June 5, 2026
Dear Interested Readers,
Paul Krugman, Round 3
This week’s letter completes a three-part review of Paul Krugman’s series on the potential for healthcare to be a defining issue in the 2026 mid-term elections and the 2028 presidential election. Krugman published his third installment, “Curing US Healthcare, Part III: The Future, What reform could look like,” on May 24. If you want to refresh your memory on the two previous installments, I reviewed Part I in the May 1 letter and Part II in the May 8 letter.
Krugman begins Part III with a retrospective overview of our ongoing healthcare deficiencies. He reiterates that despite spending more per capita on healthcare than any other advanced economy, we have the most deficient care among our peers, and the lowest life expectancy. I think this information which may be well known to you should be repeated because I suspect that despite how often this reality appears in print, it is my sense that the majority of Americans, or at least the majority of MAGA voting Americans still don’t understand the reality, or they just don’t care as long as they are satisfied with the care they are geting or don’t think they need. Krugman’s formulation has become a shared view of our system of care among those of us who have a progressive view of our collective concerns and believe that with the expertise and resources we possess, we should be able to do much better.
The United States, uniquely among advanced nations, fails to guarantee healthcare to 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.
U.S. healthcare performance improved in terms of both coverage and cost after the Affordable Care Act, aka Obamacare, was enacted in 2010 and went into full effect in 2014. But much of what was achieved during the Obama and Biden administrations is now being unraveled by Trump II.
Today’s primer is the third and final in a series. Part I laid out the basics of healthcare policy, why universal healthcare is a desirable objective, and why some type of government intervention is essential to achieve it. Part II described how and why the U.S. adopted Obamacare and the ongoing Republican assault on its successes. In today’s primer I will discuss a possible path forward. That is, basically, what Democrats can and should try to achieve if they have unified control of the government after the 2028 election.
To reiterate what to expect in this letter, Krugman says that his objectives in Part III are to continue to put U.S. healthcare in an international perspective. He discusses what kind of system is workable in America. As an economist, he will conclude with a discussion of the “political economy” of healthcare reform as an element of a path forward. He continues his overview of our current state, adding more repetition and an obvious disdain for our failures, grounded in our shared understanding of the moment. He begins by returning to the comparison between our international peers and us.
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.
The Peterson-KFF Health System Tracker compares U.S. performance on several dimensions with a Comparable Country Average, where the “comparable countries” are Canada, Japan, and several European nations. Circa 1980 the U.S. was roughly similar to other advanced nations in both health outcomes and cost…
Krugman’s letter has several graphics, which I will describe rather than attempt to include. If you are curious and would like to see the graphics, you can click the link to his letter, which I included in the first paragraph. Many of the graphics are copied from Kaiser Foundation publications. The first graphic shows that in 1980, about the time Ronald Reagan was elected, our life expectancy was about 73 years, compared with an average of 74 years among other advanced nations. By the time Joe Biden came to office, our life expectancy of 77 and a few months was more than four years shorter than that of other nations that were economically close to us. Their life expectancy was a little over 82 years.
Just to make us cringe more, his next chart looks at the change in our healthcare costs as a percentage of GDP (he is an economist) over that forty-plus-year period since 1980, compared with what those more successful nations have spent as a percentage of their GDPs. We moved from 8% of GDP to about 18%. They moved from just over 6% to a little more than 11%. He goes on in his analysis to say:
Moreover, if we look at spending per capita rather than spending as a share of GDP, the U.S. looks even worse, because US GDP per capita is higher than in the comparator countries.
U.S. healthcare, then, has performed very poorly on a comparative basis, spending much more money than other nations yet delivering significantly worse results.
You may be tired of seeing this analysis. I am tired of it being true. I am angry that with the passage of the One Big Beautiful Bill, the situation will surely get worse before it gets better. I have just sat through two multihour strategic planning sessions at the Whittier Street Health Center (WSHC), a Federally Qualified Health Center in the Roxbury section of Boston, where the primary topic was how this valuable asset to disadvantaged populations could survive the loss of Medicaid revenue that is coming after January 1, 2027. Massachusetts is expected to see over 200,000 of its citizens lose coverage as a result of the Trump administration’s actions. Those estimates are going up, not down. I have recently heard that it is more likely to be 300,000. New Hampshire, where I live, is much smaller and doesn’t have the minority populations that Massachusetts has, but between 14,000 and 29,000 of its citizens will lose their access to care. Suffice it to say, what has been bad will get worse before there is a national election that could result in an administration that is interested in beginning the recovery work.
