Healthcare remains a key issue in politics, capturing top spots on political campaigns, and seeing significant state and federal legislative and regulatory activity. Single-payer healthcare system proposals, like “Medicare for All”, have received the most attention in this space. Underpinning these calls are the promises of coverage gains, reduced administrative burden and lower costs – laudable goals that many people in our industry work daily to achieve.
However, single-payer proposals create a sea of change and have significant consequences, consequences so profound that it highlights the fact that our current healthcare system, while far from perfect, may be the best foundation to incrementally build upon to achieve the aforementioned goals. Before addressing these consequences, let’s first clarify what is meant by “single payer” including specific proposals.
What is Single Payer?
A single-payer healthcare system honors its namesake by creating a single government or quasi-government administered healthcare program for all. Despite misperception from some lawmakers, the media, and the public, the legislation that has been proposed at the federal and state level would essentially ban commercial insurance from existing in the U.S.
The best example of such a system occurs in Canada, which provides the majority of benefits through a mandatory government-run and financed insurer. Other countries, like the U.K. and Australia, have a model in which everyone has access to a government-run insurer and pays taxes to fund the program, but can have additional private coverage that offers premium benefits and services.
Learning from Past Experiments
Single-payer is not a new issue. The U.S. has previously and unsuccessfully experimented with a single-payer model on the state-level; but single-payer has continued to percolate below the surface of the healthcare reform debate.
In 2014, former Vermont Governor Peter Shumlin (D) successfully ran on a platform centered on creating a single-payer healthcare system for the state. As the Washington Post reports, the state’s healthy and homogeneous population along with its single commercial-run health insurer would, in theory, make it simple to switch into a fully government-operated health insurance model. However, the devil is in the details with large-scale healthcare reform, and ultimately, the cost for single-payer doomed the plan.
According to the Post, Vermont would have needed to double the state’s budget, raise income taxes to 9.5% and place an 11.5% tax on employers to pay for this system. These new taxes had the potential to wipe out small businesses and drive out larger companies, who could relocate to different states, decimating the Vermont economy. Vermont’s experience with a single-payer system raises many concerns for today’s discussion around a national single-payer model.
Current Federal Legislative Proposals
Senator Bernie Sanders and Representative Pramila Jayapal have introduced legislation at the federal level that would fully convert the U.S. into a single-payer system. In these plans, no deductibles, co-pays, premiums, coinsurance or cost sharing is applied to the consumer. These plans envision a quick transition; the Sanders plan operating a 4-year transition and the Jayapal plan a 2-year transition. Funding for these single-payer systems would come entirely from tax revenue. Neither measure has moved beyond first committee of referral, but several hearings concerning have been held in the House of Representatives that have at least partially covered this legislation.
Single Payer at the State Level
States are also exploring single-payer models. California took up the baton in 2018, prior to the midterm elections, proposing a true single-payer system, abolishing other insurance. While the legislation passed the California Senate, it stalled in the Assembly due to leadership’s concern with the cost. The proposal called for $400 billion without a firm plan of how to pay for it. No legislation was introduced in the 2019 session but the discussions around the Capitol have continued.
Since the 2018 midterm elections, single-payer proposals abound today on campaign trails and in the current state and federal legislative arenas. New York has proposed to eliminate all other forms of insurance coverage in favor of a single system that would cover every resident regardless of immigration status and not require any cost sharing. This proposal would be funded by a payroll and income tax. It stalled in the legislature due significant opposition. Other states considering the option of a single-payer healthcare system include:
- Florida, Hawaii, Iowa, Maryland, Maine and New Hampshire all had single-payer legislation that while discussed at length, failed while Illinois, Massachusetts and Rhode Island still have pending legislation to this end.
- Legislation calling for Medicare For All either to be implemented or urging Congress to enact it appeared in Massachusetts and New Jersey both of which remain pending.
- Oregon, New Hampshire, Rhode Island and Vermont considered legislation to study the feasibility and impact of a single-payer system, all of which are still pending with the exception of Vermont, which failed this session.
Beyond the Hype – Delving Deeper
This activity demonstrates why this movement is worth tracking and, more importantly, delving into the details of the many serious consequences of single-payer proposals.
For a further look at additional single-payer implications, read other entries in this blog series exploring the single-payer model.
Blog 1: “Exploring the Single-Payer Model”
Blog 2: “The Patient Consequences of a Single-Payer System“
Blog 3: “Provider Instability in a Single-Payer System”