NCPA - National Center for Policy Analysis

The Fantasy of Single Payer Health Care in the States

June 24, 2016

NCPA Senior Fellow John R. Graham writes in the Washington Examiner:

One of the defining characteristics of Bernie Sanders' socialism is single-payer healthcare, a fully taxpayer-funded universal medical system. Single-payer healthcare has long had a following in the United States, but it is unlikely to become federal policy. Obamacare's setbacks have made Americans less confident than ever that the federal government could operate such a system.

So single-payer advocates are focusing on individual states. This November Coloradans will vote on single-payer healthcare. A couple of years ago, Vermont's governor tried to institute it, but gave up short of the finish line. Other states will surely try. I would put Oregon and (maybe) Hawaii at the top of the list of states to watch.

If successful, this would be a Canadian-style roll-out of single-payer healthcare, which began in individual provinces in the mid-20th century and subsequently won federal support. However, there are significant obstacles to any state instituting true single-payer healthcare in 21st-century America, even if the people or politicians choose it.

First, Medicare (which covers most senior citizens) is already fully federal. States have no role in either financing or organizing its care. The system is moving from fee-for-service to managed care delivered under arrangements whereby groups of providers bear financial risk for patient outcomes.

Different models have different labels ("Accountable Care Organizations," "Bundled Payments for Care Improvement," "Alternative Payment Models," "Merit-Based Incentive Payment System"). The models are designed by federal bureaucrats in an office in Baltimore, who are highly unlikely to ever yield power to state counterparts.

Second, Medicaid (which covers most low-income residents) is also largely federal, with over half the money coming from Washington. Although it is operated by the states as part of their welfare bureaucracies, states deliver benefits under strict federal constraints.

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