Krugman has an answer for you if you are wondering how to include the benefits of the ACA in this comparison to the healthcare of other advanced nations:
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. In effect, it was a complex add-on that remedied some of the failures of the pre-Obamacare system but still left U.S. healthcare both far less fair and far less efficient than it should be.
And now, under Trump II and Republican control of Congress, even the gains since 2010 are under severe assault.
I can hear you asking, “What can we hope for if MAGA is sent packing beginning in 2026 with the final victory in the 2028 elections. Krugman has anticipated that question and has an answer for you. He wants us to think bigger and not just try to get back to where the reign of healthcare terror began after the 2024 election. He quickly states a preference for a single-payer system. I have bolded the crux of his recommendation.
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 for 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 America’s money-driven politics, I believe that a single-payer system — rather than either direct government healthcare provision or regulated private-sector competition — is the reform most likely to succeed in achieving universal healthcare at acceptable cost. But rather than imposing a single-payer system and eliminating private-sector coverage, U.S. policymakers should offer Americans the right to buy into government healthcare coverage – the so-called “public option”.
I feel the necessity to make a couple of comments. First, a single payer doesn’t mean that the government owns the system, as is the case in Great Britain. Obama wanted a public option, and the possibility of one has been widely debated among Democratic presidential hopefuls since 2016. If it were not for the intrangeicence of Senator Joe Liberman of Connecticut, an independent caucusing with Democrats, we would have had a public option in the original ACA. Krugman next begins to explain why the “public option” is his preference as a first step in recovery:
Government healthcare coverage like the public option has significant advantages over 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 the public option on a level playing field, that’s OK too.
I like his hope that a public option will “outcompete” commercial health insurance, and he is willing to wait for that to happen rather than use a law to abolish commercial health insurance in “one fell swoop.” He continues with his reasoning:
To explain why I recommend the public option, I need to address two topics: one, what is likely to work in policy terms; and two, how the political landscape has changed since the adoption of Obamacare.
What kind of healthcare system is workable in America?
In the first installment of my series on U.S. healthcare, I explained that there are three basic ways a nation can ensure that healthcare is available to all its citizens.
- The government can provide healthcare directly by paying for and running the delivery of healthcare — so-called “socialized medicine”.
- The delivery of healthcare is left to the private sector but the government provides health insurance to pay for it — the so-called “single payer” system.
- Both the delivery of both healthcare and insurance are left to the private sector, but private insurers are regulated and cross-subsidized in order to guarantee coverage for all. Obamacare fits into this last category. All three approaches have been applied in the modern world — and all three are workable. Furthermore, we have partial versions of all three approaches operating in the United States right now, serving various segments of the population.
He illustrates his point with another chart showing that, with the exception of Britain, our VA, and Sweden, in most advanced nations, the government pays private providers but does not employ them. He lets the success of these nations stand as proof that we could do better with universal coverage supported by government financing. We are the exception, and the sad truth is that there will be resistance to change from those who will lose the ability to make huge profits from providing us with an expensive and inferior system of care. He explains:
That said, America is exceptional — and when it comes to healthcare, that exceptionalism is overwhelmingly negative for the American people. To be blunt: Any effort to reform U.S. healthcare must take into account the way big money distorts both politics and policy to a greater extent than in any other wealthy nation. Generations of dysfunctional healthcare policy in America have created powerful interest groups that will attempt to corrupt any effort at reform.
