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What is Single Payer? Is it Socialized Medicine?

by: DocJess

Thu Jul 23, 2009 at 09:30:00 AM EDT


The Single Payer bill furthest along in the legislative process belongs to the state of Pennsylvania, where the House bill was resubmitted last week, with 36 co-sponsors. You can read the whole bill here. (Don't worry, it's only 27 pages)

Basically:

The plan shall provide health care coverage for all citizens of this Commonwealth and for certain eligible visitors. The agency shall work simultaneously to control health care costs, achieve measurable improvement in health care outcomes, promote a culture of health awareness and develop an integrated health care database to support health care planning and quality assurance.

I'll answer in detail after the jump, but this is NOT socialized medicine. 

Here is what would be covered: 

Covered services.

(a) Benefits package.--The board shall establish a single health benefits package within the plan that shall include, but
not be limited to, all of the following:

(1) All medically necessary inpatient and outpatient are and treatment, both primary and secondary.
(2) Emergency services.
(3) Emergency and other medically necessary transport to covered health services.
(4) Rehabilitation services, including speech, occupational, physical and massage therapy.
(5) Inpatient and outpatient mental health services and substance abuse treatment.
(6) Hospice care.
(7) Prescription drugs and prescribed medical nutrition.
(8) Vision care, aids and equipment.
(9) Hearing care, hearing aids and equipment.
(10) Diagnostic medical tests, including laboratory tests and imaging procedures.
(11) Medical supplies and prescribed medical equipment.
(12) Immunizations, preventive care, health maintenance care and screening.
(13) Dental care.
(14) Home health care services.
(15) Chiropractic and massage therapy.
(16) Complementary and alternative modalities that have been shown by the National Institute of Health's Division of Complementary and Alternative Medicine to be safe and effective for possible inclusion as covered benefits.
(17) Long-term care for those unable to care for themselves independently and including assisted and skilled care.

(b) Exclusions for preexisting conditions.--The plan shall not exclude or limit coverage due to preexisting conditions.

(c) Copayments, deductibles, etc.--Beneficiaries of the plan are not subject to copayments, deductibles, point-of-service
charges or any other fee or charge for a service within the package and shall not be directly billed nor balance billed by
participating providers for covered benefits provided to the beneficiary. Where a beneficiary has directly paid for
nonemergency services of a nonparticipating provider, the beneficiary may submit a claim for reimbursement from the plan for the amount the plan would have paid a participating provider for the same service. Where emergency services are rendered by a nonparticipating provider, the beneficiary shall receive reimbursement of the full amount paid to such nonparticipating provider not to exceed 125% of the amount the plan would have paid a participating provider for the same service.

You will NEVER see a more comprehensive plan. 

The funding system involves taxes. There, I've said it. OOOOH - the third rail!!!!!

Pause.

Breathe.

Good, lightening has not struck.

You say the word "taxes" and people seem to implode and lose their minds. What they forget, especially in this case, is that other costs offset the taxes. For example, pretend that you are currently employed, with a spouse and two kids. You receive health insurance through your job. The annual premium is $12,500 (which is about the median, depending on whose numbers you believe, the range of everything I've seen is about $11,600 to $15,500). You pay 20% of the premium, or, $2,500 annually. You earn $50,000/year. The tax would be 3% - that would be $1,500. Thus, you'd pay less in taxes than your current premium, plus, no deductibles or co-pays. 

On the employer side, your employer is now paying $10,000 for your premiums (actually a little less because of the tax exclusion) or 20% of your pay. The tax to your employer would be 10% or $5,000, HALF of what it is paying now. 

I know your question: why does it cost so much less and provide more? Answer after the jump.

DocJess :: What is Single Payer? Is it Socialized Medicine?

Let's say you break your leg. You go to the emergency room, where they x-ray your leg, operate because it is a compound fracture and you need a pin, set your leg, keep you in the hospital for two days, and then send you home with instructions for follow-up care.

Billing would come, separately, from the ER, the docs, the radiologists, the hospital, the pharmacy, etc. 

Currently the goal of your insurance company is to find a way to pay out less for your treatment than it earned from premiums. Therefore, there are costs associated with processing the bill, denying parts of it, reviewing it, and finally paying for part of it, leaving the rest to you. This process can easily add hundreds of dollars to a claim. For a complicated claim, it can add thousands of dollars.

Those administrative costs disappear with Single Payer. In addition, due to the implementation of electronic records and, most likely, bundling, the costs from the providers decrease and there is less of a bill to pay. Further, since there is no longer a private insurer with "the deal" there are no ancillary costs associated with making-up the costs not accorded the insurer with "the deal". 

Thus, overall costs and specific costs reduce in real terms.

______

Finally: Is this socialized medicine?

No.

