Single Payer Mechanism Update - Georgetown 2023

Single payer mechanisms
Aff
Notes
The sanders distinction
Drug price controls
Perverse incentives
https://www.cbo.gov/system/files/2022-02/57637-Single-Payer-Systems.pdf
https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003013
bests analysts’ projections of the cost of the plan
helpful interactive visual on economists’ projection of savings https://www.nytimes.com/interactive/2019/04/10/upshot/medicare-for-all-bernie-sanders-cost-estimates.html
friedman estimate medicare, but for everyone, not just 65+ covers a lot less but is cheaper than the squo.
Mercatus estimate medicare will pay medical providers the same amount medicare pays now, lowering the price of the squo, but might cost more in other places.
RAND estimate costs slightly more than the squo, pays medical providers higher rates that medicare does in the squo.
Thorpe & Urban institute are good estimates for the neg.
Mechanisms
Bills that have been proposed
Proposal of the Physicians' Working Group for Single-Payer National Health Insurance
Feds are the insurer with regional offices conducting admin
Coverage hospital/medical benefits, dental benefits, long-term care, prescription drug benefits, no cost sharing.
Funding taxes (income, payroll)
Expanded & improved Medicare for all (sanders)
Federal gov’t is single insurer, state and regional offices conducting admin.
Coverage hospital/medical benefits, dental, vision, long term care, prescription drug, no cost sharing
Funding federal gov’t revenue (medicare, Medicaid, CHIP components), personal income tax, excise tax on payroll and self-employment, tax on unearned income, tax on stock and bond transactions
Health-Insurance Solution
A private insurer contracted by the federal gov’t is the single insurer
Covers legal residents not covered by Medicare or Medicaid.
‘Catastrophic coverage’ income dependent coverage
Deductible set at 10% of gross income, 5% copayment through deductible, out-of-pocket maximum is ten times the deductible.
Funding per capita tax
Collection of funds
Taxes (income and payroll)
Pros:
Easiest way to fund generates the most amount of money, has lots of available literature supporting, requires the least amount of implementation complications.
If progressive, costs very little for poorer Americans saves Americans money
Cons:
If funded on taxes alone, then susceptible to higher per capita costs
Could potentially not save money Americans might pay more per capita in taxes then they would for health care
Federal gov’t revenue
Pros:
Cons:
‘Catastrophic taxes’ per capita tax based on actuarial values of tailored benefits.
Pros:
Is tailored to income of the taxed pay actuarial values based off what benefits they get.
Is more comprehensive, specific, and complex hard to answer/find specific negative indictments of this funding plan, so is easier for the aff to win—if they understand it.
Cons:
Less fiscal redistribution the amount of taxes you pay determines the amount of coverage you get could potentially lower the solvency for the i/ls
Harder to understand/argue.
Pooling of funds
Purchasing of services
Provision of services/benefits/eligibility
Full coverage (sanders)
Catastrophic
https://pubmed.ncbi.nlm.nih.gov/9611420/
plan solves & promotes a smarter market.
