Here's A National Single-Payer Health Care Plan That Would Work
Shadowproof is proud to contribute to the national health care debate by introducing our plan to transition the United States to a single-payer health care system.
Our plan, the Medical Insurance and Care for All program (MICA), is a public health insurance program based on Medicare but open to all individuals. Employers will be required to buy their employees MICA or equally good private coverage. If one does not receive employer coverage, they will automatically be enrolled in MICA and charged for it in their taxes.
Read our legislative summary to see the entire MICA program.
Any serious move toward a more rational universal health care system will face strong opposition from hospitals, doctors, drug makers, and insurance companies. That’s because they rely on the byzantine nature of the health care system to charge significantly more than providers and insurers in other highly industrialized countries.
There is no way around this financial reality. Consequently, for any plan to be politically viable, it must aim to reduce opposition from outside the health care sector as much as possible while still achieving universal affordable health care.
The Affordable Care Act (ACA) was designed as a large transfer of wealth from the rich and a segment of healthy middle class individuals to the poor, the sick, and importantly, the health care industry. MICA is primarily a transfer of wealth from the health care industry to everyone else.
The guiding political principles behind this plan are intended to make it politically viable by minimizing disruption, making the transition feel voluntary, and ensuring everyone outside the health care sector is noticeably better off (and at least not worse off).
There are two primary approaches to transitioning to single-payer that minimize disruption and the number of losers outside the health care industry.
The first is to slowly lower the Medicare age and/or slowly add specific groups to Medicare. The second is to find a way to transition our current employer coverage system towards single-payer-like health insurance.
This plan does the latter by strongly encouraging the private dollars currently spent on health care to be redirected toward a new, much cheaper, and better quality government program. MICA will be an attractive option for all companies, as the program should cost 20-30% less than what employers are currently spending on insurance.
The existence of a universally better government program will compel the remaining private insurance industry to perform better.
The reasons for this approach over slowly lowering the Medicare age are multifold. First, is the issue of financing. Lowering the Medicare age would need to be combined with a new tax structure while this plan relies on mainly redirecting employer current spending on private health insurance.
This route is also quicker and more difficult to reverse. MICA would be available immediately to all companies and they would steadily start choosing it.
Additionally, one fear with lowering the Medicare age slowly is that opponents could simply freeze it when elected, ending up with our same system—except Medicare now would start at age 59.
Lowering the Medicare age is likely to be disruptive. There might be some point, for example, when the eligibility age reached 45, where larger companies might stop dropping employer coverage en masse, creating a need for an emergency fix.
This plan is heavily based on former Rep. Pete Stark’s Americare Health Insurance Act and Jacob Hacker’s proposal because both attempt to address these same political issues in similar manners.
The following is a supplemental explanation of MICA. Read the legislative summary for a more comprehensive understanding of the plan. You may also read Jon Walker’s series on health care for a greater understanding of why this plan was designed this way.
Part A – Eligibility
Section 1 – Automatic enrollment in MICA is limited to citizens and legal residents. The challenges undocumented people face in obtaining health care may be best addressed through immigration reform. Enrolling undocumented people in the federal system comes with substantial risk, as immigration officials could use their enrollment to locate them and initiate deportation proceedings. An immigration bill is needed to resolve their documentation status so they can obtain health care without fear of reprisals.
If this bill passes, it would make it easy for any immigration bill to deal with the issue. As soon as an individual’s status is legalized they would automatically be put in the system. MICA does, however, provide broad protection from outrageous provider fees—for example, no medical facility offering emergency services can charge anyone more than 200% of the MICA rate, regardless of their insurance status. Relatively affordable options to buy private coverage could benefit some people in this group.
Part B – Benefits and Cost Sharing
Sections 6-7 – In general, the way cost sharing is currently used in the United States is confusing. Most people don’t understand how deductibles, co-pays, balanced billing, and coinsurance all interact. Most existing plans’ cost sharing structures are counterproductive, attempt to avoid paying people what they are owed, and are cruel to individuals who get sick.
There is still a limited role for price signaling in health care to encourage sensible behavior, and it is used in several highly industrialized countries with universal health care systems. In general, you want people to try basic over-the-counter treatments before visiting a doctor, as well as going to their primary care doctors before seeing a specialist. Co-pays are easy to understand and a sufficient way to indicate to people that going to a primary care doctor is better than going straight to the ER, or that they should choose generic medicine over brand name. The goal is a cost-sharing system simple enough it can fit on the back of a business card.
It is possible to create a system without any co-pays or other cost sharing structures, but that would increase costs and wasteful utilization. Even many of the most liberal European countries have some modest forms of cost sharing. The question for advocates should not just be, is the marginal help for individuals that comes from zero cost sharing worth the added overall cost, but is it worth the political cost of a larger price tag for the whole plan. This is a serious point of debate that advocates need to confront.
Section 8 – It would be rare for someone to rack up large medical bills based only on co-pays, but it can happen, which is why there is an out-of-pocket limit. It is broken into four quarters so individuals aren’t suddenly hit with one major expense on top of an unexpected illness.
Section 10 – It should be clear government policy that co-pays are not meant to be a major funding source but simply a way to encourage behavior. They should only be used if they do that. If it turns out a particular co-pay is preventing people from seeking timely treatment resulting in higher long term costs, it should be reconsidered.
Part C – Network and Providers
Section 12 – Some non-profit HMOs with relatively high consumer ratings already exist. While offering them a way to take part in MICA is unlikely to prevent them from opposing the bill, the goal is to reduce possible opposition from the current customers of these organizations. As much as possible, the goal is to move people from what they have to something familiar but much better.
