Single Payer – How Does It Really Look?

If there are two words that strike fear into the hearts of those who sell health insurance, it’s the words: single payer.

A single-payer health care system is a way of life in a number of countries around the world. But not all of these systems are the same, and it’s unlikely any of them could be adapted for use in the U.S., said an industry association leader who has studied single-payer systems in other nations.

At Monday’s National Association of Health Underwriters Capitol Conference, members heard from Janet Trautwein, NAHU CEO, on the many faces of single payer. Trautwein has studied single-payer systems through the London School of Economics.

Speaking to a standing-room-only group, Trautwein compared and contrasted the health care systems used in several nations, particularly Canada and the European nations. She pointed out that the system of employer-based health coverage that has tax-preferred status and where employers are heavily involved in insurance is a system that is unique to the U.S.

In addition, she said, even though the idea of a single-payer system in the U.S. has been floated by various lawmakers over the years, one thing that could prevent the establishment of single payer in this country is rooted in our national culture.

“Our national culture is about free market emphasis and the ability of individuals to excel on their own,” she said. “Whereas in Europe, the culture is one of solidarity – everyone being in it together – and that’s rooted in the post-World War II environment.”

Other health care ideas that work in Europe may not work in the U.S., Trautwein said. Our nation’s history of not having government involvement in provider pricing for private plans is one reason for that, she said. In addition, the size of the U.S. population, its diversity and the division between rural and urban populations also work against establishing a European single-payer model.

Trautwein presented this comparison of how single-payer systems work in a sampling of countries she has studied.

Netherlands

Of all the nations she studied, Trautwein said the system used in the Netherlands is the one that would mostly likely fit the U.S., although she said that cultural differences between the populations of the two countries make it unlikely that such a system would end up being implemented here.

The Netherlands has universally mandated private insurance through a national exchange, and the private plans provide mandated benefits. The government regulates and subsidizes insurance. The system is financed through a payroll tax and community-rated insurance premiums as well as general tax revenue.

Although insurers negotiate pricing with providers, there is some government involvement in the system, especially in terms of hospital pricing.

Canada

Proponents of a single-payer system for the U.S. often cite Canada’s system as a model. Trautwein broke down the main points of the Canadian system.

Canada has a regionally administered public insurance program paid through federal and provincial taxes. Despite this public program, she said, about two-thirds of Canadians buy voluntary coverage for services not covered by public insurance.

Coverage levels are determined by each province, and there is no cost-sharing for covered services.

Provincial governments negotiate with medical providers and pay them. Most outpatient specialist care is provided in hospitals.

One consequence of the Canadian health care system, Trautwein said, is that the wait time for elective procedures is high.

England

The single-payer system in England is the most heavy-handed in terms of the government deciding what services are available to individuals, Trautwein said.

The British created the National Health Service. The service owns some physician practices, although many private physicians practice in England as well.

Many residents of England have supplemental insurance that allow them to access coverage more quickly or receive treatment in private hospitals.

Efforts To Establish Single Payer in the U.S.

In the U.S., the Republicans control the White House and both houses of Congress, effectively precluding any single-payer system from getting enough traction to pass, Trautwein said.

But she cautioned that interest in single payer is growing. A single-payer bill sponsored by Sen. Bernie Sanders, D-Vt., has 16 cosponsors in the Senate.

In addition, she said, frustration with the current health care system opens the door for a broadening of our current public programs little by little. This could lead to incremental changes in our current government health care programs.  Such changes could include a buy-in to Medicare, a buy-in to Medicaid or a public option.

All of these programs would likely be permitted to use government-negotiated prices in competition with commercial products which were required to operate without this advantage, she said.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.