1. What is “Single Payer?” 

2. Why not just defend the Affordable Care Act?

3. What’s wrong with a “public option” or lowering the age for Medicare to 55?

4. How would Single Payer function in Rhode Island?

5. How would we pay for the program?

6. Will Rhode Island residents pay more for health insurance if this legislation passes?

7. What happens if patients receive medical care outside the state? 

8. What happens to Medicare and Medicaid? 

9. Does this expand pro-choice options? 

10. Is the State capable of running this program? 

11. Can single payer be successfully enacted at the state level? 

12. Is this “socialized medicine?” 

13. Don’t Canadians come to America for health care because they dislike their single payer program?

14. Will this program increase unemployment in Rhode Island?  

15. Will doctors be paid less? 

16. Does ERISA stand in the way of states implementing universal health care plans?

17. Didn't Vermont and other states refuse to implement single payer because it was too expensive? 

1. What is “Single Payer?” Single-payer health insurance is also known as, "improved Medicare for All."  It is a system in which a single public agency handles health financing (instead of multiple health insurance companies) and delivery of care remains largely private.  Under a national single-payer system  (HR 1976 and S 1804), all Americans would be covered for all medically necessary services, including doctor visits, hospital stays, preventive care, long-term care, mental health care, reproductive health care, dental and vision care, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.  Since it is unlikely single payer legislation will pass at the federal level, Rhode Island can and must act at the state level and pass H. 5628  and 

S. 0233 or at least pass legislation establishing a study commission H. 5019  and S. 230

2. Why not just defend the Affordable Care Act? Fully implemented, the ACA would still leave approximately 4% of Rhode Islanders (40,000 people) without insurance and many more under-insured. As a result, an estimated 40 Rhode Islanders would die every year because they lack appropriate medical insurance. The ACA also lacks a mechanism to control medical costs. Between 1991 and 2014, health care spending in RI, per person, rose more than 250%. The Congressional Budget Office predicts that even with the ACA and its restrictions on what insurance companies can charge, by 2025, the average employer-based family insurance plan will cost $24,500, roughly half the average family’s income. Moreover, the ACA cannot prevent private insurers from limiting both providers and coverage.

3. What’s wrong with a “public option” or lowering the age for Medicare to 55? For more detailed myths and facts about the public option, click here. Basically, the public option leaves the country’s health care system with multiple payers and loses single payer efficiency and cost savings. Also, the public option retains the risk of private insurance companies keeping the healthiest patients ("cherry picking") and forcing Medicare to take elderly and sick patients ("lemon dropping").  In 1972, for example, private insurance successfully got renal dialysis patients to be covered by Medicare regardless of the age of the patient. This shifted a huge number of chronically ill patients from private insurance to Medicare.   As for lowering the age of Medicare coverage, this will also continue to leave private insurance companies in place to "cherry pick" and "lemon drop" patients.  Along with continuous cuts to Medicare funding, the false perception is created that the government cannot run a successful health insurance program.

4. How would Single Payer function in Rhode Island? This legislation would create a state agency to administer the Rhode Island Comprehensive Health Insurance Program (RICHIP). Every qualified Rhode Island resident will have his or her choice of hospital, doctor and pharmacy; there would be no “networks.” Co-pays and deductibles would be eliminated. All medically necessary services would be covered, including hospital care, prescriptions, dental and vision care, and mental health services. Long-term nursing home care currently is not covered. It is expected that as savings begin to accrue from the program, this care can be funded as well.  

5. How would we pay for the program?  The program will be paid for by consolidating government and private payments to multiple insurance carriers into a more economical and efficient improved Medicare-for-all style single payer program and substituting lower progressive taxes for higher health payments now made to private insurance companies. While critics focus on “higher taxes,” they ignore the fact that Rhode Islanders already pay much more to private corporations in the form of health insurance premiums, co-pays and deductibles. 

 

     The proposed legislation would end those excessive private costs and substitute lower progressive taxes: 10% payroll and 10% unearned income (capital gains, dividends, interest and rent).  Moreover, the initial tax rates can be adjusted, and tax credits or exemptions used, to ensure small businesses, working families, and lower income earners are protected.

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     For a detailed economic analysis by Professor Gerald Friedman of UMass Amherst, click here.  See also, his 2021 testimony here.  Please note that Rhode Islanders already pay enough money to have comprehensive and universal health insurance under a single-payer system, but do not have it because of the existing system involving multiple private health insurance companies. By implementing single payer, Rhode Island could contain health care costs because statewide negotiation will reduce costs associated with medical care and medications. It is estimated Rhode Island could save about 23% of current expenditures in the first year and realize larger savings in subsequent years. 

6. Will Rhode Island residents pay more for health insurance if this legislation passes?

In general, the majority of Rhode Islanders--all those making less than $150,000 a year--will see a decrease in their annual medical expenditures. Wealthier Rhode Islanders will see a relatively small increase in their expenditures. On average, Rhode Island residents will save about $4,000/year on their medical expenses within ten years of passage.  

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7. What happens if patients receive medical care outside the state? If it is an emergency, RICHIP will cover medical expenses.  If it is not an emergency, patients will need to get a referral from their Rhode Island provider and payment will be made if it can be determined that the services are not available in Rhode Island.

8. What happens to Medicare and Medicaid? The state will attempt to improve how these federal programs work for Rhode Islanders, but this will require approval  from the federal government.  Medicare and Medicaid are mainly funded with federal dollars that come with restrictions on how they can be spent. Changes in these programs will require waivers from the federal government. The availability and nature of these waivers will have to be negotiated.  Beneficiaries of these programs would be no worse off under RICHIP and potentially could be better off.

