Single Payer Health Coverage - Frequently Asked Questions
Won't this raise my taxes?
Currently, about 64% of our health care system is financed by public money: federal and state taxes, property taxes and subsidies. These funds pay for Medicare, Medicaid, the VA, coverage for public employees (including teachers), elected officials, military personnel, etc. There are also hefty tax subsidies to employers to help pay for their employees' health insurance. About 17% of health care is financed by all of us individually through out-of-pocket payments, such as co-pays, deductibles, the uninsured paying directly for care, people paying privately for premiums etc. Private employers only pay 19% of health care costs. In all, it is a very ‘regressive' way to finance health care, in that the poor pay a much higher percentage of their income for health care than higher income individuals do.
A universal public system would be financed this way: The public financing 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%) and an income tax on individuals (about 2%). The payroll tax would replace all other employer expenses for employees' health care. So the answer to the question is, “yes, this will raise your taxes.” But look at the whole story. This program would be raising your taxes, not to build a bridge in the next state or fight a war half way around the world, but to provide health care for you and your family. In 2004, the last year for which data is available, the average premium for a family of four was $9,950. If that amount represented 2% of the income you reported on your taxes, it would mean you made $497,500 annually—and, of course, you could easily afford nearly $10,000 in taxes for health care. Clearly, the increase in taxes will be more than offset by the health insurance premiums you will no longer have to pay.
What would this do for employer-based health insurance?
Under a single payer system, employer-based health insurance would be replaced by that 7% payroll tax on employers. Like the amounts quoted above, for employers who currently provide health care insurance for their employees, this amount would represent a savings when compared to the health care premiums they currently pay. Employers who have not provided insurance in the past will find that their expenses are a little higher under this system, but factoring in the benefits of preventive care and the fact that employees will be treated earlier rather than later, even employers who have not provided health care may find the new system saves them money in the long run. Of course the real advantage for employees is that they are no longer tied to a job just for the insurance.
Who will run the health care system?
There is a myth that, with state health insurance, the government will be making the medical decisions. But in a publicly financed, universal health care system medical decisions are left to the patient and doctor, as they should be. This is true even in the countries like the UK and Spain that have socialized medicine. In a public system the public has a say in how it is run. Cost containment measures are publicly managed at the state level by an elected and appointed body that represents the people of the state. This body decides on the benefit package, negotiates doctor fees and hospital budgets. It also is responsible for health planning and the distribution of expensive technology.
How will we keep doctors from doing too many procedures?
This is a problem in systems that reimburse physicians on a fee-for-service basis. In today's health system, another problem is physicians doing too little for patients. So the real question is, ‘how do we discourage both over-care and under-care'? One approach is to compare physicians' use of tests and procedures to their peers with similar patients. A physician who is ‘off the curve' will stand out. Another way is to set spending targets for each specialty. This encourages doctors to be prudent stewards and to make sure their colleagues are as well because any doctor doing unnecessary procedures will be taking money away from other physicians in the same specialty. Another way is to develop expert guidelines by health care groups to shape professional standards. Universal coverage is a pre-requisite for quality improvement of the system across the board.
What about complementary care, will it be covered?
Complementary care that is proven in clinical trials to be effective can be covered. Other treatments can be decided by the health care planning board or other public body. New kinds of treatments can be added to the benefits package over time as they are shown to be effective. Similarly, ineffective, harmful, or wasteful care can be removed from the benefits package, such as funding for a costly medication that is no better than aspirin for arthritis. Strong consumer/citizen advocacy for coverage of complementary care treatments may be necessary in Colorado to guarantee their inclusion in a Single Payer Plan.
Isn't the number of uninsured immigrants using public services driving up the costs of health care?
There is a misconception that immigrants as a group enter the workforce and use public health care services but pay nothing into the system to cover those expenses. The reality is that immigrants pay taxes, in the form of income, property, sales, and taxes at the federal and state level. As far as income tax payments go, sources vary in their accounts, but a range of studies find that immigrants pay between $90 and $140 billion a year in federal, state, and local taxes. Undocumented immigrants pay income taxes as well, as evidenced by the Social Security Administration's ‘suspense file' (taxes that cannot be matched to workers' names and social security numbers), which grew by $20 billion between 1990-98. In addition, the ratio between immigrant use of public benefits and the amount of taxes they pay is consistently favorable to the U.S. In one estimate, immigrants earn about $240 billion a year, pay about $90 billion a year in taxes and use about $5 billion in public benefits. There is additional data to show that immigrant tax payments total $20 to $30 billion more than the amount of government services they use.
Why not use tax subsidies to help the uninsured buy health insurance?
The major flaw of tax subsidies is that they would be used to help purchase plans in our current fragmented system. The administrative inefficiencies and inequities that characterize our system would be left in place and we would continue to waste valuable resources that should be going to patient care instead.
