The single payer movement expands

A Pennsylvanian nonprofit advocates for the system rather than HIXs

Tammy Worth, Contributing Writer  http://www.healthcarefinancenews.com   March 14, 2014

Even as the Affordable Care Act is in its nascent stages, some states are already looking toward 2017 when they can request waivers to opt out of the healthcare exchanges. And a small, but persistent, movement has popped up toward a single payer system as an alternative to participating in the exchanges.

That grassroots movement is taking place in Pennsylvania.

Under a single payer plan, said David Steil, president emeritus of HealthCare4AllPA, insurance companies “will have to look at changing their business model, but they won’t go out of business.”

In March 2013, a report exploring the single payer system in Pennsylvania was created by Gerald Friedman, professor of economics at the University of Massachusetts at Amherst. He found that a single payer system would cost $128 billion in 2014 as opposed to the current system, which costs $144 billion. It would save 11 percent ($16 billion) of healthcare costs in 2014, mainly by lowering spending on administration and reducing drug costs.

But adopting a single payer system would dramatically change the business of healthcare. And the examples to follow are nearly non-existent.

While rumblings of moving to a single payer system have been heard in states such Hawaii, Oregon and New York, only one state – Vermont – has passed legislation to move toward actually creating a single payer system.

Vermont, which already has 93 percent of its population insured, passed Act 48, which allows the state to begin preparing a single payer system. It requires the state to set parameters for minimum benefits, create a finance plan and put out a contract for an administrator of the program, and allows the state’s current insurance regulatory body to create a benefit package.

Robin Lunge, Vermont’s director of healthcare reform, said that Vermont’s goal is to move the issue of healthcare completely away from the employer. Vermont’s single payer system, she said, would be similar to the one state employees are already on. It would be financed through an employer and individual tax as well as the premium tax credits and subsidies provided through the exchanges.

In Pennsylvania, the single payer system Friedman based his report on would be funded through a variety of means, including a 3 percent income tax on individuals, a 10 percent payroll tax for employers and various federal and state funds.*

The state’s Medicare, Medicaid and Veteran’s Administration programs would continue to operate as usual under a plan similar to Vermont’s. In Vermont’s potential single payer system, the system would act as a supplement to government insurance and cover everyone who is uninsured or part of the current state health exchanges.

 

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