Universal Healthcare Options
Health Insurance

States Keep Trying to Pass Single Payer Healthcare, But What Does it Mean?

Through the daily healthcare noise from Washington we hear a lot about the good and bad of a new health care plan and also ways in which the current plan should or should not be changed. 

Sometimes the dialogue talks about changing our delivery model--how you pay for and access medical care. One model that has been and continues to be introduced into state law is the “single payer model”. Other names that you may have heard it called are: Medicare for All, Universal Care, Universal Coverage, and Single-Payer health care. For this article we will call it the single payer model. 

 

What is a Single Payer Model?

A Single Payer model is where each of us would get all of our health insurance from one source or payer--the federal government. Our health care coverage would include hospital stays, doctor visits, emergency care, mental health, vision and dental care, prescriptions, medical equipment and home care. There would be no premiums, no deductibles to meet, or co-pays. There are no providers / physicians in-network or out-of-network because there are no networks. Either the provider accepts government payment for their medical services (if the government covers these services) or private pay.

16 developed countries use a single payer system including Norway, Japan, the UK, and Canada.

 

Who Pays For a Single Payer Model?

The answer is we all would pay for universal health coverage through higher taxes. Taxes include income and asset taxes that are scaled by income and employer taxes. The proponents of single payer argue that any increase in taxes would be far less than the costs of your current premiums, deductibles, and co-pays.

Those opposed to single payer argue that the costs would be prohibitive and the last thing we need is the government involved in our health care decisions. A government health insurance would still decide which services to cover and which should be paid for out-of-pocket just as private health insurance currently does.

 

What Type of Public Healthcare Does the U.S. Already Have?

Even though we think of American healthcare as being privatized, consider that 4 in 10 Americans receive some form of public support for their health care--either through Medicare, Medicaid, the Children’s Health Insurance Program or the VA. Another way to put it is that the Centers for Medicare & Medicaid (CMS) already pays for nearly half of America’s healthcare costs.

These forms of government support are actually examples of the variety of universal healthcare options that exist in other countries, including a single-payer system. Universal Healthcare models worldwide mostly differ by 1. the type of insurance they offer and 2. if the medical care delivered is mostly by private employees or government employees.

Single Payer: Government Insurance

Medicaid is an example of a state-wide single-payer system. Taxes pay directly for Medicaid, a government health insurance program delivered and regulated by each state.

Two Tier System: Government & Private Insurance

Medicare is an example of a two tier system, where government provides a base level of health insurance for everyone 65 and older to cover essential health benefits. Those who can afford it, though, can opt to pay in addition for private health insurance if they think it gives them better medical care options.

Mandated Insurance: Required Private Insurance

This is all in contrast to Obamacare / The Affordable Care Act, which requires anyone who isn't eligible for government health insurance to pay for private health insurance. Government can still help subsidize these payments to private health insurance companies.

Public Medical Care: Any Insurance, Government-Funded Medical Care

The VA healthcare system is an example of government-funded medical care. VA employees are direct employees of the federal government. The VA provides essential medical care to veterans at no cost, although it does accept private health insurance payments as well. When universal healthcare options are discussed, a lot of focus is placed on the types of insurance possible without realizing how much of an impact a country's public or private hospitals and clinics can have on medical costs. The combination of what type of insurance is paying for medical care and who is providing the medical care are the 2 most important factors that make up a country's universal healthcare system.

 

Food for thought the next time a single-payer model is discussed to help you dig deeper.