Looking at proposals for single-payer healthcare in the US

The US has no shortage of plans for establishing universal healthcare. While most proposals focus on expanding access to care through private coverage and government programs, a half dozen federal and state plans would expand government programs to cover everyone.

The background

• That includes US Sen. Bernie Sanders’ (I-Vt.) Medicare for All proposal, which would extend Medicare coverage to all US residents, gradually phasing the entire population into Medicare after three years by gradually lowering the eligibility age. The proposal raises the possibility that it could be funded through payroll taxes but largely defers the question of financing to be determined later.
• US Sens. Jeff Merkley (D-Ore.) and Chris Murphy (D-Conn.) have proposed the Choose Medicare Act, which would establish a new Medicare program, Part E, which employers or individuals could purchase. The plan would provide coverage for the most important medical events, such as maternity, mental health, preventive, and inpatient and outpatient care. Employers and individuals would pay for it; the plan largely eschews a significant push in federal funding.
• The Medicare X Choice Act, introduced in the US Senate by Sens. Tim Kaine (D-Va.) and Michael Bennett (D-Colo.), would allow consumers buying nongroup policies on the ACA exchanges to buy into Medicare if they live in a county with one or fewer insurers selling plans on the exchange. Eligibility would expand to the entire country after 2023. A reserve fund pulled from the US Treasury would fund it.
• Three states—California, New York and Pennsylvania—have considered single-payer models; none have passed. California’s attempt combined federal and state programs, eliminating the need for employer-sponsored insurance. It would provide expansive coverage for almost all medical needs with almost no cost-sharing requirements for beneficiaries. The plan’s high price tag—$400 billion annually, according to a state Senate report—has made it all but impossible for the Senate to pass.
• New York lawmakers have debated a single-payer measure each year since 2016. The most recent version would allow New Yorkers to enroll in a Medicare-like state program that would extend eligibility to all state residents and provide comprehensive coverage. Residents could choose to buy in. It would be funded by state and federal dollars currently going to Medicare, Medicaid and children’s health programs. As in previous years, the bill passed the Assembly but remains stalled in the Senate.
• Legislators in Pennsylvania proposed a measure in 2011 to create a state-run health plan open to all residents that would meet ACA coverage requirements without cost-sharing. The plan would be paid for using income and payroll taxes and state funding. The bill was ultimately unsuccessful.

The data

HRI impact analysis

Most proposals would expand coverage using existing public and private frameworks.

Most new growth has come in this area, as can be seen through the ongoing expansion of Medicare Advantage. This continuing shift creates opportunities for payers. Under new models, payers would likely maintain their presence in network and claims management, though they could expect to see administrative savings, increased regulatory burdens and greater compliance requirements. Remaining flexible, reducing redundant processes and capitalizing on opportunities for savings under new regulations are key.

Payers that focus on developing supplemental products, investing in retail capabilities and expanding core competencies like fraud prevention will find themselves positioned to continue adding value even in the face of systemic change.