Shadowproof is proud to contribute to the national health care debate by introducing our plan to transition the United States to a single-payer health care system.
Our plan, the Medical Insurance and Care for All program (MICA), is a public health insurance program based on Medicare but open to all individuals. Employers will be required to buy their employees MICA or equally good private coverage. If one does not receive employer coverage, they will automatically be enrolled in MICA and charged for it in their taxes.
Read our legislative summary to see the entire MICA program.
Any serious move toward a more rational universal health care system will face strong opposition from hospitals, doctors, drug makers, and insurance companies. That’s because they rely on the byzantine nature of the health care system to charge significantly more than providers and insurers in other highly industrialized countries.
There is no way around this financial reality. Consequently, for any plan to be politically viable, it must aim to reduce opposition from outside the health care sector as much as possible while still achieving universal affordable health care.
The Affordable Care Act (ACA) was designed as a large transfer of wealth from the rich and a segment of healthy middle class individuals to the poor, the sick, and importantly, the health care industry. MICA is primarily a transfer of wealth from the health care industry to everyone else.
The guiding political principles behind this plan are intended to make it politically viable by minimizing disruption, making the transition feel voluntary, and ensuring everyone outside the health care sector is noticeably better off (and at least not worse off).
There are two primary approaches to transitioning to single-payer that minimize disruption and the number of losers outside the health care industry.
The first is to slowly lower the Medicare age and/or slowly add specific groups to Medicare. The second is to find a way to transition our current employer coverage system towards single-payer-like health insurance.
This plan does the latter by strongly encouraging the private dollars currently spent on health care to be redirected toward a new, much cheaper, and better quality government program. MICA will be an attractive option for all companies, as the program should cost 20-30% less than what employers are currently spending on insurance.
The existence of a universally better government program will compel the remaining private insurance industry to perform better.
The reasons for this approach over slowly lowering the Medicare age are multifold. First, is the issue of financing. Lowering the Medicare age would need to be combined with a new tax structure while this plan relies on mainly redirecting employer current spending on private health insurance.
This route is also quicker and more difficult to reverse. MICA would be available immediately to all companies and they would steadily start choosing it.
Additionally, one fear with lowering the Medicare age slowly is that opponents could simply freeze it when elected, ending up with our same system—except Medicare now would start at age 59.
Lowering the Medicare age is likely to be disruptive. There might be some point, for example, when the eligibility age reached 45, where larger companies might stop dropping employer coverage en masse, creating a need for an emergency fix.
This plan is heavily based on former Rep. Pete Stark’s Americare Health Insurance Act and Jacob Hacker’s proposal because both attempt to address these same political issues in similar manners.
The following is a supplemental explanation of MICA. Read the legislative summary for a more comprehensive understanding of the plan. You may also read Jon Walker’s series on health care for a greater understanding of why this plan was designed this way.
Part A – Eligibility
Section 1 – Automatic enrollment in MICA is limited to citizens and legal residents. The challenges undocumented people face in obtaining health care may be best addressed through immigration reform. Enrolling undocumented people in the federal system comes with substantial risk, as immigration officials could use their enrollment to locate them and initiate deportation proceedings. An immigration bill is needed to resolve their documentation status so they can obtain health care without fear of reprisals.
If this bill passes, it would make it easy for any immigration bill to deal with the issue. As soon as an individual’s status is legalized they would automatically be put in the system. MICA does, however, provide broad protection from outrageous provider fees—for example, no medical facility offering emergency services can charge anyone more than 200% of the MICA rate, regardless of their insurance status. Relatively affordable options to buy private coverage could benefit some people in this group.
Part B – Benefits and Cost Sharing
Sections 6-7 – In general, the way cost sharing is currently used in the United States is confusing. Most people don’t understand how deductibles, co-pays, balanced billing, and coinsurance all interact. Most existing plans’ cost sharing structures are counterproductive, attempt to avoid paying people what they are owed, and are cruel to individuals who get sick.
There is still a limited role for price signaling in health care to encourage sensible behavior, and it is used in several highly industrialized countries with universal health care systems. In general, you want people to try basic over-the-counter treatments before visiting a doctor, as well as going to their primary care doctors before seeing a specialist. Co-pays are easy to understand and a sufficient way to indicate to people that going to a primary care doctor is better than going straight to the ER, or that they should choose generic medicine over brand name. The goal is a cost-sharing system simple enough it can fit on the back of a business card.
It is possible to create a system without any co-pays or other cost sharing structures, but that would increase costs and wasteful utilization. Even many of the most liberal European countries have some modest forms of cost sharing. The question for advocates should not just be, is the marginal help for individuals that comes from zero cost sharing worth the added overall cost, but is it worth the political cost of a larger price tag for the whole plan. This is a serious point of debate that advocates need to confront.
Section 8 – It would be rare for someone to rack up large medical bills based only on co-pays, but it can happen, which is why there is an out-of-pocket limit. It is broken into four quarters so individuals aren’t suddenly hit with one major expense on top of an unexpected illness.
Section 10 – It should be clear government policy that co-pays are not meant to be a major funding source but simply a way to encourage behavior. They should only be used if they do that. If it turns out a particular co-pay is preventing people from seeking timely treatment resulting in higher long term costs, it should be reconsidered.
Part C – Network and Providers
Section 12 – Some non-profit HMOs with relatively high consumer ratings already exist. While offering them a way to take part in MICA is unlikely to prevent them from opposing the bill, the goal is to reduce possible opposition from the current customers of these organizations. As much as possible, the goal is to move people from what they have to something familiar but much better.
