.

“I don’t think that’s a bold idea. I think that’s a bad idea,” Klobuchar continued. “And what I favor is something that Barack Obama wanted to do from the very beginning: a public option.”

Pete Buttigieg, the mayor of South Bend, Indiana, and the youngest candidate in the field, agreed.

“The problem, Senator Sanders, with that d*mn bill that you wrote, and that Senator Warren backs, is that it doesn’t trust the American people. I trust you to choose what makes the most sense for you, not my way or the highway,” Buttigieg said.

I propose “Medicare for All Who Want It.” We take a version of Medicare, we make it available for the American people. And if we’re right, as progressives, that that public alternative is better, then the American people will figure that out for themselves. I trust the American people to make the right choice for them, why don’t you?

Sen. Kamala Harris of California initially came out in support of the Sanders bill. She has since backed off, explaining she doesn’t want to deprive Americans of choice.

“[My plan] is about offering people choice, not taking that from them,” Harris said.

So under my Medicare for All plan, people have the choice of a private plan or a public plan. Because that’s what people want. And I agree we shouldn’t take choice from people.


Americans Want Choice 

“Free to choose,” the title of libertarian economist Milton Friedman’s famous book and television program, might sound like an odd mantra from progressive candidates. Yet it was nonetheless on full display.

Most Democrats appear to understand the importance Americans place on personal choice. Obamacare was costly and intrusive, but at least it maintained some choice. People were not obligated to participate, and private insurance was not abolished. It was a public option.

Iyengar, who was denied sugar for her green tea, discusses the power of choice in America.

“Americans seem to believe that they’ve reached some sort of pinnacle in how they practice choice,” she says.

They think that choice, as seen through the American lens, best fulfills an innate and universal desire for choice in all humans.

If one senses a hint of derision in these words, it’s because there is a growing sense, particularly among intellectuals, that Americans suffer from too many choices. That’s a theme in Iyengar’s research, and she’s not alone.

On NPR, Malcolm Gladwell discussed the “endless treadmill of choice” we face. The psychologist Barry Schwartz, in his famous Ted Talk “The Paradox of Choice,” argues that an abundance of choices is leaving Americans paralyzed and dissatisfied. The Slovene philosopher Renata Salecl has delivered talks on Western culture’s “unhealthy obsession with choice.”

Research does suggest there are disadvantages to having too many choices. Iyengar’s research, for example, shows that people sampling jam at food stands were 10 times more likely to purchase a jar if there were six flavor options instead of 24. Similarly, Schwartz presents evidence showing that participation in voluntary retirement plans goes down if potential enrollees are presented with too many options.

Choice Empowers Us

Making choices all the time can feel exhausting, which is why some savvy retailers, like Costco, have made offering fewer choices part of their sales strategy.

But the truth is that generally speaking, choice empowers. It is the primary feature of capitalism and integral to voluntary exchange, which, Leonard Read observed, “unseats Napoleonic behavior—all forms of authoritarianism—and enthrones the individual.”

One can argue that our free market system suffers from an excess of choice. Most of us, at one time or another, have probably felt like Jeremy Renner’s character in The Hurt Locker trying to select a box of cereal.

Consider, however, that even if one accepts an abundance of consumer options as a “flaw” of capitalism, it’s infinitely superior to what’s found in centrally planned economic systems: the absence of choice (and sometimes basic consumer products).

The centrally planned system of the Soviet Union is remembered today as an example of a shortage economy, a term coined by economist János Kornai. Citizens of the Soviet Union didn’t have to struggle with choices because there was little to choose from. There was a chronic shortage of basic consumer goods, from shoes and fruits to cars and toiletries.

It wasn’t that things weren’t being produced in the Soviet Union. They were. The primary problem, the economist Thomas Sowell pointed out, was that market forces were stifled.

There were many products which remained unsold in stores or in warehouses in the Soviet Union, while there were desperate shortages of other things.

Americans today might be frustrated that they have to choose from a dozen different brands of toilet paper, but at least we can count on easy access to toilet paper. This was not the case in the Soviet Union, which is why international travelers were told to bring their own.

A Decision on Choice

The American health care system has its flaws. It’s expensive, complicated, and suffers from a pricing system that is largely opaque and from which patients are far removed.

Yet consumers still have choice. If you don’t like your company’s insurance plan, you can shop for another. If your insurance company increases your rates, you can say goodbye—and there’s no penalty. The mere presence of choice works in favor of consumers.

“When people have no choice, life is almost unbearable,” says Schwartz.

Americans must decide if they prefer choice, as exhausting as it can be, or a government monopoly of its health care system.

Barry Schwartz, the aforementioned author of Paradox of Choice, argues that Americans are suffering from too much choice. He notes, however, that this is not the worst-case scenario.

“When people have no choice, life is almost unbearable,” says Schwartz.

  • Jonathan Miltimore is the Senior Creative Strategist of at the Foundation for Economic Education.