The case for a single payer health plan
COMMENTARY | May 25, 2009
Medicare advocate Judith Stein says only a public health plan would reduce costs, guarantee choice of doctors and assure quality care for everyone—the requirements for a national health care plan as spelled out by President Obama.
By Judith Stein
President Obama recently announced three "bedrock requirements" for real health care reform, and issued a call to action for support of these requirements. The bedrock requirements for the president are:
1. Reduce Costs - Rising health care and coverage costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under control
2. Guarantee Choice - Americans must have the freedom to keep whatever doctor and health care plan they have, or to select a new doctor or health care plan if they choose
3. Ensure Quality Care for All - All Americans must have quality and affordable health care
My group, the Center for Medicare Advocacy, has also released a call for health care reform – and for support of a public plan option. Health care advocacy groups like ours support a public plan—also called single payer—because it is what really fulfills the president's three key requirements for reform.
Single payer has gone from getting virtually no press coverage to getting a little coverage in recent weeks, largely because of protests on its behalf in Washington. So I’m trying here to present, succinctly, the case for a public plan in the hope that reporters and editors will take a look. In addition, my group has started a blog that may be useful for journalists. (Click here, for example, for a recent entry that lays out 12 reasons for going single-payer.)
A Public Plan Reduces Costs
A public plan offers significant savings in administrative costs, savings that private plans have been unable to match. Currently the administrative cost of Medicare at approximately 2 percent, and the administrative cost for private insurance is approximately 19 percent. Estimates are that more than $350 billion could be saved with simplified single-payer administration.
In addition, because of its broad reach, a public plan would be able to negotiate lower volume discounts from providers and drug manufacturers, making a public plan less costly to individuals.
Some argue that lower drug payments in a public plan would require higher payments from other insurance plans. But the evidence demonstrates that higher payments – those often negotiated by private plans - are not caused by lower payments for medicines in public plans but rather by less efficient administration. (Click here for a PDF report to Congress on this issue by an independent Congressional agency, MedPAC, the Medicare Payment Advisory Commission.)
Finally, a public plan does not earn profits and has no imperative to do so, as private plans do. This allows a public plan to offer lower premiums. Estimates are that premiums in a public plan would be 20-30 percent lower than those of private plans. Lower premiums are of course desirable for the individuals who would be required to pay them, and for the governments or employers who, depending upon the design of the reform package might be called upon to pay premiums on behalf of others.
A Public Plan Guarantees Choice
Unlike a fragmented system of private plans with limited geographic reach and provider networks, a public plan, like Medicare, would be available to anyone, anywhere in the country. This lets beneficiaries stay with the health care providers they have chosen, and to choose their providers in the future, rather than being forced into a limited network of participating providers. This choice – of doctors and other health care providers – is the choice that really matters to people.
Also, a public plan would not limit participants to obtaining health care coverage, and care, in a particular geographic area, but rather would allow beneficiaries to be cared for by participating doctors, specialists and facilities nationwide. Again, this is like the traditional, public Medicare program that allows people to obtain care from doctors, hospitals, and other care providers throughout the country. As in traditional Medicare, nobody in a public plan would be denied coverage for being "out-of-area" or "out-of-network," as so often happens with private plans.
In my view, a public plan option is a key to real health care reform. It would let people choose a stable, well-defined benefit. Proponents of choice should support offering a public plan, too; not just private plans. To do otherwise is to limit people's options.
A Public Plan Ensures Quality Care for All
A public plan for health care would be nationally available to all. It would have a defined set of benefits. There would be no surprises regarding what is or isn't covered – or where. Those who participate in the country's current public plan, Medicare, know this and, as a result, are very satisfied with the quality of their coverage. According to Jacob Hacker, a professor of political science at Berkley and a fellow at the New America Foundation, an AARP survey shows that 80 percent of people with Medicare are either "extremely" or "very satisfied" with their health care coverage and with access to their physicians. This is a higher rate than that for 50- to 64-year-olds with private insurance. There is no reason to believe that a public plan, as part of national health care reform, would not fare equally as well as Medicare does with customer satisfaction.
Dr. Thomas E. Davis, Colonel, USA (ret)
08/22/2009, 02:49 PM
I have long advocated a single-payer health care system. furthermore, I have propsed that both Medicare and The Federal Employees Health System could and should be tailored to fit all citizens. The Administration of both is in place thus easing the transition of accepting new patients.I have been in Medicare for over 20 years with a supplemental provided through my military retirement. A couple of caveats are necessary: (1) Illegal Aliens Must NOT be covered; (2) Abortion must NOT be a covered item after the embryo transitions to fetal stage; (3) Long-term Care [LTC] should be offered as a supplement at an appropriate actuarial rate; (4) Only the FIRST child born out of wedlock can be covered; (5) Foreigners traveling in the US on a valid passport/visa must be prepared to pay for any and all medical services; (6) All persons upon entering the program MUST be required to execute a 'Living Will', a copy of which, is to be maintained in their medical records; and finally (7) Provisions must be included in the plan to keep abuses to an absolute minimum, e.g. multiple visits/week to the ER, etc.
Monroe Twp, NJ