A Preview for Single-Payer Healthcare

Colorado May Approve an Initiative Next Month
Roger Collier

When Vermont Gov. Peter Shumlin dropped his support for Green Mountain Care a year and a half ago, it looked like single-payer healthcare in the United States might have taken a fatal blow.

But no! A couple of thousand miles away, in Colorado, a new single-payer proposal is on the November ballot and might even pass.

ColoradoCare would put in place a quasi-state-administered health plan covering almost every resident of the state. Paid for by a “premium tax” on businesses and individuals, it would provide a wide range of benefits for residents not covered by any federal government program (but including those now enrolled through ACA insurance exchanges). It also would pay for Medicaid services at the same rates as other residents and provide supplemental Medicare coverage.

Predictably, the ballot measure to create the program faces strong opposition from insurers and most business owners.

We’ll have to wait to see what happens in November (and as events in Vermont have shown, ballot success doesn’t mean implementation will follow). However, we can identify issues that all single-payer proposals face.

People don’t like government. Realistically, single-payer universal coverage can only be achieved by government—state or federal. Funding must come directly from government, or as a result of a tax, or through a government mandate forcing citizens to pay premiums (as the ACA has attempted to do). ColoradoCare tries to deal with the issue by creating a new governmental jurisdiction controlled by an elected board independent of the state’s executive and legislature but, even so, is being painted by opponents as “socialized medicine.”

People really don’t like taxes. the Affordable Care Act tried to duck this problem though a combination of mandates and subsidies. States, however, can’t impose effective tax penalties on those ignoring a mandate. (It turns out that the Obamacare penalties aren’t too effective, either.)

What will employers do? A switch to a single-payer system like ColoradoCare (with costs split between employees and employers) will mean that some employers will pay less and some will pay more than at present. The same is true for employees. Two questions arise. Will employers paying less increase their employees’ wages (especially for employees paying more than currently)? Will employers paying more (including some paying for coverage for the first time) cut their staffs or impose wage reductions?

What will providers do? Providers may welcome having to deal only with a single insurer, but may be less happy with the increased care load resulting from a single-payer’s fewer restrictions and more enrollees.

Will the federal government give their approval, and when? Implementation of single-payer will require waivers from both ACA and Medicaid regulations. Section 1332 waivers (which require approval by CMS and the Treasury Department) allow changes to ACA rules provided there is no reduction in benefits or numbers covered and the waiver does not increase the federal deficit. Section 1115 waivers allow changes to state Medicaid programs provided the changes are budget-neutral to the federal government. If waivers are granted, a single-payer state would pick up the tab for any increase in per capita Medicaid costs and for any reduction in ACA mandate penalties otherwise collected by the federal government.

No 1332 waiver has so far been processed, but the generally less complex 1115 waivers take on average almost a year for approval in spite of the experience of both states and CMS evaluators.

The bottom line? Single-payer offers many advantages: guaranteed coverage, lower administrative cost, no “employer lock,” better continuity of care, and fairer funding. On the other hand, the “re-contouring” of the playing field means there will be winners and losers—and the potential losers will vigorously oppose it.

Roger Collier is a healthcare consultant and editor. A version of this article originally appeared at The Health Care Blog.