Socialized medicine means that the government both pays for and provides health care. Under Single Payer, services are still provided privately. The only difference to the provider is to which address the bill is sent. And also that the bills will be paid without argument, re-submission, or court time. 

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most importantly, to me (0.00 / 0)
my life will likely be cut short a few decades without single payer or at least public option...

Where is the money going to come from. (0.00 / 0)
I completely agree with the Single Pay Option for several reasons.
In my field I see a lot of paychecks and tax returns.
The 20% that the individual pays for insurance premiums is I feel truly on the low side.
Many companies are going 50-50 and then there are the co-pays etc.
1.  I am looking at a paycheck of which yes it is 50% cost to the employee.  This comes out to 12.5% of the paycheck of a $65,000 salary which equals $8125 for health insurance premiums.  This does not include co-pays or prescriptions,glasses and many more things.
2.  According to tax laws any medical cost over 7.5% of your gross income is tax deductible.
3.  This automatically gives the individual $3575 of nontaxable income and with the co-pays and prescriptions it goes much higher.  Total nontaxable income on the tax return is $7900 for the family of 4.

With the Single Payer Plan the family only pays $1950 and has the $14750 to spend in our economy minus; the state gets more sales tax AND the regular tax AND the Feds get their tax.
It is now taxable income because the 7.5% threshold is not met for a tax deduction.  Will this also help the State situation?

In reality the middle class is paying for this AND SAVING and I say let the corporations keep their tax deduction and perhaps a raise in income per individual will occur.
If this needs to be done to get this passed it is worth it.

To bring up people that earn $8 an hour at 40hr weeks.  
$8 times 40 hrs times 52 equals $16640 at a cost of 3% equals $9.60 a week for insurance.  This cost is covered if one is sick and gets better because they could get antibiotics or treatment and only missed 2 days of work instead of 7 days. Many hourly individuals do not have insurance or sick days.

Other than the moral issues that everyone should have health care(which I feel is correct) I ask is this a stimulus in hiding.
The cost for this is not known.  I just would like to see the projections from the states or the feds; that should be able to take into account the extra income from this measure. Just look at the individuals who have med deductions.  Perhaps it will be a cost of 5-7% but the income will still be there for the state and feds and the cost will be lower for the individual.  

Just some questions.



If I understand your question... (0.00 / 0)
I think you're asking about the maximum that someone could pay for health insurance, and that number, under the Pennsylvania plan, is 3%.

The 7.5% AGI and above goes away because no one will pay that much.

As for deductibility, because this would be a state tax, for some people it would be deductible on their Fed returns AS a state tax.

There are some interesting numbers on the savings predicated on Single Payer. If you click on the "full of lies" link in the previous post, you'll see that numbers showing the benefits of Single Payer have been squelched by the insurance companies. In addition, there are many municipalities and counties in Pennsylvania which would save a incredible amount of money if this were implemented. Not every municipality and school board, but most. You can see the data here.

Those savings, and the corollary savings at the state level can lead to lower tax rates for all. They are also indicative of what companies can save based on what they are paying now for similar numbers of employees.

I don't understand what you mean by "stimulus in hiding"


[ Parent ]
employee cost (0.00 / 0)
Employee cost with my company is 26%. That's before co-pays. It takes us about 4 months to meet deductions even with just physicals and a couple of medical treatments.

[ Parent ]
Uh Um (0.00 / 0)
I am under the assumption that 3% is all you pay.  Yes?

If this is correct the individual will have more income to spend, Ok it is a lot of money.
Spending on services will increase, retail etc.
Without the tax deduction the State and Fed tax would increase revenue.
If the person spends more money in the state that will create income to business thus stimulus.
Am I really off on this????
 


As proposed (0.00 / 0)
Yes, you're correct, an individual would pay a tax of 3% of gross income for health care. That would cover dependent children. What has NOT been formalized is whether if you had two working adults they would each pay 3% of each person's income or whether one would be a dependent of the other. I assume it would be the former, but don't quote me. (It's still a great deal compared to current rates.)

The one exception would be if someone is self-employed. Then, that person would pay the employer portion and the employee person, unless, again, it changes through the legislative process. The reason for the dual charge relates to current PA laws on the books related to insurance parity, but there is talk of trying to reform that particular piece of legislation in concert with this bill.

As for more spending, there are some who believe that if employers pay less for health care, they would raise salaries. I'm not in that camp, but admit it's possible.

I think what you're asking is whether this type of program would lead to the type of indirect stimulus where person "A" has a little more money, and therefore eats dinner at restaurant "B", increasing income to both the restaurant (which orders more food and supplies) and the waitperson, who now has more disposable income to spend, this increasing the income to farms, paper suppliers, and wherever the waitperson shops, thus leading to more production across the board, and a stronger economy. The answer is a resounding YES! because it is what will eventually get us out of the current crisis.

