Single-Payer Health Insurance Update

1. Single-Payer Health Insurance Update James Mitchiner, MD, MPH Ann Arbor Democrats March 12, 2011

2. Health Care Reform, 2011

3. Dave Barry on Health Care Reform: “We have decided two things beyond doubt: 1. We have the best health care system in the world 2. We have to do something about it”

4. American Health Care, 2011 2.6 trillion dollars ($8,200 per capita) BUT…… • Access: 50.7 million uninsured; 25 million underinsured • Quality: recommended care only 55% of the time; up to 98,000 deaths due to errors • Outcomes:decreased life spans; higher infant mortality; 44,800 deaths due to being uninsured

5. The “Inconvenient Truth” of American Health Care: MUCH OF WHAT WE SPEND ON HEALTH CARE DOES NOT GO TO IMPROVING HEALTH AND PREVENTING DISEASE

6. Source: Kaiser Family Foundations projections based on data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

7. Health Insurance Premiums Have Risen Dramatically over 10 Years Average Cost for Family Coverage $13,375 Overall: 131% Increase Employers: 132% Increase $5,791 Workers: 128% Increase Source: Kaiser/HRET 2009 Survey of Employer-Sponsored Health Benefits, September, 2009.

8. Average Family Premium as Percentage of Median Family Income, 1999–2020 * Source: Commonwealth Fund calculations based on Kaiser/HRET, 1999–2008; 2008 MEPS-IC; U.S. Census Bureau, Current Population Survey; Congressional Budget Office.

9. % of Families Spending ≥10% of Annual Income on OOP Medical Costs, 2001-2007 Source: Commonwealth Fund Biennial Health Insurance Surveys (2001 and 2007)

10. Medical Bankruptcy • 62% of all personal bankruptcies • 50% increase, 2001-2007 • Most are middle-class • 5,000 families each business day • 78% had health insurance

11. What is the Marginal Value of Private Health Insurance?

15. Administrative Overhead Geyman, John. Myths as Barriers to Health Care Reform in the United States, International Journal of Health Services, 2007; 33(2):315-329

18. Definitions Universal Health Care = everyone covered “Socialized medicine” • Universal health care, publicly financed • Government physician, government hospital Single-Payer Health Insurance • Universal health care, publicly financed • Private physician, private hospital

19. Single-payer would… Cover everyone Reduce administrative inefficiencies Sever the link between employment and health insurance Allow consumer choice Reduce health care disparities

20. Single-payer would… Cover all reasonable beneficial services Preserve patient-physician relationship Reduce (?eliminate) co-pays, deductibles Promote global competitiveness of American business Reduce fraud and abuse

21. Single-payer would meet all 3 goals of health care reform: • Expand access through universal coverage • Control costs by consolidating administration • Preserve choice of physician and hospital

22. Single-Payer in Vermont • Universal coverage for all legal VT residents • Essential Benefits package • No deductibles • Cost-sharing for inpatient admissions • Low income individuals (<200% FPL) exempted • Limited benefits for dental, vision; no LTC • Medicare & Medicaid maintained • Financed by tax on individuals (3.1%) & employers (9.4%) [2016] • Low income individuals exempted

23. Single-Payer in Vermont • Governance: VT Health Reform Board • Providers, patients, employers, state officials • Determine annual updates to benefits package & payment rates • Insulated from political process • Administration: • Publicly financed but privately administered by single insurance firm, chosen through competitive bidding • Use of private firm for paying claims & provider relations only • Cost savings = $580 million over 10 years • Will require federal waivers • Anticipated start date: 2015

24. Single-Payer in Vermont • Population 621,000 – rural, homogenous • 7% uninsured (vs. 16.6% for USA) • Only 3 commercial insurers • Strong grass-roots support for single-payer • Democratic governor • Democratic legislature • US Senators – 1 Democrat, 1 independent • Democratic congressman

25. HR 676: “Expanded & Improved Medicare For All Act” • Sponsored by Rep. John Conyers, Jr. (D-14th), with 25 co-sponsors to date • 30 pages (vs. ~2,000 pages for ACA) • Universal coverage for all US citizens • Portability • NO cost-sharing • Automatic enrollment: 2-page application

