Curing US Healthcare, Part III: The Future; What reform could look like, by Paul Krugman, Substack, May 24, 2026
The United States, uniquely among advanced nations, fails to guarantee healthcare all its citizens. Partly as a result, it has worse health outcomes than comparable countries, including substantially lower life expectancy. Perversely, the U.S. delivers these poor results while spending much more per person on healthcare than anyone else. …
Today’s primer is the third and final in a series. …
The United States, alone among advanced nations, has failed to create a system of universal healthcare for its citizens. We also have uniquely high healthcare costs. However, it wasn’t until the 1980s that the U.S. system truly stood out for its poor performance.
In 1980 US life expectancy was already slightly below that in other advanced nations, a fact that was often greeted with incredulity when stated in political debates) but the gap was less than a year. The gap in life expectancy is now more than 4 years. …
US healthcare spending in 1980 was already higher than spending other wealthy countries, but the gap was modest — about 1.5 percent of GDP. By 2010, however, the gap had widened to more than 6 percent of GDP, although it has narrowed slightly since then. …
It’s true that our relative performance improved after the enactment of the Affordable Care Act: The percentage of Americans without health insurance declined substantially, while the rate at which costs were rising slowed sharply. But the U.S. system under Obamacare, the result of difficult political compromises, remained awkward and jerry-rigged. …
And now, under Trump II and Republican control of Congress, even the gains since 2010 are under severe assault.
Looking forward, if MAGA is driven from power in 2026 and 2028, Democrats will have a chance to repair the damage. But times have changed: they should not settle restoring the status quo as it existed in 2024. Post-MAGA, Democrats can and should aim for a more comprehensive healthcare reform with the aim of achieving universal coverage.
Let me not be coy here about what will be achievable. Given the realities of American money-driven politics, I believe that a single-payer system — rather than either direct government healthcare provision or regulated private-sector competition — is therefore most likely to succeed in achieving universal healthcare at acceptable cost. Rather than imposing a single-payer system and eliminating private-sector coverage, U.S. policymakers should offer Americans the right to buy into government health coverage – the so-called “public option”.
Government healthcare coverage like the public option has significant advantages of private-sector coverage: much lower administrative costs for patients, doctors and hospitals, along with elimination of the profit-making incentives of denial of care or the padding of bills for government compensation. Over time it is likely that the public option will dominate as Americans will voluntarily shift to it and away from private-sector coverage. But for obvious political reasons, private insurers should be outcompeted rather than forcibly shut down. And if they can, in fact, compete with public option on a level playing field, that’s OK too.
… The fact that many other countries manage to provide universal healthcare, while spending much less than the U.S. does, is really helpful for guiding reform here in the U.S. Healthcare isn’t one of those policy issues where nobody knows what will work and reform must rely on untested theories. On the contrary, the world has abundant experience with systems that out-perform what we have, and we can use other nations’ experiences to construct a better system for America. …
Americans over 65 have lived under a single-payer healthcare system — standard Medicare — for 60 years. Tens of millions more are covered by Medicaid. …
Longtime readers may recall that this was not my position in 2009-10, …
But it’s now 2026, and the political landscape has changed in ways that arguably puts fundamental reform in reach. …
Another way in which the political landscape has changed in a way that is favorable for reform is the huge public backlash against the insurance industry. …
I still believe that it would be a political mistake to simply impose single-payer, requiring Americans to give up private insurance. Buying off the insurance industry is much less important than it was in the past, but it’s still difficult to sell people on giving up what they have in favor of something else, even if the replacement would better.
Americans now dislike insurance companies far more than they did in the past. But most people with private insurance still say that they are satisfied with their coverage although not as satisfied as Americans covered by Medicare:
This suggests that an attempt to push people into Medicare-for-all would run afoul of concerns about change.
But it would be much less controversial, I believe, to offer a public option — allowing Americans, including employers providing insurance to their employees, to buy into Medicare-type system. Many people surely would avail themselves of that option. And if they like what they get, which they probably would, we could transition over time a single-payer system without forcing Americans into it. …
Comment:
By Jim Kahn, M.D., M.P.H.
Dear Prof. Krugman:
I was so pleased to read your endorsement of single payer health insurance for the US, based on its excellent performance in other nations. Lower costs and longer lives can happen here.
That said, I respectfully offer several refinements, in the interest of realizing the single payer gains.
(a) A “single payer” is, and must be, singular. The current “single payers” that you describe (i.e., Medicare and Medicaid) differ in critical ways from a true single payer as implemented in other nations. For example, even though Medicare covers almost all seniors, traditional fee-for-service Medicare is complicated by coinsurance (Medi-Gap) and Medicare Advantage has a central role for private insurers. For both, cost-sharing is high. These factors introduce complexity for patients, versus simplicity in any real single payer system. And for providers, even Traditional Medicare is just one payer among many, contributing to a billing-and-insurance-related administrative burden of fully 10% of revenue.
(b) A public option would provide some efficiency (eg no profits) versus private insurance. However, if it worked reasonably well, it would select for enrollees most needing health care – that is, more expensive than average. Assuming that costs need to be covered by premiums, this would mean higher premiums, amplifying selection effects, and so on in a downward spiral. Private insurers would exacerbate this, offering plans to encourage sicker patients to migrate to the public option. If this public option were part of Medicare, patients would face its cost-sharing challenges. Meantime, providers would continue to suffer under the complexity of a multi-payer system. Thus, the hoped-for transition to full single payer would serve only to prove (falsely) that “single payer can’t work in the US”. Perhaps it would survive as one more option in the underperforming US health insurance mess.
(c) Let’s learn the proper lessons from single payer nations: To simultaneously achieve equity & efficiency means adopting one insurance plan for everyone, with identical benefits, payments, and formulary. And minimal cost-sharing. In other words, let’s save 10% of costs via administrative streamlining and use those savings to cover everyone for all needed health care.
Those of us advocating over 30 years for single payer welcome you to this just cause.
Sincerely, Jim Kahn
https://healthjusticemonitor.org…
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