In terms of the government, the money they take in from the health care tax actually funds the health care system. Beginning in year 2 (or year 3 if you're a REAL pessimist) -- it is revenue neutral. The first year, the state would absorb some start up costs, which would either be recouped in year 2 or 3. However, the amount that the state currently SPENDS on health care, through providing for its employees, and paying its part of the unpaid hospital bills created by people who are uninsured/underinsured walking out on hospital bills, would greatly decrease.

Whether the state uses the additional funds to decrease other taxes and fees, or increase programs is yet to be decided.

But in terms of stimulus, there are two kinds of economic stimulus: direct and indirect. This program would lead to both types.  


[ Parent ]
Best argument.. (0.00 / 0)
This is exactly the kind of argument I was expecting more of from Obama last night, he kind of touched on it a bit but without details or examples and he was referring more to private insurance cost coming down.

The way you framed it, and Jean provides the example in comments, is a convincing argument and I think a winning one with most Americans.

 Whenever I talk about Health care with someone who uses the socialized medicine argument, or government getting between you and your doctor, I try to explain that with a public option the only industry in danger is the insurance companies, and explain that the #1 goal of any business is to make a profit at any cost, thus employing people whose sole job it is to deny claims, the company's CEO, COO, CFO, President, Vice Presidents, etc.. etc.. all make ridiculously high salaries paid for by high premiums and denied claims. With a Government program there wouldn't be the profit and inflated salary and that would equate into less money you or your employer would have to pay for Health care then I ask them if they would rather have their employer pay an Insurance company $12,000 or be paid an extra $12,000 and pay 4 or 5 thousand in taxes.. This is where principal and logic collide, they have been brainwashed that taxes are evil and resent paying taxes, yet they can do the math and realize they can have 7 or 8 thousand dollars more in salary. It's interesting to hear an answer of "I'd rather pay a private company more money than pay more taxes." I believe presenting the argument this way, though the quick emotional, patriotic answer is no taxes, the realization of more money has a slow erosive effect, and I bet a few months from now asked the same question from another person they'll choose the higher salary.

If the best we get this year is State run Single Payer I think that would be a huge victory, and it would be only a matter of time before it spreads and is adopted nationally.

Thanks for all your posts on Health Care and all your hard work...


Joe Giannasio (0.00 / 0)
Check out the Shaker Heights speech -- he "got it" today! It's not ALL the way to Single Payer, but the frame is better, and the understanding of patient care is better.

THANK YOU for your appreciation. I honestly try....


[ Parent ]
Ok (0.00 / 0)
So my question is why can't we get figures from the State(They have the Fed Returns on File, that is how they got their figures.) that show savings, new taxes(revenue)for the state and let's just say only 50% of the savings will be spent on services and retail(please remember the 5-10% tax for state sales tax and up to 1% for local depending on the city).  From what I see I do not see how this is included in figures given for the cost or the revenue from the program.
Since this is a State Program I would also want to see the amount that goes to the Feds Income Tax.  There is no doubt the Feds get some cash especially since the average income would increase by about 5-10 percent for those with insurance (after the 7.5% deduct is met).
For those that are opposing "Is this the info they want to know?"

Repubs, Dems, I want to know. This info is on one line on the tax return, medical deduction after 7.5% gross income is calculated.  It cannot be that hard to get the information.  The IRS and the State flags this stuff all the time.  We can reasonably guess what people save, we need to know if there is income generated.
I am now off my soapbox. Well, maybe:)

 


[ Parent ]
It's virtually impossible to get that data (0.00 / 0)
First, tax return data is privacy protected, so it cannot be released without the permission of the individual.

Second, to get the kind of aggregated data you want, in the form you want it, requires an economic impact study, which so far the state of PA has been unwilling to fund, despite numerous requests.

Next, there are no portions of the tax that would go back to the Feds.

As for the medical deduction, it is not reasonable that it paid by a large percentage of people. For starters, 62.5% of tax filers use the standard deduction, per IRS data http://www.irs.gov/taxstats/ar...

Then, most people, unless they are very ill, don't come close to hitting the 7.5% threshold. For the self-employed, who pay their own premiums and could more easily cross the threshold, it's an above the line deduction for part of it, and the rest comes off on Schedule C.

If you want to calculate something -- here in PA, we have sales tax of 6%, but it excludes food, clothing, medicine and a number of other things. Philadelphia is trying to get a city sales tax, but has been unsuccessful. To the best of my knowledge, no other city in the state has one.

If you looked over the spreadsheet numbers, none of them came from the state. They were acquired by individual humans going to the offices and collecting the data from each city and county and school board. I don't know that the state DOES have the numbers you want.  


[ Parent ]
I am comparing Apples to Oranges. (0.00 / 0)
I deal with tax returns in CA all the time.  
Yes, all are homeowners and many have medical deductions.
I have never seen a 1040 ez with standard deductions used in a refi or purchase, yes it is still very expensive here.
Even though we are losing our behinds in the value of our homes.