At this point, he goes through each option as he begins to hone in on why he sees the public option as the next wise step. He reviews once again why “socialized medicine” like Britain has won’t work here. He also suggests that heavily regulated private insurance, as practiced in the Netherlands and, in part, experienced here, is likely to face resistance. He writes:
Yet given the power of money in U.S. politics and the power of the profit-seeking insurance industry, it’s unlikely that the United States could run a system centered on private insurers as well as the Dutch do. To some extent it already does. As I pointed out in my second healthcare primer, almost half the U.S. population is covered by private insurance provided by employers, which is effectively subsidized through the tax code and regulated because that tax subsidy requires that employers adhere to rules that prohibit discrimination based on health status or job title. Another significant chunk of the population is covered on the Obamacare exchanges, which subsidize highly regulated private insurance plans.
It’s not likely to get better. Corruption and coopting of a process for profit seems to be in our DNA.
And we already have a prime example of what can go wrong – the partial privatization of Medicare that was achieved through pressure from insurance companies. While Medicare originated as a single-payer component within the U.S. system, politicians subsequently allowed a significant carve-out in the form of the Medicare Advantage program. Medicare Advantage allows a large part of the funds to flow through private insurance companies. For such partial privatization to work, the government must “risk-adjust” payments to insurers – that is, paying less for healthy clients and more for patients with medical problems. Not surprisingly, insurers have been “upcoding” their clients, making their health seem worse and hence collecting extra payments. Moreover, the incentive to deny coverage for legitimate medical conditions still exists.
In the U.S. context, then, a system reliant on private insurers will inevitably be subject to gaming and some level of corruption.
Shame on us, but the potential for further corruption, or if you prefer, profit seeking at the expense of optimal care, shouldn’t surprise you. He faces reality and continues:
This is not to say that such a system cannot work— in fact, it does work to some extent for tens of millions of Americans. But given U.S. realities, along with our history of political and regulatory capture by big money, it is profoundly unwise to make regulated private insurance the heart of our healthcare system.
So what does he think could make a difference while not pushing commercial insurance off a cliff?
Single-payer, aka “Medicare for all”: Americans over 65 have lived under a single-payer healthcare system — standard Medicare — for 60 years. Tens of millions more are covered by Medicaid. These programs are hugely popular, and despite the growing problems caused by partial privatization have been relatively successful in containing costs. As the Congressional Budget Office has documented, costs for these programs are far below projections made soon after the Affordable Care Act was passed.
Here, he offers another graphic before continuing to his conclusion:
Single-payer isn’t a perfect system, but it is a system that has been run effectively not only abroad but in the United States. While I am by no means dogmatic about this, my view is that the next phase in U.S. health reform should involve an effort to transition away from private insurance to single-payer.
He explains why this is a “new” position for him:
Longtime readers may recall that this was not my position in 2009-10, when Obamacare was being put in place. Nor did I support Bernie Sanders’s call for single-payer in 2016. However, like many and probably most supporters of Obamacare, I backed patchwork rather than comprehensive reform not because I believed that it was the best policy but because I believed that it was the only politically realistic way forward in 2010 and in 2016.
But it’s now 2026, and the political landscape has changed in ways that arguably put fundamental reform in reach.
He explains why the ACA was right for its time. He calls its passage a miracle and gives Nancy Pelosi a lot of credit for making it happen. That was then. Krugman is looking at “now” and proposing the next logical step up on the climb toward better care for everyone. He adds another KFF graphic showing how the ACA has grown in acceptance over time, even as it has been continuously challenged in the courts, by the failure of 10 states to accept the Medicaid expansion, and by Republican attempts to pass legislation to nullify it. He continues:
Given the current high popularity of the ACA, however, the political prospects for another major reform are good — if and when we emerge from MAGA efforts to destroy it.
In addition, there is now very strong support for the idea that the U.S. government should, one way or another, ensure universal healthcare.
He inserts another graphic and some comments about the “Harry and Louise” resistance to the healthcare reform efforts of the Clintons and the current anger over “delays and denials” before getting back to what he thinks is possible now:
Finally, if we are going to make a major effort at healthcare reform, it will come in the aftermath of four years of Trump administration destruction — destruction that is underway on many fronts, but in particular includes devastating cuts in Medicaid and Obamacare subsidies. The human cost of these cuts will be immense. But it may be easier to pursue more comprehensive reform amid the wreckage than would have been possible if we still had the sort-of acceptable system we had two years ago.
So, I guess he is saying that today’s bad news may eventually be the origin of good news.