Dolan, 19 [Ed Dolan, senior fellow at the Niskanen Center, PhD in economics from Yale, 6-2019, ‘Universal Catastrophic Coverage: Principles for Bipartisan Health Care Reform’, http://www.niskanencenter.org/wp-content/uploads/old_uploads/2019/06/Final_Universal-Catastrophic-Coverage.pdf //alundy]
The objective of UCC is to relieve the threat of financially ruinous medical bills for the very poor and very sick while requiring those who can to pay an affordable share of the cost of their own non-catastrophic care. To accomplish that, UCC sets an income-based cap on each household’s health care spending. The cap is defined by a number of parameters. The simplest version of UCC would have just two parameters, a low-income threshold and, for those above the threshold, a deductible that varies with household income. The low-income threshold is a level of household income below which even moderate medical expenditures would threaten serious financial distress. Under UCC, people whose incomes are at or below the threshold would have their health care costs covered in full. The dollar value of the threshold would vary with family size. For example, the threshold could be set equal to the federal poverty level (FPL) or a fixed percentage of it. As of 2019, the FPL stood at approximately $12,500 for an individual and $25,000 for a family of four. A household’s eligible income is defined as the amount by which household income exceeds the low-income threshold. In a simple version of UCC, the deductible could be set at, say, 10 percent of eligible income and the low- income threshold at the FPL. A family of four with total income of $50,000 would then have eligible income of $25,000 and a deductible of $2,500. A family with total income of $100,000 (approximately the upper limit of eligibility for premium subsidies on the ACA exchanges) would have a deductible of $7,500. A family with total income of $1 million would have a deductible of $97,500, and so on. Income could be defined as adjusted gross income reported on the previous year’s tax return, with some form of averaging for people with highly variable incomes. In addition, a UCC plan could include additional cost sharing in the form of coinsurance and copayments. For example, suppose the low-income threshold were set to the FPL and the deductible at 10 percent of eligible income. Coinsurance of 20 percent could then be assessed for health care expenses from 10 percent to 35 percent of eligible income. A family of four with eligible income of $50,000 would then face a deductible of $5,000 and 20 percent coinsurance on expenditures from $5,000 to $17,500. The family’s out-of-pocket maximum would then be $7,500, consisting of the $5,000 deductible plus $2,500 in coinsurance. Some UCC proposals also include a premium, which would be paid whether or not a household had any health care expenses in a given year. The premium, too, could vary with income, starting at zero for families below the lowincome threshold and following a sliding scale for those with higher incomes. A household’s total contribution to the cost of care would then be the sum of its out-of-pocket spending and its premium. Finally, many versions of UCC include a package of preventive services that would be exempt from cost sharing to avoid discouraging their use. Taken together, these UCC parameters define two zones, shown schematically in Figure 4. Households fall into one zone or the other according to income and health care spending. The full coverage zone includes those whose incomes are so low or whose health care needs are so great that any additional medical expenses would threaten financial catastrophe. They get full, first-dollar coverage of their health care expenses, at the margin, although those who are above the lowincome cutoff must first satisfy their deductible, copay, and coinsurance requirements. Access to care for people who fall into the full-coverage zone is a key concern of reformers who favor a single-payer approach. The cost-sharing zone comprises people who are healthy and/or wealthy enough that they do not fully meet their cost-sharing requirements. People in this zone face immediate economic incentives to shop carefully for health care services and to manage their expenses in a prudent manner. Some of them may do so by paying out of pocket, others may pay from health savings accounts, and still others may buy supplemental insurance or join health care sharing organizations. These incentives and mechanisms play an important role in market-based reform strategies. Figure 4: Coverage Zones The relative sizes of the two zones and the location of the borders between them depend on the values assigned to the various UCC parameters. The next section examines some of the considerations that go into deciding how those parameters should be set.
Deductibles?
Dolan, 19 [Ed Dolan, senior fellow at the Niskanen Center, PhD in economics from Yale, 6-2019, ‘Universal Catastrophic Coverage: Principles for Bipartisan Health Care Reform’, http://www.niskanencenter.org/wp-content/uploads/old_uploads/2019/06/Final_Universal-Catastrophic-Coverage.pdf //alundy]
Under UCC, deductibles have three effects. First, they limit the cost to the government budget in comparison to plans such as Medicare for All, which extend first-dollar coverage to everyone. Second, they serve the goal of fairness by requiring that people who can afford it to assume responsibility for their own non-catastrophic health care expenses. Third, together with coinsurance and copays, they define the cost-sharing zone of Figure 4, within which people face a direct tradeoff between spending on health care or on other goods and services. The third effect is the most controversial. The issue is whether the tradeoff created by deductibles induces people not just to spend less (which they do), but also to spend more wisely. According to many advocates of market-based health care, giving consumers “skin in the game” encourages them to compare the cost and quality of services from various providers, avoid excessive and inappropriate tests and procedures, and budget prudently to meet foreseeable medical expenses. However, numerous studies cast doubt on the idea that high deductible health plans (HDHPs) automatically make people better shoppers. For example, an NBER Working Paper by Zarek C. Brot-Goldberg et al. found “no evidence of consumers learning to price shop after two years in high deductible coverage.”14 The authors noted that consumers reduced quantities consumed across the board, including potentially valuable preventive care as well as potentially wasteful care such as unnecessary imaging. Similarly, a recent review of the literature in Health Affairs concluded, “Current evidence suggests that HDHPs are associated with lower health care costs as a result of a reduction in the use of health services, including appropriate services.”15 And a research letter by Jeffrey Kullgren and colleagues published by JAMA Network found that HDHPs were ineffective in inducing enrollees to set up health savings accounts, compare prices or quality of services across providers, discuss prices with their physicians, or negotiate prices.16 Studies such as these, which cast doubt on the most facile versions of the “skin in the game” argument, raise both technical and political issues for policymakers. The technical issues concern the extent to which the negative effects of high deductibles can be mitigated through better policy design. For example, although some consumers are reported to make no effort to obtain or act on price information, others who attempt to do so are frustrated by a lack of pricing transparency. Measures to make price and quality information more readily available to consumers could help. So could changes in training and incentives that encouraged physicians to discuss the relative cost effectiveness of treatment options.
