What is Single Payer/ Medicare for All?
The Single Payer (also known as Medicare for All) bill would remove the role of private health insurance corporations in the organization and financing of health care and bring healthcare dollars under public control through a single-payer healthcare system. In Massachusetts, this would result in great cost savings to working people and provide equitable access to health care for everyone.
What would be covered?
All state residents would be covered for all medically necessary services. The list of benefits covers – but is not limited to – doctor visits, hospital care, preventive care, mental health services, rehabilitation, vision, dental and hearing including hearing aids, substance use disorder treatment, medical devices, long Covid, prescription drugs, and reproductive health including abortion. Significantly, long-term care - which is costly and largely paid out of pocket by patients today - would be covered.
Why is Medicare for All Needed In Massachusetts?
Despite having near-universal coverage, 41% of Mass families struggle to pay for healthcare costs (CHIA, 2022). Meanwhile, health care is rapidly eating an unsustainable percentage of our state and city budgets; 36% of our state budget goes to pay for health care. Attempts to control costs within the private insurance system have largely failed; Massachusetts Health Connector patients face a 7.6% premium increase this year, on top of increases totaling at least 31% since 2015.
How would Massachusetts Medicare for All be paid for?
The Massachusetts Medicare for All Act would replace regressive premiums, deductibles, and all out-of-pocket payments with equitable, progressive taxation - as all Single Payer systems do. For the bottom 90%, this tax would be less than what they now pay for healthcare.
Current employer and employee premium payments to private insurers would be replaced with a payroll tax. The bill proposes:
- A 10% tax on payroll - 7.5% for employers and 2.5% for employees.
- For all employers, the self-employed, and small business owners, the first $20,000 of salaries and wages would not be taxed.
- Unearned income (dividends, interest, capital gains) would also be taxed at 10%, excluding the first $20,000.
There would be no tax on Social Security, pensions, unemployment benefits, etc. Current state and federal funding for health care would also be directed to the Trust.
Isn't a payroll tax unfair to small businesses?
The payroll tax means a cost increase for businesses that are not currently insuring their workers. However, it is much less than what they would pay at present for adequate coverage for themselves and their workers. For most small (and large) businesses already providing coverage, the payroll tax will mean substantial savings.
How does the bill incorporate federally funded programs like Medicare?
The proposed legislation instructs the administrators of the plan to negotiate with the federal government to allow existing federal payments for health services, including Medicare and MassHealth, to be paid directly to the state’s Health Care Trust. With these agreements, all claims would be paid on an equal basis, with no out-of-pocket costs or the need to buy supplemental insurance to cover coverage gaps or medication. Networks and tiering would no longer constrain the choice of providers.
Will Medicare for All save money?
Yes. A study by UMass Amherst economist Gerald Friedman estimates this bill would lower health care spending in the state by almost 11% or about $36 billion (2021), even after accounting for the cost of expanding coverage to everyone. One major source of savings is raising the medical loss ratio to the level of traditional Medicare (98%) which saves the state $10 billion dollars. Currently, even non-profit insurers spend our premium money on making themselves more money, lobbying legislators, marketing, denying care, or simply padding offshore bank accounts - whereas traditional Medicare spends nearly every penny on actual care. Lowering hospital prices to Medicare +10% would save an additional $11 billion. Savings also come from the negotiating power of a single payer to lower prices of prescription drugs and medical devices.
Won't this result in rationing?
The U.S. already rations care. Rationing in U.S. health care is based on income: if you can afford care, you get it; if you can’t, you don’t. Despite advances in coverage through the Affordable Care Act and Medicaid, thousands of Americans still die every year because they can't afford to go to the doctor, or to pay for the treatments their doctor prescribes. Many skip treatments that their insurance company refuses to cover. That’s rationing.
Is Single Payer/Medicare for All socialized medicine?
No. Delivery of care would remain private. Patients would have free choice of doctors and hospitals, and doctors would regain autonomy over patient care.
It is a myth that the government will make the medical decisions. In a publicly financed, Single Payer/Medicare for All system, medical decisions are left to the patient and doctor, as they should be.
Who will run Single Payer/Medicare for All in Massachusetts?
The Massachusetts Health Care Trust would be formed and governed by a Board of Trustees with 29 members, including but not limited to the Secretary of Health and Human Services, the Secretary of Administration and Finance, the Commissioner of Public Health, with public accountability through elected members and appointees representing various constituencies, including two Single Payer advocates. The bill indicates a nomination process for 21 Trustees and who would appoint them, and a public election for eight Trustees. The Board would make policy and regulatory decisions regarding the system and would appoint an executive director to administer the trust.
With Medicare for All the public has a say in how its health care system is run. Representatives of patients and medical experts would decide on what treatments, medications, and services should be covered, based on community needs and medical science, and allocate capital for major new investments based on assessments of where need is greatest..
How would providers be paid under Medicare for All in Massachusetts?
All funding would be placed into a Health Care Trust that would be the Single Payer of all health care claims. Prompt payments would be sent to providers and facilities for covered services and agreed-upon capital needs. The bill also proposes that institutional providers develop and use global budgeting, which allows policymakers to directly constrain total health care spending by paying providers a lump sum for all services they deliver. Rather than asking physicians and nurses to document and bill for everything from a single band-aid or aspirin to the exact code for a complex procedure - a mind-numbing practice single-payer countries did away with long ago - hospitals and facilities would receive a budget for all care provided, freeing providers to focus on the actual provision of health care services.
What will happen to physician incomes?
On the basis of the Canadian experience under national health insurance, we expect that average physician incomes should change little. However, the income disparity between specialties is likely to shrink.
How will we keep drug prices under control?
Drug prices will be controlled with bulk purchasing power.
What will happen to the insurance companies with Single Payer/Medicare for All?
Insurance companies would not be allowed to offer the same benefits as the Massachusetts Health Care Trust. Allowing such duplication of coverage weakens and eventually destabilizes the health care system.
What would happen to the billing clerks around the state and other insurance workers who would lose jobs when Single Payer is instituted?
Up to 2% of Trust fund monies annually would be allocated for retraining and job placement services for workers displaced as a result of Single Payer legislation. It is anticipated that there will be a need for more primary and allied health care workers as people get the preventive and medical care they need