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Single Payer Getting More Attention at State Level, Not Going Away

Analysis  |  By Gregory A. Freeman  
   July 18, 2018

States are testing the waters with Medicare-for-all type plans while waiting for federal solutions. The cost of single-payer plans could be the biggest hurdle.

"Medicare for all" is becoming a rallying cry in state elections, with state legislators coming up with their own versions of single-payer healthcare despite, or possibly because of, the stagnation of similar ideas at the federal level.

The push for a single-payer healthcare system is proving successful for some, such as socialist Alexandria Ocasio-Cortez, who rocked New York by beating the 10-term incumbent Joe Crowley in a New York City district. She is a vocal proponent of single-payer healthcare.

The proliferation of state plans and in particular Ocasio-Cortez's victory in New York could indicate growing support for single-payer healthcare, says Sally C. Pipes, president and CEO of the Pacific Research Institute in San Francisco.

Pipes says the American public may be drawn by the promises of a healthcare plan that eliminates premiums and other disliked features of the current system.

"The horse is out of the barn in terms of single payer. They keep pushing it and pushing it and this has become a major issue that gets the voters' attention, especially for progressive Democrats," Pipes says.

She says, "There's an effort in the states to test the waters as they wait for things to change in Washington. Because Obamacare wasn't repealed and replaced, Democrats are saying single payer is what they wanted all along, so now they're going for it."

Multiple State Proposals

Four single payer proposals are on the table nationally, including one from Sen. Bernie Sanders (I-VT) that calls for Medicare to be available to all Americans. State legislators and candidates are taking up the issue ahead of midterm elections, rallying the many voters who are fed up with the current healthcare system and want a solution in the form of a government-sponsored single payer.

The state plans are similarly idealistic, calling for universal coverage of all residents regardless of income and eliminating premiums, copays, and deductibles.

Many states have serious proposals for single-payer systems. In Michigan, Rep. Yousef Rabhi (D-Ann Arbor) is proposing a government-administered single-payer system to provide coverage to everyone in the state.

The MiCare plan would provide state residents with medical, dental, mental health, and prescription drug coverage while eliminating healthcare premiums, copays, and deductibles, Rabhi says.

Healthcare providers would remain independent, and patients would be able to pick among participating providers under the MiCare plan. Michigan would pay for the plan by cutting administrative costs generated by for-profit insurance companies and raising taxes, Rabhi says. He claims the state would save a net $20 billion in the first year.

"Instead of the exorbitant costs, stress and uncertainty of premiums, deductibles, co-insurance and other out-of-pocket payments, working families would pay a small and simple progressive payroll tax designed to save real money on their overall health expenses," Rabhi explains in his proposal.

He continues, "Large and medium employers would pay a payroll tax set at a level lower than the current average employer expenditures for employee health care, saving many employers money immediately."

Also, in Michigan, a Democrat running for governor has proposed MichCare. Abdul El-Sayed, MD, says he would pay for his single-payer plan with a new, graduated payroll tax that all working people would pay, coupled with new taxes on the gross earnings of businesses making more than $2 million a year.

The New York state Assembly recently passed a bill calling for a statewide single-payer universal healthcare system, for the fourth year in a row.

The New York Health Act would include comprehensive outpatient and inpatient medical care, primary and preventive care, prescription drugs, lab tests, rehab, dental, vision, hearing, and all benefits required by current state insurance law, by publicly funded medical programs or provided by the state public employee package.

The bill passed easily in the Democrat-led chamber but the state's Republican-led Senate is not expected to take up the measure this year.

Minnesota State Rep. Erin Murphy (DFL-St. Paul) is running for governor on a platform that includes her Pathway to Single-Payer plan, which will set the state up to "lead the nation by becoming the first state to provide guaranteed, affordable health care to everyone," as stated in a press release.

More Momentum Than in Past

Pipes opposes single-payer healthcare, saying Americans would regret the choice only after experiencing the increased taxes and reduced services of such a system. But single payer has become a powerful political tool, she says.

"Before Bernie Sanders proposed single payer in 2016, it wasn't really taken seriously, but now you have all these states supporting it," she says. "Political leaders are seeing this as an issue they can run on and get lots of support, draw big crowds, and look like they're giving people what they want."

Americans have been on the fence about Medicare-for-all plans for a while, with one survey of  1,850 U.S. adults finding that 51% supported the idea.

That figure could be increasing, Pipes says. If it is, Pipes says she suspects it is largely because politicians can run on the pie-in-the-sky promises of eliminating premiums, copays, and deductibles while giving few details about how to pay for such a plan.

"Both New York and Michigan say theirs would be paid for by progressive income tax increases and a new payroll tax, but they haven't come out and said just what the cost would be. That's unlike in California, where the Senate appropriations committee said SB 562 would cost $400 billion a year," Pipes says. "People are drawn to the promised improvements, but they have to consider the cost at some point."

Single payer is a polarizing topic, with Democrats and Republicans typically coming down sharply on either side of the issue, but Pipes says Democrats run the risk of dividing their own voters.

"People support single payer when you ask them if they'd like a system that eliminates everything they don't like about the current system, but when you ask if they want to pay more taxes that support goes down," Pipes says.

"The Democrats are finding this is a successful way to motivate people in a campaign but when they have to answer questions about raising taxes on everyone, including working class voters, they could find themselves driving a wedge between their constituents," she says.

Gregory A. Freeman is a contributing writer for HealthLeaders.

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