The specific mechanisms of the aff solve job-lock
Dolan, 19 [Ed Dolan, senior fellow at the Niskanen Center, PhD in economics from Yale, 6-2019, ‘Universal Catastrophic Coverage: Principles for Bipartisan Health Care Reform’, http://www.niskanencenter.org/wp-content/uploads/old_uploads/2019/06/Final_Universal-Catastrophic-Coverage.pdf //alundy]
Close to half of all Americans receive health insurance coverage through their jobs. In no other major country is health care coverage tied as closely to employment as in the United States. American-style ESHI has several major unintended consequences.38 One problem is “job-lock” * the reluctance of many workers to move to a more suitable job, to become self-employed, or to start one’s own business for fear of losing insurance coverage. Even in other countries like Germany where employers play a role in health insurance, special measures exist to ensure that transition from job to job; from a job to self-employment; or from work to nonemployment does not interrupt coverage. The severe inequity of EHSI is a second problem. Health insurance benefits are tax-deductible, but the deduction is of greater value to people in higher tax brackets. The inequity is amplified by the fact that higher-paid workers are far more likely to get health benefits to begin with. According to data from the Social Security Administration, fewer than 20 percent of workers in the lowest quintile of the wage distribution get health benefits compared to more than 80 percent in the highest quintile.39 Robert Kaestner and Darren Lubotsky, economists at the University of Illinois, Chicago, estimate that workers in the bottom fifth of the family income distribution get annual tax benefits of less than $500 from ESHI, while those in the top fifth get benefits averaging $4,500. What is more, their data show that the inequity has become worse over time.40 A third problem is that the existence of thousands of ESHI plans, some of them quite small, adds to the fragmentation of the U.S. health care system and contributes to high administrative costs. As discussed earlier, although ESHI is nominally part of the private sector, it is by no means a creature of market forces. Inasmuch as it allows employers to pay a part of their labor cost as tax-deductible health benefits, the tax deductibility serves as an implicit wage subsidy. The benefits of the subsidy are presumably split between employers and employees according to the elasticity of demand for labor in various submarkets and according to the tax status of employees. However, the fact that the carrot of the deduction is backed up by the stick of the employer mandate clouds the picture. Although the mandate is apparently not binding on many employers, where it is binding, it is clear that the cost to employers of offering ESHI outweighs the value of the implicit subsidy. That possibility presumably lies behind the gradual decline in ESHI coverage. Any way one looks at it, it is hard to see any overall public policy justification for a program that primarily benefits high-wage employees while undermining labor mobility and adding to the fragmentation of the health care payment system. Any serious health care reform proposal should aim to eliminate ESHI once and for all. However desirable, the transition away from ESHI will not be easy. In part that is because a strong majority of beneficiaries who receive ESHI say they are satisfied with their coverage. In part, that is probably because many workers have little chance of getting other coverage, have no interest in changing jobs, or are on the favored end of the unequal distribution of tax benefits. In part also, it may be because workers do not understand that their cash wages would be likely to rise if EHSI were removed from the cost of labor. The experience with the ACA shows that reformers need to act cautiously in demanding that people change their health plans. A transition that induced people to move voluntarily onto UCC because they find it attractive would presumably be more politically acceptable than one that pushed people from ESHI to UCC by fiat. One way to make the transition from EHSI to UCC as voluntary as possible would be to lift the employer mandate, phase out the tax deductibility of EHSI, and allow employees to opt into UCC if they chose. Most lower-paid workers would probably take that option. Employers who wanted to use health care benefits to retain higher-paid employees could offer them supplemental policies to cover out-of-pocket costs, but without the tax deduction. That way many fewer people would be forced to make a change of plans against their will. Whether voluntary or compulsory, any transition away from EHSI would also have to decide what to do about the 20 percent of national health care costs that are now paid by employers. If ESHI disappeared, to be replaced with UCC, much of what is now spent by employers on health care would be passed through to employees as increase in cash wages, and some, perhaps, to business owners as increased profits. In that case, the federal budget would recapture some of the 20 percent through an increase in income tax revenues.
