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An Expensive Experiment With Single-Payer Health Care

When lawmakers in the lower chamber of New York's General Assembly voted for a single-payer health care proposal in mid-May, they waved off concerns about how to pay for it. Lawmakers in the California Senate did the same, voting in early June for a single-payer plan without first conducting a full-fledged analysis of how much it would cost.

As lawmakers in D.C struggle to make headway on federal health care policy, states are looking for their own solutions. In Democrat-controlled state capitols, that means taking a look at single-payer plans that would sweep aside private health insurance in favor of taxpayer-funded options.

But try as they might, these lawmakers can't ignore the price tag. Most states operate under rules that require balanced budgets, so a massive new expense such as single-payer health care requires an equally massive increase in taxes. Thanks to the proposals in California, New York, and elsewhere, we're starting to get an idea of exactly how massive.

Efforts to implement single-payer have been tried in both large and small states, in states that are growing quickly and states that aren't. Despite those variables, one thing remains fairly constant: Such programs require at least twice the amount of revenue consumed by every other state-level program in a single year.

Analyses of the New York Health Act say it would cost between $92 billion and $240 billion annually. Currently, New York's entire state budget totals a little less than $80 billion.

Vermont's state legislature approved the creation of a single-payer health care plan in 2014, but funding the program would have required an extra $2.5 billion annually—double the state's current budget—and state lawmakers blanched at the 11.5 percent payroll tax increase and 9 percent income tax increase needed to fund it. In Colorado, voters last year soundly rejected a single-payer plan that came with the promise of a 10 percent hike in payroll taxes.

California's single-payer plan would be even more expensive: about $400 billion annually. That state's particularly generous proposal would cover all medical expenses (no out-of-pocket payments or co-pays) for U.S. citizens, permanent residents, and undocumented immigrants.

Polling shows a relationship between the cost of single-payer and how much voters like it. A June survey from the nonpartisan Public Policy Institute of California found statewide support for single-payer at 65 percent, but that number dropped to 42 percent when respondents were told at least $50 billion in new taxes would be required to make it happen. And that $50 billion figure was optimistic.

Even if states can find a way to get the revenue to make these systems functional, they may run into another problem: The whole thing could be against the law, since setting up single-payer health care at the state level would require a Medicaid waiver from the federal government. That's less than a sure bet with a Republican in the White House.

It's fair to question whether there is any state where the political, fiscal, and legal hurdles to single-payer can be overcome. Still, opponents of government health care would be wise to notice what's happening: Democrats are testing the waters by using a handful of blue states as the laboratories of democracy that they are. They have yet to find a system that survives, and perhaps they never will. Then again, Thomas Edison claimed to have figured out how to make a light bulb by failing 999 times first.

Republicans are learning that lesson now. The GOP for years used its control of state governments to block aspects of Obamacare it didn't like, but the party did little experimentation with new health care policies to find the intersection between what its voters want and what it could reasonably deliver.

We don't know what the outcome of the Democrat-led experiments with single-payer will be, but keeping the issue in the media spotlight while trotting out state-level proposals will give the party some idea of what to do (or not to do) when it has another shot at setting the agenda in Congress and the White House.

Photo Credit: Joanna Andreasson

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  • DajjaI||

    The problem with single-payer is not just the short term costs, but in the long term a whole new class of citizens will literally be born of it. And they will thank (blame) their existence on it and they will MAKE IT PAY.

    Jill Stein approves this message - even at the risk of getting banned by Reason's new Russian overlords.

  • ||

    But it'll pay for itself. EVERYTHING pays for itself!

    Stay away from single payer. Once the government has the final say, you're done.

    In Canada, the people are slaves to the bureaucracy when it comes to health and education (in Quebec French-Canadians do not have the right to send their children to the school of their choice on the English side because of Bill 101).

    They say health and education is a basic right but yet they have no say on how it's run and developed. Ironic no?

