Universal Coverage Mighht Be Nice, but an AI Tax Is Necessary

I was amused – oh, I should be polite and say “interested” -- to see a new study, led by researchers from Yale School of Public Medicine, about the benefits of a universal single payor health system. It concluded that we could save 100,000 lives annually and save some 1.04 trillion each year – some 20% of our health care spending. What’s not to like? I’m sure Bernie Sanders is already drafting the bill.

AI needs to give back, especially for health. Credit: Microsoft Designer

The savings come from five sources: using Medicare payment rates for all providers, using “international reference pricing” for pharmaceuticals, reducing administrative costs to Medicare’s levels, reducing fraudulent billing (“consistent with the experience of other single-payer transitions”), and reducing emergency room visits and hospitalizations due to improved access to primary care.  Good goals, all.

Credit: Pandey, et. al. 

Steffie Woolhandler and David Himmelstein, among others, have been making these or similar arguments for decades, and they are not without merit. It is shameful that we don’t have universal coverage. It is distressing how much money we spend on healthcare. It is embarrassing that we spend so much money on administration.  It is maddening that so many people don’t get the care they need, get the wrong care, or get their care in the wrong places/at the wrong times.

We could do better, we should do better, but, if anything, we’re doing worse: more people are losing coverage, more providers are going out of business, our rates of chronic (and some infectious diseases) are going up, and we’re dying sooner.

I want to quickly point out some of the problems with the proposed sources of savings, then discuss other courses of action that might lead to these or even better outcomes.

• Medicare payment rates: yes, a lot of money could be saved by using Medicare payment rates, but I doubt you would find many providers who would say they could survive. They make their money on private insurance rates, are lucky to break even on Medicare rates, and lose money on Medicaid. This one is not going to happen.
• International pharmaceutical reference pricing: first, I’m not sure such a thing exists. It is true that drug prices are typically lower in other countries. Both President Biden and President Trump seized upon this, with some signs of modest success. But, as with the Medicare pricing, it would be a shock to the pharmaceutical industry to have prices slashed across the board, wiping out trillions of dollars of value and, oh-by-the-way, eventually reducing investments on new and better prescriptions.
• Administrative costs: as a percentage of spending, Medicare’s administrative costs are lower than private insurance, but that is partly due to Medicare spending per capita being so much higher. Also, costs incurred by other agencies – e.g., Social Security or the IRS – are not always counted. But certainly the complexities of so many plan designs by so many health insurers while tracking the current eligibility of everyone is a cost that is much higher than it should be.
• Reducing fraudulent billing: I mean, really: do people really think that Medicare does a better job of reducing fraudulent billing than United Healthcare or Anthem, much less than other countries?
• More primary care: reducing emergency room visits and hospitalizations has been the goal of countless private health insurance efforts, such as disease management or chronic health programs, and the track record has generally been underwhelming. But the real problem is – where are we going to get all the primary care physicians to handle all the underserved people?  

So, much as I agree with the goals, count me a skeptic that single payor is going to magically make everything better.

Here’s where I inevitably turn to AI. An article by Alex Janin in The Wall Street Journal marveled at how “AI Is Helping Patients Solve Medical Mysteries.”  Ms. Janin writes: “AI can be especially adept at flagging potential rare and hard-to-diagnose diseases, which may otherwise go undetected for years because doctors don’t often see them.”

That’s the kind of use AI advocates have been promising for years, and it is exciting to see this use finally bearing some fruit. For the small percent of patients with these kinds of diseases, AI can literally be a lifesaver, but let’s remember that they are a small percent. When I read the article, I keep thinking about bigger problems I want AI focused on. E.g.,

·       Flagging fraudulent and/or duplicative billing;

·       Identifying both unnecessary tests and procedures and the providers who most commonly perform them;

·       Identifying providers who deliver sub-standard care.

Want a more efficient/effective healthcare system? Let’s start there. The savings potential may not be as gaudy as Yale’s $1.04t, but these would not require as massive an upheaval.

