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May 2019  Volume 17, Number 5        

health care law book

What a Single Payer Health Care System Could Mean to You and Your Employees

Many of the contenders for the Democratic presidential nomination are making expanded health care access part of their campaign.

With proposals ranging from eliminating private health insurance to expanding existing public programs, it's clear that some form of single-payer health care will be a big part of the Democrats' 2020 policy platform.

Single-payer health care is a general term used to describe a health care system that is run by the government and funded by taxes. There would be no co-pays, deductibles or insurance premiums. However, income and payroll taxes would increase. Also, there would be little to no private insurance, no employer-sponsored health care and probably no Affordable Care Act federal and state insurance exchanges.

Here's a quick primer on some of the proposals and what they would mean to you and your employees if they become reality:

Medicare for All

In its current form, Medicare provides health insurance for Americans age 65 and older and for those with certain diseases or disabilities. The government determines the prices it pays doctors and hospitals. Those who are interested can enroll in private Medicare plans that offer additional benefits.

Sen. Bernie Sanders, an Independent from Vermont who ran for president in 2016 and has announced his interest in running in 2020, introduced the "Medicare for All Act" bill in the Senate. The bill was co-sponsored by 16 others, including other presidential nominee contenders: Democrats Kamala Harris of California, Elizabeth Warren of Massachusetts, Cory Booker of New Jersey, and Kirsten Gillibrand of New York. A similar proposal introduced in the U.S. House of Representatives by Democratic Rep. John Conyers of Michigan has 117 co-sponsors.

The bill's proposed health care system differs from traditional Medicare coverage in that all Americans would be covered for emergency surgery, prescription drugs, mental health care, and eye care without paying a copay. There would be no private health insurance because duplicate coverage would be forbidden.

To help pay the costs, employers would pay higher taxes instead of paying for private plans.

Public Option. The public option is a compromise between a single-payer system and our current system, where only certain Americans qualify for government-run programs. Public-option plans would allow middle-income, working-age adults to also pay for a public insurance plan instead of a private insurance plan.

Socialized Medicine. Currently, there are no serious proposals to fully socialize the United States health care system. Socialized medicine is government-run Medicare, but the government also manages hospitals and employs doctors. Britain has a socialized system, and the United States has a socialized system for military veterans through the Department of Veterans Affair. The government owns hospitals; employs medical providers; and negotiates directly with pharmaceutical companies for drugs.

Universal Coverage. Countries with universal coverage have private health insurance plans, but include heavy regulations and government subsidies to make the premiums affordable.

Single Payer Legislation and Employers. The Kaiser Family Foundation estimates that 156 million people in the United States have health insurance coverage through an employer, while Medicare covers 43 million and Medicaid covers 62 million. If Sen. Sander's Medicare for All is passed into law, Medicare would completely replace employer-sponsored health coverage.

The good news for employers is that you no longer would have to choose health care coverage for your employees or help pay for it. On the down side, employers would not be able to use health benefits to entice talent and probably would face higher income or payroll taxes to finance Medicare for All. Employees might not be able to get the same type of coverage or provider choices they had with employer-sponsored coverage.

Will Single Payer Happen? Most people believe that any type of single payer legislation – in particular the Sanders bill – has no chance of being enacted before 2021 with President Trump in the White House and Republicans in control of the Senate.

Another reason the single payer option has little chance of enactment is cost. The Urban Institute, a Washington D.C. think tank, estimates that the Medicare for All proposal will cost more than $32 trillion over 10 years, which would almost double annual U.S. government spending.

The health care sector also is expected to fight against the concept because switching to a single payer system would cause an upheaval in the industry.

The public also is wary of giving up access to private insurance. A recent Kaiser Family Foundation poll found that 56 percent of those who were polled favored the Medicare for All Act, but then when they learned it would do away with private health insurance, support fell to 37 percent. Many fear that any single payer option would mean fewer doctors, treatment and coverage choices. The Veterans Administration system and Medicare and Medicaid, which are all variations of the single payer idea, have numerous problems, including long wait times for surgery, low provider reimbursements, narrow provider networks and rising costs.

The general notion of healthcare for all is popular – particularly among millennials who view it as a right and believe government should pay for it – until they learn the cost and the negative impact it can have on the quality of patient care.

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In this issue:

This Just In ... The Human (or Robo) Advantage in Financial Planning

What a Single Payer Health Care System Could Mean to You and Your Employees

Ways to Make Childcare Costs a Little More Affordable

Sorting Out the Alphabet Soup of Low-Cost Health Benefit Plans

New Tax Deduction for Small Business Owners



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