    I don't think people appreciate how grotesque this idea really is. 'Thanks for handing over your health and education responsibilities to us. You did the right thing. Now go sit down and shut up. We'll take it from here.'

  • Citizen X - #6||

    A few years later: "You fucked up. You trusted us."

  • Shirley Knott||

    Words that no politician will ever utter.
    As Pratchett noted "The truth will make you fret".

  • sarcasmic||

    Remember that "The Public" means "Everyone Except You."

    What that means is that you serve the servants, because the servants serve everyone except you.

    Education and health care are being provided in a manner that best serves everyone except you.

    Considerations will be given to everyone except you.

    And in practice "everyone except you" of course means "no one."

  • Shirley Knott||

    "Everyone except you" of course means "us". Us and them, it really sucks to discover you're one of 'them', not one of 'us'.
    But the only way to become one of ''us' is to become a 'public servant', then you get to make decisions for and about 'them'. Damn them!

  • Sevo||

    "Everyone except you" of course means "us". Us and them, it really sucks to discover you're one of 'them', not one of 'us'."

    Didn't save the link, but right after O-care was implemented (as much as it was), there was an interview of a woman who was a fervent supporter.
    Until she got the bill for her new premium, when she clearly stated:
    "I knew somebody was going to have to pay for it, but I didn't think it was going to be ME!"
    Her honesty was refreshing; her stupidity, not so much.

  • I'm Not Sure||

    Both Vinson and Waschura have adjusted gross incomes greater than four times the federal poverty level — the cutoff for a tax credit. And while both said they anticipated their rates would go up, they didn't realize they would rise so much.

    "Of course, I want people to have health care," Vinson said. "I just didn't realize I would be the one who was going to pay for it personally."

    http://www.mercurynews.com/201.....-bay-area/

  • Sevo||

    Thank you.

  • Qsl||

    One of the things never made clear in the single payer schema is a breakdown of the costs. I mean it is fine to say the program will cost 50 billion or whatever, but where does the money actually go?

    Suppose the program operates at near 100% efficiency. That mean the total cost of healthcare for a given state is 50 billion. If a state says that is unaffordable, they're implying their economy can't support a basic function. Wha?

    One of the arguments for single payer was that it was supposed to improve efficiency. Now it appears that isn't the case, or there are enough health problems that go untreated that probably affects the economy in other ways that isn't being accounted for.

    I would just like some actual numbers. I could even concede a hybrid system just to replace the throngs of people clogging the ERs with a sore throat.

    But first I want actual numbers.

  • BYODB||


    I would just like some actual numbers. I could even concede a hybrid system just to replace the throngs of people clogging the ERs with a sore throat.

    Do you even realize why the E.R. is so clogged? It's because it's the model of what a single-payer system would look like functionally due to already existing legislation.

    Oops!

  • Qsl||

    Do you even realize why the E.R. is so clogged?

    Um, because hospitals who accept government money have to accept government rules? Because legislation was enacted due to patient dumping as far back as the 1800s was formally federalized as in the intervening 100 years private business had no other response than to shrug?

    You do realize hospitals can turn away patients?

    But thank you for your minuscule contribution as well as your clairvoyance.

  • ThomasD||

    Forseeable consequences are not unintended consequences.

  • Fred G. Sanford||

    And yet the people of Canada haven't repealed it.

  • Enjoy Every Sandwich||

    Most states operate under rules that require balanced budgets, so a massive new expense such as single-payer health care requires an equally massive increase in taxes.

    That's why it needs to be done on the national level! The feds can just keep ignoring the cost of Big Government, the way they've been doing for years now. Besides, we just owe it to ourselves! Socialist worker's utopia for the win!

  • some guy||

    We don't know what the outcome of the Democrat-led experiments with single-payer will be

    Oh, I think we know exactly how they'll turn out. Expensive, with long wait lines and sub-par service. Private insurance and providers will then take the blame for why the system doesn't work well.