While I’m at it, I want to bring up another AI-related area of healthcare. The not-so-hidden but too-little discussed secret of U.S. healthcare is that we have a lot of third world outcomes, largely in lower socioeconomic households and disproportionately impacting people of color.

Sure, we can put in single payor, but will that solve the problem of rural Mississippi or south side Chicago? Too many people don’t have access to clean air, clean water, enough food, adequate shelter, or accessible/affordable healthcare. The great lesson of 20^th century U.S. healthcare was not the gains from new medicines or more hospitals/physicians, but in public health efforts like improved sanitation and more immunizations.

So where are our investments in 21^st century public health? Do we want to make marginal improvements in the health of the middle/upper income households, or dramatic improvements in lower income households?  I suspect I know what this Administration would say, and they’re wrong.

By every measure of income inequality or social mobility, we’re in a have/have not society, and there is every reason to believe AI will make that so, so much worse. It’s going to be NAFTA but much worse. But I always remember: NAFTA didn’t cause all those jobs to go abroad. Those jobs went because U.S. CEOs chose to send them abroad, in order to make them and their stockholders richer. Think they won’t do the same with AI?

That’s why I firmly, fiercely believe we need some sort of AI tax to help make the adjustment to the new AI world. The financial gains from AI need to be broadly distributed, and one of those distributions has to be for addressing our third world health outcomes. That could be through 21^st century public health investments, and/or through some sort of universal basic income (UBI).  

Universal coverage might be nice, but an AI tax for public health and universal basic income might be necessary.  

Home Is Where Your Parents Are

When the Affordable Care Act passed, I thought one of the odder provisions was allowing children to remain on their parents’ health insurance until they were 26. This is largely a healthy population, cheaper to cover than pretty much any other demographic. They could have gotten inexpensive coverage through the exchanges or, if qualifying, through expanded Medicaid, It made no sense to me that their parents should subsidize them, or that, even more, their parents’ employers should subsidize them.

Mom, dad - I'm coming home to live!  Credit: Microsoft Designer

It proved to be surprisingly both popular and effective, to the point young adults now “dread” turning 26 because they’ll have to figure out health insurance on their own.  So I guess I shouldn’t have been surprised to learn that young adults are also living with their parents at record levels.

The numbers vary, but tell the same story:

• A May report from the Federal Reserve says 49% of young adults under 30 lived with their parents, up from 43% in 2022 and 37% in 2017.
• Census Bureau statistics indicate that 33% of young adults aged 18-34 – some 25.2 million of them – lived with their parents, just slightly below the COVID high of 33.6%.
• The Urban Institute found 20% of Americans aged 25-34 lived with their parents, down from 2017’s peak of 22.8% but nearly double 2005’s 11.8%.  
• Data from the National Bureau of Economic Research, first published in 2022 and updated last month, indicate that more than a quarter of college graduates aged 23 to 27 lived with their parents, reaching the high it reached during COVID; by contrast, in 2001 it was 18%.
• A survey from storage solutions company Sparefoot found that 58% of young adults who had once lived independently moved back home at least once; 15% did it more than once.

As Sparefoot pronounced: “The boomerang generation is no longer an outlier. It is the norm.”

People offer lots of theories about this trend, but most commonly blame jobs and housing. Many young adults have a hard time finding a job they want, for which AI is often blamed, correctly or incorrectly. Housing costs have skyrocketed.

Still, most of these at-home young adults are, in fact, working. Hannah Jones, the senior economist at Realtor.com, who authored its report on the topic, says: “The employment rate for this demographic has remained relatively stable, but the share of adults living at home has still increased.”

Credit: Realtor.com

The report also points out that the wave started with the Great Recession of the late 2000’s:

Between 2007 and 2010, co-residence rates rose sharply, and when the economy recovered, the rates didn’t come back down. A full decade of falling unemployment and rising wages did not reverse the trend…The housing supply never rebuilt fast enough after the crisis to absorb the households that should have been forming, and the gap kept widening through every year of the expansion.

COVID then made everything worse, so that: “By 2025, the overall co-residence rate had nearly matched its pandemic peak, and the absolute count, 25.2 million adults, had surpassed it.”