I swear I am not lying that medium to small companies have the employees pay 50% of medical which does cost individuals between $6500 to $9000 for an employee with a family and 1 or more children.
This deduction is standard in CA.
Now let me explain getting above the 7.5% threshold.
Here are some easy examples
1.  You are blessed and only pay $6500 which is 10% of your income.
2.  Lovely co-pays.  Prescriptions: husband(over 55) takes cholesterol medicine, high blood pressure and the total is  $15 and $30 copay monthly.  Kids: One has acne and migraines and the other has other monthly  meds and the total is.$15,$15,$15,$30.  The wife is on birth control and that is $50.  Total meds cost a month $170.  
3.  The doctor visits:  Reasonable to say 2 times a year per person to renew scripts and physicals not counting if you really get sick. $30 per visit times eight is $240.
4.  Thank goodness the new insurance covers eye care so it is only $45 per FULL exam and you belong to Costco so the contacts are cheap. $45 times 4 = $180 plus glasses and contacts for two is about $350.
5.  I am totally ignoring if someone broke a leg, emergency room, heart attack and when that knee just has to be cleaned out by the ortho after 55 years of abuse.
6.  It looks like the totals which include the $6500 plus co-pays is $7440.  Please understand this is with ZERO mishaps with a family of 4.  Thank goodness the kids never get sick and the husband and wife are doing all preventative so they never get sick. And yes the family could do without the contacts but peripheral vision is pretty cool.
I apologize for the sarcasm but it is very aggravating.

In reference to the IRS not spreading it's knowledge is stupid.  No names, social security #'s or any personal info needs to be given.  No offense they already have the info at a push of a button.  How do you think they decide the audits.

That only 62.5% file standard deductions, well, a few pay for many and I have no problem with that. I am now waiting for lightening to strike.

In reference to the Feds not getting taxes perhaps I was not clear.  If someone does not have a tax exemption then they pay money on that money.  If you claimed $4000 the prior year and cannot claim it this year due to lower costs then the Feds will also get some money from the higher income.

I again apologize. This subject makes me go a bit agro.
All people want is to  protect their families and have health care.  Isn't that what having a family is about?



[ Parent ]
So would everyone have to pay? (0.00 / 0)
One of the deals was that you could keep the plan you have. Would only those opting in for the single payer plan have to pay the taxes for it?

I know mine is different, but my health care premiums are less than 0.5%, and that is combining medical and dental. Wish everyone could go to that.  


Yes, everyone pays, and no your health care is not that cheap... (0.00 / 0)
YOU only pay a little because we, the taxpayers, pick up the rest of your costs. (I think -- because if memory serves, your health insurance is government funded.)

In addition, part of your state income taxes go towards covering the costs of the uninsured, part of your federal taxes go to your own insurance, plus your contribution to the people the Fed is now covering, and their part of covering costs associated with the uninsured.

Remember, TAX dollars support the people who currently get public insurance. This includes:

Active and retired military
Active and retired Fed government employees (bureaucrats)
Active and retired Fed government employees (elected)
Active and retired state workers (elected, bureaucrats, teachers, police, fire, etc)
Prisoners
Medicare recipients (retired, disabled, dependents)
Medicaid reciptients
Native Americans
ALL uninsured and underinsured people who leave unpaid hospital bills


[ Parent ]
And I pay those taxes too (0.00 / 0)
Except for State, we don't have State Income taxes.

I look at it the same way as a business. Our employer (the USA) pays a portion of our health care premiums, and the share holders help fund that. All tax payers are stock holders in the Country. If Companies could opt into TriCare, they would reduce their costs, and provide worthless health care to their people like I get. There is a reason the military call it "Try-to-get-Care".

So don't hate me for serving the country for 20 plus years and having a benefit. I served, so you could blog. ;o)


[ Parent ]
Oops -- wrong point (0.00 / 0)
I wasn't saying that people who served shouldn't get benefits, not at all. What I was saying was that when you say that you pay .05%, OBJECTIVELY the cost of your health insurance is not that low, it's only that low because the government is covering the rest of the premium.

The discussion is about the best way to provide REALLY GOOD CARE to the most number of people.

I believe you'd prefer to pay 3% instead of .05% if it meant getting REALLY GOOD CARE.

I was NOT begrudging your service. I didn't say the government paid for people's benefits was a BAD thing -- I'm IN FAVOUR of Single Payer, private provider. Across the board, across the country.  


[ Parent ]
I too am for what is best for the most (0.00 / 0)
Just not sure the best way. Single payer would probably be ok if you got good care and they could reduce costs. Just tough to see that happen with all the lobbyist money controlling congress.

[ Parent ]


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