Congress has dropped “Medicare for All” for now. But lawmakers in several states are now taking over.
In California, Democrats are calling for “universal, single-payer health care” as part of their party platform. A bid to install such a system failed in the California Assembly in late January, but Golden State leaders have promised to make another attempt.
At least a dozen other states — including Massachusetts and New York — are considering bills that would ban private health insurance and establish single-payer health care. This is bad news for ordinary Americans. It makes little sense to force nine out of 10 Americans to give up their current health plans as part of a campaign to achieve universal coverage.
About two-thirds of insured Americans currently rely on private health insurance plans. About 177 million people have coverage through an employer and about 34 million people purchase private coverage directly.
A single-payer system could eliminate all of these plans.
Plus, Americans love their private plans. In a recent study of people with employer-sponsored coverage, more than two-thirds said they were satisfied with their insurance. More than three-quarters were confident it would protect them in a medical emergency.
Research by the Kaiser Family Foundation found that support for single-payer declines when people factor in the consequences that come with it, such as higher taxes and delayed processing.
Analyzes of state-specific single-payer plans suggest the downsides would be severe.
The New York Health Act, for example, would cut employment in the Empire State by 315,000, according to a study published last year by the Equal Opportunity Research Foundation. Another report found that if the bill becomes law, New York residents would have to pay some $250 billion in new taxes.
More than 95% of New Yorkers already have health insurance. Why tear down such a high-cost health insurance system that successfully covers more than nine out of ten state residents?
In addition, single payer will lead to lower quality care. Indeed, government payers rely on lower payments to hospitals and physicians to control costs. Look no further than health insurance. The American Hospital Association says hospitals only get 87 cents for every dollar they spend treating Medicare beneficiaries.
This is obviously not sustainable. If a single-payer system – and its low payment rates – were widely adopted, doctors and hospitals would respond by reducing the supply of care they are willing to provide. Some providers would decide to leave the sector.
This shrinking supply, combined with unlimited demand fueled by free health care at the point of care, could lead to long waits.
Just ask the Congressional Budget Office. According to recent CBO analysis, a single-payer system would lead to more “unmet demand” for healthcare services, “greater congestion in the healthcare system” and “lower payment rates.” .
Lawmakers in several states have responded to concerns like these by championing a supposedly more moderate public option — a government-run insurance plan that would supposedly compete with private options.
But any public option would also reimburse providers at lower rates than private plans. The public plan would use this pricing power to set lower premiums and deductibles than private insurers. As people moved to the cheaper public option, private insurers would gradually exit the market, until only the public plan remained.
In fact, a study by FTI Consulting found that if the federal government introduced a public option, at least 14 states would have no private options left by 2033.
A public option is just a slower way to introduce single payer. And single-payer health care is a cure worse than the disease.
Janet Trautwein is CEO of the National Association of Health Underwriters.