Here's what's really killing health-care reform

  • The health policy debate is still dominated by myths about health costs and coverage.
  • The public is bombarded with untruths about "single payer," Medicare, and Obamacare.
  • It's time to focus on realities or the health system could collapse.
Dozens of health care activists protest in front of a Harlem charter school before the expected visit of House Speaker Paul Ryan on May 9, 2017 in New York City.
Getty Images
Dozens of health care activists protest in front of a Harlem charter school before the expected visit of House Speaker Paul Ryan on May 9, 2017 in New York City.

The current fate of the Republican Obamacare replacement bill has understandably focused a lot of attention on the pros and cons of that bill and its chances of actually becoming law. But so many of the arguments for and against the bill are based on myths that endure even at the most educated levels of American political discourse. And we can't get anywhere when it comes to improving our health care and insurance situation until we slay these myths once and for all.

Let's focus on the top three most damaging misconceptions:

1) We can keep Obamacare as it is

Love or hate those Congressional Republicans trying to repeal the ACA, either way, the system is in deep trouble and has fallen well short of expectations. Insurers continue to bail on Obamacare exchanges, leaving several regions of the country in danger of no options. Premiums are rising to unaffordable levels, going along with the high deductibles that already made "health insurance coverage" a meaningless term to millions of Americans who had nominal coverage but could not really afford to use it.

That's why the CBO's projection that the existing GOP health bill would eventually leave 23 million Americans without coverage isn't that damning an indictment compared with the existing Obamacare law that's already too expensive for millions of Americans. Something has to change either way.

This is the essential catch-22 of the situation for both parties. The Republicans need to fix a problem they didn't entirely create or risk voter revolt; if the Democrats sit on the sidelines and watch the GOP fail, they could share the blame. Somebody needs to propose a plan that can work and get at least a handful of crossover bipartisan votes.

2) The rest of the world has single payer and it works

Nope and nope. The longstanding myth that all or almost all of the industrialized world employs a single payer/government-backed health care system is just not true. The truth is that the nations that supposedly guarantee all their citizens health care all rely heavily on people who can pay out of pocket for expedited care.

Germany, France and Japan have hybrid systems where a good chunk of their populations find the need to supplement their "universal coverage" with private insurance. In France, up to 90 percent of the public has private insurance plans, according to the Foundation for Economic Education. It's similar to our own Medicare program, but more on that later.

As for the "it works" part, that's all relative. But in the U.K. alone, the massive costs and other problems with the National Health Service are coming to a head. The doctor shortage is getting so bad there that patients are now being offered the chance to see a general practitioner sooner if they're willing to pay out of pocket. Nothing of value can be made free, and the people who live in countries with so-called free health care have been doing a lot of paying for the privilege.

And yet, so many politicians and activist groups insist on holding up the more realistic health insurance reform debate in favor of this unicorn known as "single payer." The fact is, that unicorn doesn't exist and every minute we spend asking for it is a waste of time.

3) We can and should extend Medicare for all

People who support this idea, led by Senator Bernie Sanders, are essentially making the same argument as the single payer advocates. But their decision to focus on Medicare offers a good opportunity to dispel some crucial misconceptions about the program.

First off, most people on Medicare need to also purchase supplemental insurance.

Second, Medicare is not the efficient and wonderful program so many politicians from both parties seem to think it is. For years, Medicare advocates have pushed out the incredible statistic that its administrative costs are just 3 percent of total costs, compared to 15 to 20 percent for private insurance. Ridiculous.

Medicare relies heavily on massive bureaucracies from other government agencies whose costs are not reflected on its balance sheet. The I.R.S. does all the work to collect the taxes that fund Medicare. The Social Security Administration pitches in by collecting some of the revenues paid by beneficiaries that are deducted from their Social Security checks. Oh, and the Department of Health and Human Services manages accounting, auditing, marketing, office buildings, and the massive fraud issue costs. The list goes on.

Also, Medicare patients are older and usually sicker than non-Medicare patients. In short, their cost of care tends to be a lot higher. So even if that "3 percent of total costs" figure were true, we're talking 3 percent of a much higher principal to begin with!

Those costs are impossible to hide forever. Too many American voters are basing their belief in the constancy of Medicare on the fact that it's been around all of their lives. But that kind of perception is misleading. Everything succeeds until it doesn't, and Medicare's own trustees now project the program to become insolvent by 2028.

The fact is that Medicare needs serious reform if it's going to exist in almost any recognizable and effective form for today's Millennials, Gen X'ers and their kids. Extending the program to all Americans will only speed its demise before the politicians and the people are able to come up with an adequate solution.

Each one of the above myths is so pervasive in Washington and in the news media that they're making the already difficult job of replacing Obamacare that much harder. Each of them is like the Great Pumpkin too many people are waiting for rather than getting down to the business of governing effectively.

Debating the weaknesses and strengths of any new health coverage bill is necessary, but debating them by trotting out these and other health care myths as some kind of viable alternative option wastes our time and misleads public expectations. Someone needs to be the adult in the room, close this book of fairy tales, and focus the public on real options only.

Commentary by Jake Novak, senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.