Why can't states run single payer systems?

Ezra's speech on state health care programs comes out against them, but neatly avoids the obvious: the reason that they all failed was that they were incredibly expensive. Moreover, they were vastly more expensive than the planners had anticipated, which knocked budgets out of whack. This in spite of the fact that the programs were very well positioned to take advantage of all of the collective bargaining, administrative, and preventative medicine efficiencies that advocates of national health care keep promising us will shave the cost of such a system. Whatever those savings are, the evidence seems to be that they are outweighed by the fact that if you make health care free, and don't ration it, people use a whole lot more than you were expecting them to. Your costs, accordingly, shoot through the roof.

TennCare didn't get into trouble because there was a recession; it got into trouble because it was godawful expensive and getting more so by the minute. Costs were projected to rise by about 75% over the next five years, and even though the federal government would have picked up almost half the tab, Tennessee couldn't afford to pay it. The failure of the various state initiatives is an instructive look at our future.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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