Public Citizen, July 10, 2013

WASHINGTON, D.C. – The steps a state would need to take to move toward creating a single-payer health care system are somewhat complicated but are doable, according to a new Public Citizen report that provides states with a road map of how to achieve unified, universal health coverage.

A state could not hope to achieve a pure single-payer system, such as exists in Canada, because of federal programs, such as Medicare and Medicaid. But many of the ambitions of a single-payer system can be realized at the state level, the report explains. A state can accomplish much that the Affordable Care Act (ACA), or Obamacare, does not: provide universal care, greatly increase administrative efficiency and control costs.

Public Citizen distributed the report to state lawmakers throughout the country through the state affiliates of Health Care NOW. The report is available (at the link below).

“The facts are simple: We pay far more for health care than any developed country, yet we cover fewer people and get worse results,” said Dave Sterrett, health care counsel for Public Citizen’s Congress Watch division. “It’s time for real change.”

Calling for a universal care system in the United States is often painted as a quixotic pursuit because of incessant fear-mongering by conservatives about the supposed evils of a “government takeover” of health care.

But the report, A Road Map to “Single-Payer”: How States Can Escape the Clutches of the Private Health Insurance System, points out that Americans polled in 2012 were nearly evenly divided when asked if they favored a single-payer system, and this was amid the relentless drumbeat of opposition to the ACA. Evidence suggesting support for the single-payer concept also can be found in Americans’ widespread approval of Medicare, the government-run program that provides nearly universal care to those over 65 at far less cost than care that is reimbursed by private insurance companies.

The first step on a state’s road to a quasi-single payer system is to obtain a waiver from the ACA. This is well within reach because the act includes language that permits a state to receive a waiver from the ACA’s strictures, beginning in 2017. A state can be granted this waiver if it demonstrates that its alternative would provide coverage at least as good, for at least as many people, as the ACA would, and not add costs to the federal budget. For states that receive waivers, the federal government must provide funds to the state that equal what it would spend pursuant to the ACA. A state promising to provide comprehensive, universal care would easily clear this hurdle.

Achieving integration between a state system and Medicare and Medicaid would be more difficult because the law does not permit a broad waiver from these programs. But the law does provide ample room for the administration of these programs within a state to be altered to align billing systems and prices. This would allow Medicare and Medicaid to appear to providers and patients to be almost seamlessly integrated with a state system, although this strategy would require a state to dedicate resources to reconcile claims with the federal government.

The other major legal hurdle for a state to overcome is posed by the 1974 Employee Retirement Income Security Act (ERISA), which forbids states from regulating employer benefits plans. But a small body of case law provides grounds for cautious optimism that the hurdles of ERISA can be overcome. A state could insulate its system from being struck down on ERISA grounds by legislating alternative funding options, such as payroll, income or sales taxes.

The final major hurdle is determining how to pay for a universal care system. Transitioning from a system largely financed by employer and employee-paid insurance premiums to one likely financed by some combination of taxes would be challenging.

But the transition should not hurt employers or residents in the long run, the report concludes. A proposed system in Vermont, for instance, would significantly expand both the quality of benefits and the number of people covered. Yet Vermont’s plan would cost slightly less than the state’s current system, according to analysis commissioned by the state.

“Single-payer in the United States has been scorned but never tested,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “We’re looking for a few pioneering states with the courage and fortitude to let common sense prevail over the insanity of our current patchwork system. Once they succeed, we expect most opposition to single-payer and our reliance on privately insured health care to become historical relics.”

http://www.citizen.org/road-map-to-single-payer-health-care-report



Report – “A Road Map to ‘Single-Payer'” (21 pages): http://www.citizen.org/documents/road-map-to-single-payer-health-care-report.pdf

Comment:

By Don McCanne, M.D.

This very useful Public Citizen report on steps toward single payer at the state level serves two important functions:

1) Although the Affordable Care Act is providing a few beneficial tweaks to the financing of our health care system, by now it is obvious that, by building on our dysfunctional, fragmented system, intolerable health care injustices will be perpetuated. Yet Congress itself is currently so dysfunctional that it is impossible to get them to consider a vastly superior alternative – a single payer Improved Medicare for All.

For those who cannot wait until we are able to elect a sane supermajority in Congress, this report provides suggestions on how some single payer principles could be applied at the state level. Although that pathway is rugged and cannot lead all the way to single payer, at least it would provide more improvement than we are seeing with the Affordable Care Act. There is plenty in this report to keep health justice activists very busy on the state level.

2) The far more important conclusion to be drawn from this report is that states acting alone cannot establish a bona fide single payer system. There are too many major barriers that would prevent states from totally replacing their fragmented financing infrastructure. Under current federal laws, limitations imposed on states would not allow them to capture many of the more effective benefits of the single payer model.

Although states could come much closer to universal coverage, their systems would still perpetuate many of the inefficiencies and inequities that exist today. Without the power of a public, single payer monopsony (a single buyer), improving allocation of our resources would be much more difficult. Although states could improve billing functions, that captures only a very small portion of the profound administrative waste in our system. Any savings on a state level would be very modest and would not be enough to pay for the elimination of uninsurance and underinsurance. Total health care costs would increase even more, when costs are already intolerable.

The lesson? We cannot let up in the least in our efforts to educate the nation on the imperative of a single payer national health program. To be unequivocally clear, that’s NATIONAL.

We cannot use the example of Saskatchewan and pretend that a state can set up a single payer system that could serve as an example for the nation – a model that could be expanded to all states. No. Saskatchewan began with a tabula rasa. They were able to create a de novo single payer system. The Public Citizen report shows us that our existing federal laws create complexities that would prevent states from enacting a financing model that could be held up to the rest of the

nation as an example of the benefits of single payer, even though that is a noble intent of the report. In fact, there is a risk that such an effort would allow opponents to claim, “See, single payer doesn’t work.”

Vermont is currently implementing legislation that originally was intended to bring it a single payer financing system. But they found that a bona fide single payer system is not possible, so they have abandoned the term, “single payer.” That might be wise advice for other state activists.

We cannot allow enthusiasm for state efforts to diminish in the least the exhaustive effort that will be required to reach the threshold of political feasibility that will be a requisite to motivate Congress to take action.