General
Empirics prove the current system is cost ineffective—SP lowers [drug?] costs through more effective mechanisms.
APHA, 21 [American Public Health Association, 10-26-21, ‘Adopting a Single-Payer Health System’, https://www.apha.org/Policies-and-Advocacy/Public-Health-Policy-Statements/Policy-Database/2022/01/07/Adopting-a-Single-Payer-Health-System //alundy]
Rising per capita costs of health care in the United States: National health expenditure (NHE) in the United States grew by 4.6% in 2018, to $3.65 trillion ($11,172 per capita).[1] This accounted for 17.7% of the gross domestic product (GDP) at the time.[1,2] The United States spends the most by far on health care among all 36 countries in the Organisation for Economic Co-operation and Development (OECD), both as a proportion of GDP and per capita.[3,4] Despite using fewer health care resources, the country spends $2,000 more per person than the next-highest-spending country, Switzerland, and nearly twice as much per capita on health care as the median for OECD countries.[3,5] The pricing system is inherently the single greatest driver of health care costs while providing fewer key health resources.[3] There is also a large and widening gap in the prices that public and private payers are charged for identical services, which indicates that the rising total NHE is primarily driven by private health care insurers[3] and pharmaceutical expenditures in particular.[6] U.S. pharmaceutical expenditures: U.S. prescription drug expenditures reached $335 billion in 2018, a 28% increase in a decade.[6] The growth is expected to continue and is projected to increase 67.3% to $560 billion by 2028.[6] In 2018, annual per capita U.S. prescription drug spending was $1,221, well above that of the United Kingdom ($526), Sweden ($534), and Germany ($884).[7] Prescription drug expenditures alone will represent 19.7% of the U.S. GDP by 2028.[6] Increased prescription drug expenditures will be largely driven by manufacturers’ increases in drug prices.[8] One of the distinctions in U.S. prescription policy is the burden of drug costs borne by patients as out-of-pocket costs. For instance, the Medicare Part D prescription drug benefit has no cap on out-of-pocket costs for beneficiaries.[9] Drug prices are significantly higher in the United States than in any other OECD country. By contrast, the United Kingdom requires little or no cost sharing by patients. Countries that have implemented single-payer (SP) financing systems offer multiple examples of ways to reduce drug prices, including harmonization of pharmaceutical coverage, pricing over a single formulary or across formularies, exclusion of added administrative costs from pharmacy benefit managers, and leveraging of scale to negotiate prices with suppliers.
Despite the size of US healthcare, it does little to contribute to positive economic outcomes.
APHA, 21 [American Public Health Association, 10-26-21, ‘Adopting a Single-Payer Health System’, https://www.apha.org/Policies-and-Advocacy/Public-Health-Policy-Statements/Policy-Database/2022/01/07/Adopting-a-Single-Payer-Health-System //alundy]
Efficiency in the United States relative to single-payer countries: While the United States spends more per capita on health care than any other OECD country, the additional spending contributes little value from either an economic or a health outcomes perspective.[3,5,10] Countries with SP spend less while their populations live longer, healthier lives.[11] The average life expectancy and the burden of adverse health outcomes for almost all major ch

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