Arguably, then, if MAGA has been decisively beaten by 2029, the stage will be set for more than a restoration of the status quo ante. America will, instead, be potentially ready for more fundamental change. What might that change look like?
He is now ready to expand on the “path forward.”
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 be 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.
After a graph to prove that point, he continues. He has previously given us plenty of clues about what he is going to recommend, but now he lays it out concisely:
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 a 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 to a single-payer system without forcing Americans into it.
Of course, insurance companies would hate this, and campaign furiously against it. But given their current reputation, this might even help the cause of reform.
He finishes by saying that he is open to the opinions of “experts.”
Now, I am not offering policy specifics, partly because this post is already long but mostly because this is the point at which we need details from real experts. And I am not at all dogmatic about the path forward.
His final statement is pregnant with hope:
The main point is, instead, that we are approaching a point at which ambitious healthcare reform, well beyond simply repairing the damage to Obamacare, will be possible. And Democrats should be prepared to rise to the occasion.
I agree!
My 55th Medical School Reunion
Back in 2021, in the midst of COVID, my 50th medical school reunion was a Zoom event that drew little participation. This year is our 55th graduation anniversary, and with COVID a distant memory, my class has placed extra emphasis on it. My wife has been longing for a multiday stay at a hotel in downtown Boston, and I was curious to see how some of my old classmates were wearing their years. So here we are. Today’s header is an attempt to capture the beauty of the Harvard Medical School quadrangle, which hasn’t changed much since its construction around 1904.
Some pop psychologists say that an extrovert needs to communicate, either by speaking or by writing, to most efficiently formulate thoughts. I would have never thought I was an extrovert, but a Myers-Briggs personality test that I took many years ago pronounced me as an ENFP, which Google Gemini enerously defines an ENFP as:
An ENFP (Extraverted, Intuitive, Feeling, Perceiving) is a charismatic, enthusiastic, and highly creative free spirit. Known as “The Campaigner” or “The Champion,” this personality type thrives on big ideas, deep emotional connections, and exploring new possibilities in both life and relationships. [1, 2, 3]
An ENFP personality type is a distinct minority among physicians. Perhaps that explains why I have often felt ill at ease in social situations with other physicians and was skeptical about being a “classical” extrovert. Extroverts are external processors. Introverts are internal processors, and they aren’t as dependent as extroverts are on hearing or reading their words to process complex thoughts and generate ideas.
Obviously, most of us lie on a spectrum from introversion to extraversion, and it may be true that the expression of our personality type can change over the years as we experience life. Years ago, I might have said I was an introvert because I often felt socially awkward. Whatever the reason, whether I am an introvert masquerading as an extrovert, or perhaps because I am a member of an awkward minority among physicians, as the reunion approached, the idea of seeing people I hadn’t seen in decades, and some whom I hadn’t seen in more than half a century, did make me a little anxious and apprehensive about the whole idea of attending.
In preparation for the reunion, we were asked to submit a photo and a brief account of what we had been doing since 1971. The collection was published in a very nice book, and I have enjoyed preparing for the reunion by reading the personal histories. The book helped, but I remained a little apprehensive about the reunion, and was not sure how many of the multiple events I would attend.
Well, all my anxieties were unfounded. The activities included grads from the classes of 1966, 1971, 1976, and 1981. Only about 40 members of my class showed up, but it was great to see old classmates and hear about their adventures in life. The medical school did a great job in demonstrating its innovations in medical education. Perhaps the program was pitched to the audience because we had a “clinical” presentation that emphasized the proper evaluation of geriatric patients. The focus of the presentation was theoretically 78 and was a fall risk. Most of the people in my class are 80 or 81, and several of us walk with a crutch or a cane. Personally, I flunk the “chair test.” I can’t rise from a chair without using my upper body strength. I am pleased to report that, from the gerontologists’ perspective, I am not a lost cause yet, as I can still trim my own toenails. I am happy to know that members of the Class of 2026 have received good instruction in evaluating the medical needs of folks like me.
Enjoy your weekend and the beginning of summer. If there is anything you reflect on at a reunion, it is that time flies for everyone. Make the most of your time.
Be well,
Gene
