Michigan lawmakers are attempting to set up a single-payer health care system that would provide medical, dental, and mental health care benefits without deductibles, copays, or premiums and promises to reimburse providers 25 percent more than current Medicare rates.
State Rep. Carrie Rheingans (D-Ann Arbor) introduced House Bill 4893 with 22 co-sponsors, but a big question looms: who would pay for it?
Rheingans envisions a trust with funding from a variety of sources, including federal funds and state bonds, according to an article on the website State of Reform.
“We’re hoping the federal administration will approve a Medicaid waiver to allow Medicaid funding to be used,” said Rheingans.
For the first time in 40 years, Democrats have full control over both chambers and the governor’s office. In 2018, during her first gubernatorial campaign, Gov. Gretchen Whitmer (D) said single-payer health care is “unrealistic,” news media reported, but supported such an idea “in concept.”
Money Is a Problem
Between 2010 and 2019, 66 unique single-payer bills were proposed by legislators in 21 states, according an article published by the University of Pennsylvania Law Review.
Over the past two years, Washington and Oregon have been looking for ways to fund the implementation of their single-payer systems. Officials are still working on the problem.
Vermont pulled the plug on its single-payer plan in 2014 because it would have required an 11.5 percent increase in payroll taxes and a 9 percent increase in state income taxes.
‘Progressives…Blame the Insurance Companies’
If Obamacare was doing what it was promised to do—provide affordable access to health insurance regardless of pre-existing conditions—states would have no need to push single-payer systems, says Devon Herrick, a health care economist and policy advisor to The Heartland Institute, which publishes Health Care News.
“Progressives are lulled into this idea that they can do it better if only we had the power of government,” said Herrick on The Heartland Daily Podcast, on September 7. “Now they blame the insurance companies.”
Herrick says the states typically go to the federal government first and ask to have full control of all the money the state receives for Medicare and Medicaid. States then approach employers asking for the same thing.
“And then they say, we’ll decide what they’ll get back,” said Herrick. “Most of these proposals involve a payroll tax of about 10 percent and what they find, repeatedly, is 10 percent is not enough. Not for what they want to do, which is often a Cadillac health plan at bargain basement prices.”
Vermont dropped its single-payer system when tax rates needed to be doubled. Colorado eventually voted down its single-payer proposal, and in California, “it seemed like it was quietly dropped when it was discovered the health budget would have been triple the size of the entire state budget,” said Herrick.
AnneMarie Schieber (amschieber@heartland.org) is the managing editor of Health Care News.