When Gavin Newsom ran for Governor of California in 2018 Single Payer health care was something of an edgy policy proposal. It was more of a soundbite than an actual proposal in most voters’ minds. Fast forward to 2026 and candidates are almost required to support the idea of Single Payer or Medicare for All or Universal Coverage. These phrases are little more than rhetoric; they all mean different things but get used interchangeably. Advocates began using the term Medicare for All because Medicare is popular among seniors, and voters do not really understand what single payer means. The primary obstacle is that there is no consensus on how to fund radical health system change.
What are the differences between Single Payer, Medicare for All and Universal Coverage? Universal coverage is merely a system where everyone is covered. Obamacare was supposed to be universal coverage because it initially included an individual mandate. Medicare is a type of universal coverage for seniors. Medicare for All would expand eligibility down from age 65 to 0. Medicare for All would require the federal government to expand the program, with states playing a supporting role. It would not necessarily be the same program that exists today, except in name.
What is a single payer system? It is a monopsony. Everyone knows what a monopoly is: it is a firm (or cartel) that can jack up prices because there is only one seller. A monopsony is similar in that it can ratchet down the prices because there is only one payer (i.e., one buyer). A single payer would prohibit competing forms of insurance. It would presumably forbid doctors and hospitals from treating patients privately. If there is only one payer, that means hospitals, doctors, nurses, physical therapists, and clinics must accept whatever fees the single payer establishes.
Rationing by Waiting: it has often been said that single payer systems have wait lists, because there are not enough doctors and hospitals. Waiting lists (queues) are a form of rationing, which is a feature of single payer systems, not a bug. Rationing care by waiting saves money by investing in less equipment and providing fewer services. At least in theory, capacity runs at nearly 100% of the resources available. Most patients get better or survive until they get treated. Some die.
Hospitals: Around 35% of health care spending occurs in hospitals. Some data suggests it could even be higher. Hospitals could be privately owned or nonprofit. However, their fees would be capped at rates far below what private insurers currently pay. It could be Medicare rates, or possibly Medicaid rates. In Canada (and elsewhere), individual hospitals also have a global budget to treat all who seek care. Thus, they have an incentive to withhold care rather than oversupply care. A similar restraint would need to occur under an American single payer system.
Drugs: Single payer systems tend to ration drugs and impose price controls. America carries the world in drug research and development. This would stop if drug prices were controlled. In a system often called the Post Code lottery, some British NHS regions get a bigger supply of advanced drugs than others. Your odds of getting the latest cancer therapy may depend on where you live.
Doctors: Physicians would not necessarily have to work for the government, but their incomes would be capped and reduced, especially if they are self-employed. Physician working in countries with a national health care system earn far less than American physicians, often about half of U.S. incomes. Some Canadian doctors report closing their practice for part of the year due to their annual income quota having been met. There would need to be a mechanism to alleviate these perverse incentives.
Financing: This is the hard part. When single payer systems set prices, they are purposely set low to reduce costs. Lower prices result in shortages of care, further reducing costs. There are more than 10,000 prices for health care services and setting the appropriate prices would be difficult. It would also become highly political. Another problem that single payer proponents face is they do not like ordinary people having to reach for their own wallet when accessing care. That removes the most logical funding source for routine care. Proponents always try to shift costs to others, such as rich taxpayers, middle-class taxpayers, employers, corporations, federal government, or through excessive consumption taxes. It is naïve to think there are enough rich people in the US to provide free medicine for everyone. Employers too cannot (nor should they) be responsible for free medical care for the masses. It is also naïve to think free medical care should be painless for ordinary Americans. Money does not grow on trees. Politicians would have to create another payroll tax, about equal in size to social security dedicated to health care. There would need to be cost-sharing, copays, deductibles and so forth. These cost saving strategies are common in private health insurance but are concepts proponents of socialized medicine dislike.
Concussion: There are numerous insurmountable obstacles to implementing any kind of radical health system change. Most of the characteristics or requirements for a single payer system are currently not feasible for a variety of reasons, mainly political. Seniors too may object to expanding Medicare. There are nearly 70 million Medicare beneficiaries and 82 million Medicaid and SCHIP enrollees. Employee health plans cover about 154 million people. They are likely the ones who will be least happy switching to public health plan. However, proponents willing to expend political capital on reinventing our health care system would be wise to look to the health care system in Singapore as a model.
If the new Medicare tax is set honestly at about 14-16 per cent, it will be wildly opposed in Congress.
In the second to the last paragraph I wrote, “Another problem that single payer proponents face is they do not like ordinary people having to reach for their own wallet when accessing care. That removes the most logical funding source for routine care.”
Then later the day my article was posted I read about an asinine proposal from the left-of-center Searchlight Institute. They propose making primary care available for free, as part of Obamacare’s essential mandated benefits, saying:
“We know very, very well that getting people better primary care is a conduit to better overall health,” said Bowen, who led the policy report, which was first shared with NBC News. “It’s conduit to savings, and we want to make sure that people are not dissuaded by cost from doing that. We also provide a new way of expanding people’s coverage to recognize the reality of families today.”
First of all, there is no research that finds boosting primary care has beneficial effects on health status. There is plenty of research that finds boosting prevention does not save money in the long term. It follows that boosting primary care would raise, not lower costs. There is nothing wrong with boosting primary care if consumers are paying the cost directly.
Source: https://www.nbcnews.com/politics/politics-news/democrats-free-primary-care-all-healthcare-elections-rcna345145
I literally read an article a few days ago about a new report arguing Democrats should try to mandate primary care as an essential health service, thus making it free. That would render most primary care visits worthless (just like the annual wellness visit).