9. Does this expand pro-choice options? The effect of this legislation is to provide insurance that covers all “medically necessary care” to state residents. It explicitly overrides other state laws that restricts RICHIP spending on reproductive health care.

10. Is the State capable of running this program? Yes. Rhode Island would contract with third-party administrators to provide back-office functions for the health insurance plan because this is a widely-used, efficient way to provide insurance services to patients.

 

     Medicare and most state MedicAid programs already contract their back office functions – provider network management, member services and claims payment, etc. - to private companies specializing in the efficient delivery of these services.  Some of these companies specialize in providing these services to federal and state governments and some are large health insurance companies that already have and use these capabilities for their own business. Their business model is to provide high quality services at a low cost and the successful companies do this well for many government customers. Rhode Island would take advantage of this existing, proven capability in the US, and use one of these private vendors.  Contracting management to ensure high quality, efficient performance for Rhode Island would be an important part of this relationship.

Note:  Large companies often self-insure and use third-party-administrators to keep their own costs low by eliminating the profits of the middleman private insurance company.  

11. Can single payer be successfully enacted at the state level? Yes. All current private plans are licensed at the state level and operate only within that state. Plans ‘rent’ networks of providers from plans in other states, and use these rental arrangements to deliver out-of-state coverage. If RI Blue Cross/Shield can operate at the state level then so could RICHIP.  In addition, the Canadian single payer system began when the province of Saskatchewan (with a population of 1 million, roughly the same as RI) ran a province-wide, single-payer universal insurance program. Less than 8 years later, the Canadian federal government recognized how much money they were saving and nationalized the program.

12. Is this “socialized medicine?” No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. RICHIP would use private doctors and hospitals like Medicaid and Medicare do.

 

RICHIP would pay for care provided in the private (mostly not-for-profit) sector. This is similar to our Medicare program: doctors are in private practice and are paid on a fee-for-service basis from government funds; the government does not own or manage medical practices or hospitals.  

 

Great Britain and Spain have socialized medicine programs but most European countries, as well as Canada, Australia and Japan, have socialized health insurance rather than socialized medicine.  

13. Don’t Canadians come to America for health care because they dislike their single payer program? This myth runs counter to all available data, but is continually put forth by those who benefit from protecting the current multi-payer system. A study in 2012 showed that the top 600 US hospitals cared for a total of 800 Canadians that year; of that number, 80% received care because they fell ill or were injured while travelling in the United States. Health care in Canada costs about one-half per capita as in America, and overall, Canadians get better care with better outcomes. Canada has had its single payer system since 1972 without major changes.

14. Will this program increase unemployment in Rhode Island?  

No. Savings under the single payer program could lead to an expansion in sales and production that would increase employment in RI by nearly 3%, or over 14,000 additional jobs. Health insurance administrative work will shrink, making employees available for more productive employment including patient care and movement to other industries.  RICHIP funds could be used for retraining and placement of some workers.

 

15. Will doctors be paid less? While the RICHIP Director, who will be the chief officer of RICHIP, will consult with the RICHIP Advisory Committee to determine rates of compensation for providers, it is unlikely there would be a significant change in compensation for several reasons. First, the savings realized by switching to a single-payer system should be enough to cover professional fees as they now stand. Second, it would not be in the State’s interest to compensate health care professionals less than surrounding states do. To do so would encourage an exodus of providers of care from RI to neighboring states. When Saskatchewan, and later, all of Canada enacted single-payer, there was no significant change to physician compensation except to some of the most highly compensated specialists.

16. Does ERISA stand in the way of states implementing universal health care plans? No. ERISA (the Employees Retirement Income Security Act) prevents a state from requiring that a self-insured employer provide certain benefits to its employees. However, a single-payer plan would not mandate the composition of employer benefit plans - it would replace them with a new system that would essentially be Medicare for all. The state would require employers to pay a payroll tax into the health care trust fund, which is legal. There are also strong legal arguments why provisions to capture employer health spending should survive ERISA preemption. States have wide latitude to levy taxes and regulate health care in general, and providers in particular. The bill's provisions do not require employers to alter their employee benefit plans, they merely encourage a shift to the state’s health plan. In addition, ERISA states that it “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” Conservative interpretation says the term “supersede” precludes reading the statute as categorically preempting any state law related to employee benefit plans. If Congress meant for ERISA to preempt state laws without replacing them, it would not have used the word "supersede." Only if ERISA governs the same subject matter as the disputed state law should the court ask whether the state law “relates to” employee benefit plans. 

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17. Didn't Vermont refuse to implement single payer because it was too expensive? No. The Vermont plan, known as Green Mountain Care, was not a single-payer plan. The ultimate design for GMC retained multiple payers, and would have continued to pay hospitals and other institutional providers on a per-patient basis, perpetuating the expensive billing apparatus that siphons funds from care. Hospitals would have continued to rely on surpluses from day-to-day operations as their main source of capital funds, forcing hospital administrators to identify and pursue profit opportunities. Single payer pays hospitals via lump-sum budgets with separate grants for capital costs. Even so, it was political will, not cost, that defeated the Vermont health reform. The health exchange the state set up under the ACA didn’t work (as happened in several other states as well), draining political capital, and the governor barely squeaked through his re-election. A contributing factor was that the financing plan developed by the governor’s own team was not very progressive or diversified. Finally, making formerly hidden health care costs transparent by replacing them with taxes, even if the taxes are lower, is a heavy political lift.  In sum, what stopped single payer in Vermont were political and institutional obstacles, not economic ones.  See this article for details.

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