  • Citizen X - #6||

    Until private providers are outlawed, at which point it will be the fault of all the wreckers driving to Mexico to get amoxicillin for their kids' strep throat.

  • some guy||

    Well, at first they'll be driving to Nevada and Arizona...

  • BYODB||


    Analyses of the New York Health Act say it would cost between $92 billion and $240 billion annually. Currently, New York's entire state budget totals a little less than $80 billion.


    So the real price tag is probably somewhere around 1 trillion dollars a year, right?

  • BYODB||


    California's single-payer plan would be even more expensive: about $400 billion annually. That state's particularly generous proposal would cover all medical expenses (no out-of-pocket payments or co-pays) for U.S. citizens, permanent residents, and undocumented immigrants.


    So basically California is offering healthcare to the entire planet, as long as they can get there, on the taxpayer dime. Yeah, I see no downsides to that plan. Thank god they can mostly only spend their own money on such a plan. It's one of the dumbest things I think I've ever seen the government do.

  • Sevo||

    "So basically California is offering healthcare to the entire planet, as long as they can get there, on the taxpayer dime>"

    The imbeciles backing the plan are not bright enough to imagine the result, but, yes, you are 100% correct.
    And the cost 'admitted' by the proponents, faulty as it is regarding current residents, totally ignores those who find it far cheaper to move to where there is 'free' medical care than to stay where they are.
    We have an actual gov't multiplier here; can we assume a 10X multiplier for the 'estimated' costs? I thin k we can; it's California!

  • CatoTheChipper||

    Under single payer, the state makes the determination of whether your premature baby lives or dies and denies your elderly mother a choice between a pacemaker or (in Obama's words) "uhh, taking the painkiller".

    But, you can bet that Nancy Pelosi will still get her botox and the likes of Dick Cheney will get a new heart when needed.

  • BYODB||


    But, you can bet that Nancy Pelosi will still get her botox and the likes of Dick Cheney will get a new heart when needed.

    Absolutely. What the idiots don't understand is that when you ration a limited resource like healthcare (that being the labor of Doctors and other healthcare providers) than inevitably you end up in a utilitarian situation where your personal contribution and value to society as a whole is examined to determine if you actually receive care or if you're just not worth the cost.

    A lot of these unemployed or professional protestors should probably stop and think a second if what they do can actually be considered a value-added contribution to society over, say, their political leaders or even just someone who has a productive job.

    Spoiler Alert: They'll be left to die along with most of the non-productive class they cite as the people they want to help.

  • RodgerMitchell||

    That is the con job the health insurance companies want you to believe. Why? Because single payer takes the place of private health care insurance.

    Those are the same scare stories the insurance companies circulated when Medicare was proposed.

    All lies that the public eats up.

  • flyfishnevada||

    "Analyses of the New York Health Act say it would cost between $92 billion and $240 billion annually."

    So that means it's more likely to be around $350-$400 billion.

    This is how it should work but can't thanks to Obamacare. Just repeal the damn thing and let individual states figure it out. As a resident of Nevada, I can see a hospital just west of Vegas run by Wynn or Harrah's with cheap, free market health care. Get a room, visit the spa, play blackjack and get your knee replaced. Hey, if you're a high roller, they might comp your wife some new boobs. Californians would stream across the border to avoid the long waits and sub standard care in their government run system and all while the progressives swear they have the best health care in the world in the Golden State.

  • RodgerMitchell||

    It's all a fake. States are not a representative test case. States are monetarily non-sovereign. They can run short of dollars. They would need to raise taxes to support a Medicare for All plan.

    By contrast, the federal government is Monetarily Sovereign. It never can run short of dollars. Even if FICA were $0, the federal government could provide Medicare to every man, woman, and child in America.

    Sadly, the public has been brainwashed into believing federal finances are like state finances, so Medicare for All would be "unsustainable."

    Total nonsense.

    The federal government actually creates dollars every time it pays a bill.

    The state "test" is not a test. It is a clever trap designed to "prove" we can't afford Medicare for All.

