Single Payer is Dead, Long Live Single Payer

Contributor : Kristine Mackin, Business Insights Analyst

Publish date: 13 Dec, 2016

Following the Nov. 8, 2016, election, DRG published a piece arguing that Colorado’s overwhelming rejection of a single-payer ballot initiative spells the end of some activists’ hopes for an individual state to establish a single-payer healthcare system. I respectfully disagree with this analysis, and in this piece I hope to make the case that Massachusetts will be the next battleground in the movement for a single-payer system.

There are two important hindrances that have prevented single-payer healthcare from taking root in any state in the union to date; one is a lack of funding, and the other is a lack of political will. Cost was a major concern in what had, before Colorado’s referendum, been considered the single biggest failure of the single-payer experiment to date; “cost ultimately killed Vermont’s efforts to build a state-run single-payer.” This program had been projected to cost $4.3 billion in 2017, with the state bearing $2.6 billion of the total and federal funds supplementing these to make up the difference. Enrollment was projected to be 513,000 in the first year, working out to a cost of about $8,400 per person. However, the large total cost compared to the relatively small state budget was widely accepted to spell the ultimate death of this plan (the state budget’s 2017 projected revenue comes in at $1.97 billion, leaving what would have been a gap of at least $600 million in state-provided funds in the first year). The VT example effectively illustrates the cost hurdles to be overcome for anyone promoting single-payer healthcare.

In contrast, political will seems to be the main factor that ended the single-payer initiative in Colorado, with an 80/20 margin of defeat for the referendum. Costs for the ColoradoCare program were projected by some sources to be $38 billion and cover 4.4 million people, working out to a price tag of about $8,700 per person. This plan would have been financed with a 10% payroll tax. Notably, the New York Times reported recently that healthcare costs per person came close to $10,000 per person nationwide in 2015; other sources corroborate these data, indicating that if implemented at this rate ColoradoCare could have represented significant cost savings and highlighting that costs for this iteration of single-payer healthcare were likely not the main factor leading to its defeat. Rather, political factors likely helped kill this initiative; it would have added an amendment to the state constitution rather than going through a typical legislative process, always a big hurdle to clear. Additionally, the complexities of the amendment were such that opponents had only to find minor deficiencies to attack, while proponents had to defend the entirety of this unwieldy bill. Given the decisive defeat, it seems that political will was the primary reason for the failure of the ColoradoCare single-payer plan.

Neither the failure of ColoradoCare nor that of Green Mountain Care has rebuffed proponents of single-payer in MA, creatively named MassCare. Additionally, there are several factors at play that I believe make MA the state to watch for a new debate on single-payer in the coming years.

First, the economic climate in MA is substantially different than VT, with a state budget of $38.4 billion for FY 2016, and a state GDP fifteen times that of its neighbor ($476,743 million in MA versus $30,401 million in VT). Additionally, with its nearly 10x greater population, MassCare would likely have significantly more negotiating power than any single-payer plan implemented in the much smaller VT, making the economic argument more persuasive in this state. Critically, the proposal for Green Mountain Care neglected to specify the rate of any new taxes that would be imposed to pay for their proposal, or to perform a compelling economic analysis of such taxes. The substantially larger tax base in MA would allow any novel tax scheme to yield a higher revenue, better able to support the costs of a single-payer scheme, and supports the view that MA may be more able to overcome economic obstacles to single-payer healthcare.

Second, the political climate in MA is substantially different than CO; using the most recent presidential election as a benchmark, CO totaled 48.2% of the vote for Clinton, while MA surpassed this margin with 60.8% of all ballots cast for Clinton. Additionally, Colorado’s state legislature has split control, with 17 Democrats and 18 Republicans in the upper chamber, and 34 Democrats and 31 Republicans in the lower. The make-up of Massachusetts’ current legislature is significantly slanted in favor of Democrats, with 34 D to 6 R in the upper chamber, and 125 D to 30 R in the lower. With this significant difference in legislative make-up, Democrats would have a much easier time passing a single-payer plan than in most other states; similar factors were at play when the legislature promptly overrode 8 line-item vetoes implemented when then-Governor Romney signed the bill that later became the model for the ACA. If one of the main obstacles to single-payer is the political will, Massachusetts may be the state best-positioned to pioneer this effort.

One additional factor that makes MA the state to watch in the battle for single-payer is the legislative strategy being pursued. In VT, the legislature originally passed a bill that triggered the creation of a single-payer system, but without specifying the funding sources, and giving ultimate responsibility for implementing it to the governor. In CO, the ballot initiative relied on a 10% payroll tax in perpetuity, and would have completely bypassed the normal legislative process. In MA, activists are promoting three different bills, rather than relying on one big push to achieve their goals. The most modest would establish a “single-payer benchmark,” and if costs continued to grow faster than this benchmark, it would require submission of a single payer plan for public and legislative debate. Alternatively, another bill would establish a public option plan to be offered on state-run health care exchanges. The most ambitious would go to the heart of the matter and establish a Medicare-for-all system for the state of MA. By dividing their efforts, proponents of single-payer in MA have given themselves considerable flexibility to pursue the bill that seems most likely to pass. In addition, by going through the legislature, they give themselves a buffer from pure public opinion and the chance to build a strong case over time.

In the past, Massachusetts has been a leader in implementing progressive healthcare reforms, notably being the incubator for the much-reviled individual mandate eventually extended nationally with the passage of the Affordable Care Act. Regardless of how the Trump administration chooses to go about fulfilling their campaign promise to repeal and replace ObamaCare, it is likely that with a Republican-controlled congress there will be a significant shake-up of health care legislation. This will provide legislators with the opportunity to re-evaluate the healthcare systems in the state, and for newly energized progressive activists to organize significant effort on this issue. Regardless of the healthcare policy pursued at the federal level after January 20, 2017, Massachusetts will be an important state to watch in the coming years.

Report: Physician Digital Content Strategy

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