The median price for a new home is around $400,000, while the average rent for a one bedroom apartment is $1,663, both of which can be daunting for young adults. That’s why Rebecca Picciotto and Nicholas G. Miller of The Wall Street Journal reported: “Living at home as a 20-something was once viewed as a failure to launch and even a source of embarrassment in a culture that places a premium on independence. That is no longer the case. Living at home is now often viewed as a sign of financial prudence, and for some, a long-term prospect.”

Odysseas Papadimitriou, the founder and CEO of Wallethub, agrees, saying that living with parents ““is actually a very smart financial decision for a young adult,” although he was clear to add: “This arrangement should leave you with more disposable income that you can save for a down payment on your first home. It should not be an excuse to spend more on things that won’t benefit you long term.”

Three fourths of the Sparefoot respondents felt that moving in with family “is a smart financial strategy, not a setback,” which the company believes marks “a clear cultural shift in how the path to independence is perceived.”

Ms. Picciotto and Mr. Miller note that, rather than hiding their situation, some stay-at-home young adults “now broadcast their lives as “stay-at-home daughters” or “stay-at-home sons” on social media,” including Tik-Tok videos.  

There is a general sense that it is tougher for young people financially now than in previous generations. Northwestern Mutual's 2026 Planning & Progress Study found 56% believed that achieving financing independence was harder today than for previous generations. A Pew Research Center survey found 80% said it was harder for young adults to cover basic expenses than it was for their parents. Compared to the 2021 survey, finding a job jumped the most in terms of getting harder, but at 64% is well below the difficulty of buying a home (87%), paying for college (82%), or saving for the future (80%).

Some think affordability doesn’t explain everything. Noam Scheiber reports in The New York Times:

Smartphones and video calls have meant that going off to college no longer requires cutting the cord with one’s mother or father, making re-entry less jarring to both parent and child. And huge social disruptions like the Great Recession and the pandemic left many young adults with no alternatives, lessening the stigma.

My generation communicated through snail mail and infrequent, expensive long distance calls, so there was a much greater sense of separation.

Perhaps it is no coincidence that fewer young people report having sex: one in four Gen Z adults have never had sex, and the number of young people who haven’t had sex in the last year doubled from 12% in 2010 to 24% in 2024. Not all of those sexless adults are living with their parents, but the living situation has to have had an impact.

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Lawrence Katz, a labor economist at Harvard, told Mr. Scheiber: “Is there some cultural change in the way people are parenting? You see kids today and the degree to which they’re interacting with parents, that’s completely different than the world of 50 years ago, 25 years ago.” I’d agree. I’m a baby boomer. We didn’t trust anyone over thirty, we rebelled against our schools, our government, our societal norms, and, of course, our parents. Moving back in with our parents was unthinkable. But young adults today are facing challenges that we certainly never did think of.

Mothers, Do Let Your Babies Grow Up to Be Mathematicians

Last week I was mulling writing about the awarding of this year’s Field Medals, which are often described as math’s equivalent of the Nobel Prize (no doubt to the dismay of both awarding organizations). Nah, I told myself; sure, I’m interested in math, but how many other people are? Most people barely even care about Nobel Prizes, and when they do it’s likely to be more about the Peace or Literature Prizes, not Physics or Chemistry. Math reminds most people of junior high algebra.

Don't let the tuxedo fool you. Jacob Tsimerman winning the Fields medal. Credit: Simmons Foundation

But then I saw the hook: one of the medalists – Jacob Tsimerman, of the University of Toronto – announced he was "pivoting toward AI safety” and would soon be going to work at OpenAI. People can’t get enough about AI, and with AI agents “going rogue” and creating all sorts of mischief, AI safety should be top of mind for everyone interested ion our (AI) future.

Professor Tsimerman won the award for “his contribution in the recasting of o-minimality as a fundamental method of arithmetic and complex algebraic geometry, and his role in the proof of many central conjectures including Griffiths' conjecture on the algebraicity of images of the period maps, and the Andre-Oort conjecture for Siegel modular varieties.” If you have the slightest idea what any of that means, you may be going to work for an AI company soon too. Note, though, nary a mention of AI in all that.