    The federal government never has and never will run short of its own sovereign currency. The "unsustainable" arguments are a giant con job.

    And no, it won't cause a Weimar hyperinflation. That is another con job. The U.S. federal government has the unlimited power to give the dollar any value they choose. That is another feature of Monetary Sovereignty.

    But the public, being ignorant of economics, will believes the pols.

  • Mike Balfe||

    Speaking of being ignorant of economics, your comments are an example of the pot calling the kettle black.
    Fiat currency created by the "monetary sovereign" does not create worth or value, although it certainly can destroy it.
    Witness Venezuela's plight.

  • ThomasD||

    Zimbabwe has never run short of their own sovereign currency either. They just had to start adding expiration dates to the bills.

    That worked out swell.

  • mpercy||

    I have several Z$1,000,000,000 (one billion) Zimbabwe bills. Printed in July, expire in December.

  • Sevo||

    RodgerMitchell|9.14.17 @ 5:36PM|#
    ...
    "The federal government actually creates dollars every time it pays a bill."

    Folks, the idjit known as RodgerMitchell was, and is, imbecilic enough to post that comment.
    I want you all to remember the nest time you see a comment by RodgerMitchell that s/he is an ignoramus stupied enough to post something like this in the hopes it would be accepted as a valid argument!
    Hey, RodgerMitchell, slaver! Fuck off!

  • zombietimeshare||

    Let the states do it, and if (when) it fails, don't bail them out. Let them own the failure.

  • TJJ2000||

    The states are SUPPOSE to handle it - that's outlined in the Constitution! It has no right being a federal issue. I'm glad democratic states are testing the waters. They have that right. THEY DON'T AND NEVER DID have the the right to force on the entire country! That is the disturbing part.

  • ThomasD||

    But, good intentions. So, shut up.

  • Empress Trudy||

    Just triple or quadruple taxes. No worries.

  • Empress Trudy||

    Just triple or quadruple taxes. No worries.

  • Empress Trudy||

    Just triple or quadruple taxes. No worries.

  • Empress Trudy||

    Just triple or quadruple taxes. No worries.

  • Delius||

    Taxes, or comments? I'm confused.

  • tommhan||

    Why would anyone support Medicare for all? With Medicare we have to pay for part B and then get a policy or policies for a supplemental health ins and prescription insurance. Many are scared to retire because of the health care expense put on them as soon as they retire even as their income goes down.

  • Fred G. Sanford||

    When compared to private insurance, it's generally more affordable. I know plenty of people who only work to get health insurance and plan to retire as soon as they are eligible for Medicare.

  • MikeyB||

    Sure it's "more affordable".

    #1 Medicare doesn't reimburse nearly as well as private insurance
    #2 Medicare doesn't include operating costs (it's all hidden in your taxes)
    #3 Their patient load is low compares to payouts...in other words...older people have more medical care so per-person costs can be a bit cheaper for operations.

    Once you include "everybody" and doctors go broke taking Medicare payments the whole system will collapse.
    Doctors already limit and refuse Medicare patients due to low reimbursement rates.

    I have my own solution....put financial into the system.
    #1 All provders must charge the same to ALL customers -- including Medicare (though that might have be phased in since Medicare would have a lot of catchup to do). No deals for insurance companies or anybody. This means your insurance plan would be accepted at more places.
    #2 All providers must publish their rates.
    #3 Patients can use whatever provider they desire...but if they pick a provider who is less than say, the 70 percentile the patient will get 50% of the cost difference. For example, you need your tonsils out. Cost runs $4000-$7000 with 70 percentile at $6000. You pick a place that costs $5000. You get $500 from your insurance company.for being a smart shopper and the insurance company saves too. So everybody is motivated. Providers are motivated to minimize costs, patients and insurers to pick the least expensive, and other places to provide apps so you can find the cheapest solution.

  • Galane||

    "We don't know what the outcome of the Democrat-led experiments with single-payer will be,"

    Bankrupt States and people leaving for States where they don't do so many stupid things.