26. HR 676: “Expanded & Improved Medicare For All Act” • Full choice of physician and hospital • Covers all medically necessary services: • inpatient, outpatient, emergency, prescription drugs, mental health, dental, vision, hearing, nutritional, podiatry, substance abuse, chiropractic, DME, LTC, palliative • Prohibits duplicate coverage by private insurer • Supplemental insurance coverage allowed (e.g., for cosmetic surgery)

27. HR 676: “Expanded & Improved Medicare For All Act” • Budgeting Process – 3 types: • Operating Budget • Capital Expenditures Budget • Health Professional Education Budget • Global budget – regional allocation of funds and regional negotiations • Reimbursement: • Fee-for-service, salaries or capitation • Single, uniform electronic billing system • Interest paid if not reimbursed within 30 days • Balance billing not allowed

28. HR 676: “Expanded & Improved Medicare For All Act” • Funding • Existing federal revenues for health care • Tax on high incomes (top 5%) • Progressive tax on payroll & self-employment income • Modest tax on unearned income and stock & bond transactions • Savings over existing system: • Reduced paperwork • Bulk purchases of medications • Improved access to preventive care

29. The 6 Myths of Single-Payer Health Insurance

30. Myth #1: “Single-payer is government-controlled medicine” Not “socialized medicine” Government-financed, not government controlled Medicare = single-payer health insurance universal, portable, non-job-linked, automatic enrollment Available in all states Administrative costs ~3% Analogy: Interstate Highway System

31. Myth #2: “Canadian medicine would be bad for America” Canada spends half of what we do Canadians live longer Canada has lower infant mortality Canadians less likely to have unmet medical needs Outcomes generally comparable - or better

32. Myth #2: “Canadian medicine would be bad for America” NO evidence that Canadians are routinely coming to USA for health care NO evidence of massive emigration of Canadian physicians Polls show 80% of Canadians are satisfied or very satisfied with their health system

33. Myth #2: “Canadian medicine would be bad for America” Over 80% of Canadians get elective surgeries within 3 months No evidence of wait-listing for emergencies We have waits in the USA! Canada rations health care by medical need; USA rations care by income and insurance status

34. Myth #3: “Market-based medicine trumps single-payer” Courtesy: Nick Anderson & Leonard Fleck, PhD (MSU)

35. Myth #4: “Single-payer would stop medical innovation” No correlation between innovation and health care financing Many technologies came from countries with national health insurance Largest single source of funding for medical research in USA = NIH $30.8 billion funding, FY 2009

36. Myth #5: “Single-payer is impossible to enact politically” Conventional politics is what sustains the mess we have now What’s desirable vs. what’s doable That’s what they said about Medicare in 1965

37. Myth #5: “Single-payer is impossible to enact politically” 66% support, CBS-NY Times poll, July 28, 2009 64%support single-payer, even if higher taxes (CNN, May 2007) 63% support, even if taxes increased (CHCW, May 2007)

38. Physician Support: 59% Note: Support among Emergency Physicians: 69% Carroll AE, Ackerman RT. Ann Int Med 2008;148:566

39. Myth #5: “Single-payer is impossible to enact politically” Support for Single-Payer: Physicians for a National Health Program (17,000) American College of Physicians (129,000) American Medical Students Association (62,000) American Medical Women’s Association (3,000) American Public Health Association (50,000) California Nurses Association (86,000) >500 labor unions 89 Members of last Congress 3 Nobel Prize winners

40. Myth #6: “We cannot afford single-payer” Taxes would go up, yes, BUT: Health insurance premiums would disappear Savings from economies of scale Decreased out-of-pocket payments Elimination of cost-shifting Estimates of savings under single-payer: $200 billion (GAO) $300-400 billion (other sources)

41. How do we know single-payer will work? • People who were uninsured between ages 55-64 experienced rapid improvement in health after reaching Medicare eligibility • After Oregon cut Medicaid rolls in 2003, there was a 36% increase in ED use • After introduction of national health insurance in Taiwan: • life expectancy increased • health disparity narrowed

42. How do we know single-payer will work? Every other industrialized nation has a healthcare system that assures medical care for all All spend less than we do; most spend less than half Most have lower death rates, more accountability, and higher satisfaction

43. Optimism !!! “You can always trust the Americans to do the right thing, once they’ve tried all the alternatives.” -- Winston Churchill

44. How you can help • Stay informed • Websites: • Physicians for a National Health Pgm: www.pnhp.org • Healthcare Now: www.healthcare-now.org • Ask your Congressman to support HR 676 • “Expanded & Improved Medicare For All Act”