He did, though, co-author a paper last year about various scenarios where AI lead to most or all humans being killed, so o-minimality may have to wait. That paper ominously concluded: An AI-driven omnicide may involve an intent to kill a large number of people, or may be wholly unintentional. And, if an intent to kill exists, that intent may exist within a large group of individuals such as a military or corporation, or just a few people, or in an AI system itself.”

He told Janet Hurley of The Toronto Star: “The reason I wrote that paper with Andrew Critch is that, even though this has been going on for a long time, I felt there wasn’t a visceral story people could engage with in terms of, concretely, what are we afraid of here?”

Consider me afraid.

It turns out that Professor Tsimerman is not alone in leaving mathematical academia for AI. There has been what has been described as a “wave of top mathematicians "exiting" academia for industry.” If you are a graduate student in math, or, better yet, a math professor, you are, as Ben Affleck’s character told Matt Damon’s math genius character in Good Will Hunting, “sitting on a winning lottery ticket.” The AI companies want you, and are putting up big bucks to get you.

Just in the past week Julia Amann of The Wall Street Journal writes of The Million-Dollar Talent Wars for 20-Something Math Geniuses and Lila Shroff of The Atlantic says Something Weird Is Happening in Math, both describing the impact of AI on academic mathematics.

Wall Street firms having been going after math students since the 1980’s to serve as “quants,” designing ever more elaborate trading models, while Silicon Valley firms have been snapping up computer science students for the last three decades. Now the AI companies can’t get enough math geeks either, and they have money to burn.

Matt Stabile, founder of New York-based recruitment firm Stabile Search, told Ms. Amann: “But a million dollars is something people don’t even bat an eye at anymore…The delineation is pre-OpenAI and post-OpenAI, that’s when you saw competition really take off.”  Charlie Witmer, COO of quant firm Optiver, acknowledged to her the effect of AI firm’s interest in math geniuses: “Outstanding people are in more demand than they’ve ever been, and that does create competitive pressure on wages. As competition increases for outstanding people, prices naturally rise.”

Part of the reason mathematicians may be tempted to leave academia is that, well, AI may soon be better than they are at math. A few months ago, I wrote about how mathematics might be one area that AI hadn’t yet conquered. That didn’t age well. “In a few years, AI systems will be robustly superhuman at the act of doing mathematics,” Professor Tsimerman told Ben Cohen of The Wall Street Journal. “The social consequence of that, how we choose to react, what you feel about it—those are much harder questions.”

He admitted to Ms. Shroiff that there are pluses and minuses (pun intended) to AI’s improving math skills:

From one point of view, I think it will be extremely exciting. We might speed up the process of generating interesting mathematics by enormous factors of 10 or 100. If that happens, we might see the connection between pure math and applications (which typically takes many decades) really speed up and become a much tighter pipeline.

But from the perspective of research mathematicians, and especially young people who are pursuing a Ph.D. in mathematics, it’s a bit of a turbulent time. The skills that we’ve acquired and learned to propagate might become less relevant than they are now.

On the other hand, he thinks math expertise may help us understand what AI is up to:

Mathematics is historically the language by which you take intuitions and fuzzy notions of how things work and you make them precise. We’ve done this with information theory; we have done this with complexity theory. Just a little bit of understanding and precise definitions can provide a ton of mileage. Once we have that understanding, the hope is that we could do a better job of anticipating the behavior of new AI systems, adjusting for them, controlling them, and reacting to them. That’s where I think mathematicians fit in.

He told Kenneth Chang of The New York Times about AI: “It’s mostly an empirical and engineering kind of science. If we understood how these things work better, we might be able to steer them better, or understand them better, or control them better.”

We can hope so, anyway.

The AI industry first sucked up university AI researchers, then academic leaders in computer science, and now is going after the math departments. The trouble is, there aren’t enough of them. Even worse, we’re eating our seed corn. Who will train the next generation of mathematicians?  That’s fine if you assume AI is that next generation, but if you still want human creativity and brilliance, it’s daunting.