Caught in a proverbial whirlwind of presidential politics, today’s complicated Medicare-for-all debate now focuses on who will pay for it and how. Some candidates say, perhaps grudgingly, that taxes will have to go up for the middle class. Others say no, heavy taxes are only needed for the wealthy and especially for corporations. Some say private health care insurance will become illegal; others say there will be private and public alternatives but that everyone will be covered.As the debate intensifies, the how-and-who question becomes ever more complicated. Even the most dedicated policy wonks and candidates seem hard-pressed to provide a coherent answer. It’s rather strange that no one has introduced the Swiss health care experience into the debate. It’s also strange that we rarely hear mention of the U.S. experience with automobile collision liability insurance, which offers useful insights.Consider the Swiss approach to health care. First, every person is required by law to purchase basic health care insurance from a private insurance company, of which there are some 80 in number. The premiums vary across the 26 Swiss cantons; In 2017, the individual average payment per person was $450 per month. Any payment in excess of 8 percent of income was tax deductible.Once insured, the policy holder has it for life, at the original annual premium, and can go to any doctor in Switzerland. There aren’t many impoverished Swiss, but they receive a state subsidy that pays for the insurance. The Swiss also have taxpayer-supported emergency room services, making it something of a blended system.Of course, the United States isn’t Switzerland, not by a long shot. In 2017, the Swiss population stood at 8.4 million people. Swiss per-capita GDP was just over $80,000, compared with just under $60,000 here. In 2014, Switzerland had just a half-million people living under the poverty line, or 6.6 percent of the population. In the United States, the 2014 share was 14.8 percent. It’s an exceptionally wealthy, smaller country.Even so, some version of the Swiss health care approach may deserve consideration. After all, it works, at least in the eyes of the Swiss people. And rather than a one-sized-fits-all approach, the program is loaded with opportunities for people to pick and choose coverage from private firms that have to compete to satisfy patients.
As far as overall costs, in 2017, Switzerland spent $8,009 per capita for health care, second highest among the 36 Organisation for Economic Co-operation and Development countries. The United States was number one, at $10,224, or about 28 percent more than the Swiss.
Now, what does this have to do with the U.S. approach to automobile liability insurance?
Think about how people are compensated when they and their property are harmed in auto collisions. Do we have a national auto insurance plan? A system paid for with taxes so that everyone gets covered? High insurance taxes for rich people and no tax at all for the poor?
No. Our auto insurance system—like the Swiss health care program—is determined by each of the states.
47 of our 50 states require those who own an automobile to purchase insurance coverage from private providers. The required coverage varies, and people in each state can choose the insurance they will purchase. Three states—Arizona, New Hampshire, and Virginia—do not require coverage, but heavily incentivize people to buy it in other ways.
Somehow, it works! And there is no national debate about how to deal with the auto insurance crisis. Maybe it is time for one of our aspiring presidential candidates to refresh the health insurance debate. Health care might be a different animal, but not so different that we can’t pay attention to a few lessons that are right in front of us.
Bruce Yandle is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business and Behavioral Science.
