Frequently asked questions about single-payer

What is single payer?

Single-payer (also known as Medicare for All) is a streamlined health insurance system in which a state organizes and finances health care. In Massachusetts, this would replace our current expensive and complicated system of multiple insurance companies and would result in great cost savings and access to health care for everyone. Under a single-payer/Medicare for All system in Massachusetts, all state residents would be covered for all medically necessary services, including: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs.

Why is Medicare for All in Massachusetts needed?

Massachusetts needs to extend quality health care to all residents that is affordable and controls costs. High costs, primarily due to administrative costs, are steadily consuming state, municipal, business and household budgets. Attempts to control these costs within the present private insurance system have failed. Single payer systems around the world have been proven to reduce inequalities in health care, improve access to care, and reduce costs for families, businesses, municipalities, and states.

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.

Won’t this result in rationing like in Canada?

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. A recent study found that 45,000 Americans die every year because they don’t have health insurance. Many more skip treatments that their insurance company refuses to cover. That’s rationing.

Who will run a single payer/Medicare for All system in Massachusetts?

A health care trust would be formed and governed by a Board of Trustees with 23 members. The Board would make policy and regulatory decisions regarding the single payer 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.

Will Medicare for All save money?

Yes. A study by UMass Amherst economist Gerald Friedman estimates that a single payer system in Massachusetts would save 15.75% of our current spending on health care in the state – about $21 Billion. It does so primarily by eliminating administrative waste in the commercial health insurance market. Savings also come from using the negotiating power of a single payer plan to lower the price of prescription drugs and medical devices, by having a global budget, and by streamlining the system.

People will seek care earlier when chronic diseases such as hypertension and diabetes are more treatable. We know that both the uninsured and many of those with skimpy private coverage delay care because they can’t afford it with the ever-increasing costs of our current system.

Our present bureaucratic system spends 31% of every health care dollar on administrative costs, profits, and CEO salaries, while our national Medicare system spends only 2-3% on overhead costs.

How would providers be paid under the Massachusetts’ Medicare for All bill?

The Health Care Trust fund would become the single payer. Prompt payments would be sent to providers and facilities for covered services and capital needs. Institutions and organizations, like hospitals, clinics, and health centers, physician practices would develop and use global budgeting.

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 single payer/Medicare for All. Allowing such duplication of coverage weakens and eventually destabilizes the health care system.

What will happen to those who work for insurance companies?

Administration will obviously shrink and this will eliminate the need for many insurance workers. They will be offered job retraining, placement programs, and extended unemployment benefits. Some insurance company employees may find positions in the administration of the health care trust.

How would Medicare for All in Massachusetts be financed? Won’t this raise my taxes?

A universal public system would be financed in the following way: The public funds already funneled to Medicare and Medicaid would be retained. The difference, or the gap between current public funding and what we would need for a universal health care system, would be financed by a payroll tax on employers (about 7.5%) and an income tax on individuals (about 2.5%). The payroll tax would replace all other employer expenses for employees’ health care, (which would be eliminated). For all employers, the self-employed, and small business owners, the first $30,000 of salaries and wages would not be taxed.

The income tax would take the place of all current insurance premiums, co-pays, deductibles, and other out-of-pocket payments. For the vast majority of people, this tax would be less than what they now pay for insurance premiums and out-of-pocket payments such as co-pays and deductibles, particularly if a family member has a serious illness. It is also a fair and sustainable contribution. There would be no tax on Social Security, pensions, or unemployment benefits. A 10% tax would be assessed on dividends and interest – excluding the first $30,000.

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.