  • Myk||

    Blah blah blah, billions, trillions TAXES oh my!
    Unless you're talking increasing every 2 person household's taxes by $12,000-$20,000 and the system actually allows doctors to doctor it's cheaper than paying for insurance and what insurance denies. I guess I could bother looking up the populations and do that math but I figure if it was really scary the math would already be done to present the fear on a personal level instead of hiding it in big scary numbers.

  • Sevo||

    Myk|9.15.17 @ 1:53AM|#
    "Blah blah blah, billions, trillions TAXES oh my!
    Unless you're talking increasing every 2 person household's taxes by $12,000-$20,000 and the system actually allows doctors to doctor it's cheaper than paying for insurance and what insurance denies."

    You're full of shit.

  • Delius||

    That's less than a sure bet with a Republican in the White House.

    Wait, did Trump get impeached and tossed while I wasn't looking?

  • mpercy||

    I guess I can't fathom why people want health-care that is delivered by the same people that brought us the VA failures, FEMA failures, the TSA (one big failure), and the IRS.

    OTOH, if we get single-payer like California is offering, I'll be all over that. Wife and I are rapidly approaching the point in time where we could retire--everything's paid for, good savings in place, etc. Of course, our tax bills will drop from 6-figures to next-to-nothing, so we won't be paying for the boondoggle.

    And to amuse myself, I could see the doctor every day, it's free right? I've barely seen one in 30 years--knock wood--but I'll need a hobby.

  • Praveen R.||

    Actually single payer is not fully bad. What I would like to see is a grand compromise. Give the liberals single payer which covers preventive care and come up with a classification of ailments that don't require complicated care. Redundant lab tests can be eliminated. The economies of scale will result in a healthier nation at lower cost.Seriously, if the system is run well, it shouldn't matter much where I get my annual screenings. And people with medicaid and medicare have the option for single payer for all their coverage.

    However, i do not want single payer for all care. I still want flexibility in the system where I would want to subscribe to a certain kind of care program and I get a tax credit for not using my single payer coverage for higher level care. The private care programs can tie into the single payer system to access my lab tests.

  • swampwiz||

    Of course, what conservatives forget to mention is that even though $X would be spent on MediSomething-For-All, as it stands $Y is already spent by everyone - individuals, employers, the government - so if Y < X, and if not immediately, some time in the future, then it could be a good thing.

  • Sevo||

    swampwiz|9.15.17 @ 8:06PM|#
    "Of course, what conservatives forget to mention is that even though $X would be spent on MediSomething-For-All, as it stands $Y is already spent by everyone - individuals, employers, the government - so if Y < X, and if not immediately, some time in the future, then it could be a good thing."

    Of course, what proggies hope to do is pass that sort of horseshit off as something other than horseshit.
    It's not, swampwiz. It's horseshit, and I'm guessing, as a brain-dead lefty, you are stupid enough to believe it.

  • MikeyB||

    And does anybody know if the proposals assume Medicare reimbursement rates?
    Medicare rates are horrible and don't even come close to covering costs for doctors and hospitals.
    We subsidize Medicare with private health insurance reimbursements.
    I'm on Tricare which uses Medicare rates. And I see things like 15% reimbursement rates of the billed amount.
    If the cost estimates assume Medicare rates then they are still far below the actual long term cost since Medicare rates will not support the medical establishment. Doctors are already limiting and refusing Medicare patients due the terrible reimbursement which they HAVE to take.
    If you take NY's population of 19,889,657 and 2015's per capita health care expenditure of $9990 you get $198.7B of revenue needed to cover costs.
    And that doesn't include the recent cost increases in the last couple of years which will continue to increase due to the bad policies of unlimited benefit and covering all sorts of voluntary things and the pre-existing mandate.
    I just talked to a farmer who is paying $1750/month with BlueCross with a $13,000 deductible. That's $34,000/yr before insurance kicks in.

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