frequently asked questions
13. Don’t Canadians come to America for health care because they dislike their single payer program?
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 676 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 S.2237 and H. 7285.
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.
For a detailed economic analysis by Professor Gerald Friedman of UMass Amherst, click 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 by 2026.
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.