Universal, publicly funded healthcare is the goal of Maine AllCare. The ideal way to achieve this is at the national level; state plans must conform to federal regulations and will have less clout, but could be effective and pave the way to a national plan. Following is a summary of how these two approaches could work.
Though Senator Sanders’ Medicare for All Act of 2019 and Representative Jayapal’s Medicare for All Act of 2019 are good examples of national plans, the Physicians’ Proposal of our parent organization, Physicians for a National Health Program, is comparable in many ways, and more readily accessible. Like the Medicare for All plans, the Proposal envisions a single-payer (as opposed to our current multi-payer) system--the National Health Program (NHP)--that can be seen as an expansion of Medicare to the entire population, with some important improvements (greatly reduced cost sharing; improved coverage including dental care, mental health, and rehabilitation; and elimination of private insurance that duplicates public coverage).
In the NHP, hospitals would be paid through negotiated global budgets covering operating expenses, while capital expenses (expansion, major equipment, etc.) would be separately negotiated with input from regional planning boards. Healthcare professionals would be paid through either a negotiated fee-for-service schedule, or negotiated salaries for those working in nonprofit hospitals, capitated practices, integrated healthcare systems, etc. Physician education would be fully subsidized, emphasizing improved balance of primary care and specialty training. As almost all healthcare institutions and professionals would participate in the NHP, patients would have free choice of providers.
Long-term care for the disabled of all ages would be covered, largely through global budgets.
The NHP would establish a national formulary and would negotiate drug prices with pharmaceutical companies. Similarly, it would negotiate medical device and supply prices with manufacturers.
Savings achieved by the NHP would be expected to lower total national healthcare cost and curb price inflation through: global budgets for hospitals; negotiated professional fees; negotiated medication, device, and supply prices; and reduced billing and insurance overhead, marketing costs, and investor profits. No formal fiscal analysis of the NHP has been done, but analyses of comparable Medicare for All plans by Friedman and by the Political Economy Research Institute have concluded that public plans would reduce national healthcare costs as they extend quality coverage to all Americans.
Funding of the NHP would be uncoupled from the workplace and accomplished through progressive taxes, which would offset current premiums and out-of-pocket spending, and replace Medicare and Medicaid taxes.
While a national plan would be the most cost-effective and straightforward approach to universal, publicly funded healthcare, political obstacles remain daunting. Recognizing this, there are many states actively working on state and regional solutions and Maine is one of them.
The Maine Center For Economic Policy (MECEP) recently published an analysis of a state-level model that would cover everyone in Maine and save the state roughly $1.5 billion a year. Under the model analyzed by MECEP, federal programs including Medicare, Medicaid, VA, Tricare and Indian Health would remain intact and a state-run program would cover the uninsured as well as those commercially insured through the workplace or the ACA. The model fills coverage gaps and eliminates out-of-pocket expenses for those enrolled in federal programs. It also provides dental, vision, and hearing benefits to every Maine resident.
Approximately 80 percent of the cost of a new publicly funded healthcare system would be paid for in the form of individual and employer taxes that would recapture funds currently being spent on premiums, deductibles, and out-of-pocket costs. The remainder — about $1 billion — would be covered by a modest progressive tax. The MECEP report includes several potential revenue sources.
Due to elimination of insurance premiums and out of pocket health costs, 80 percent of families and individuals would see a net gain in their household income. Municipalities, counties and school districts would see an annual net savings of $214 million, or 8.4 percent of current property tax, equivalent to a reduction of 1.5 mills. Most employers would pay the same or less than they do today. Workers’ compensation costs would be cut in half. Employers would be freed of the costs of choosing and managing healthcare coverage plans.
Hospitals and providers would be paid promptly and directly at Medicare rates. Uncompensated charity care would be eliminated, and administrative overhead would be reduced. Most providers would see minimal, if any, net financial effects. All private hospitals and doctors’ offices would remain private.
An estimated 3,000 administrative jobs in healthcare would be lost due to a greatly simplified system. The model presumes wage replacement and retraining costs for those workers as part of the transition. The report discussed but did not quantify the economic benefits that would accrue from a healthier workforce, along with increased entrepreneurship when healthcare coverage is decoupled from employment.
Another state example is the Minnesota Heath Plan, which Minnesota Senator John Marty describes in detail in his book: Healing Health Care, The Case for a Commonsense Universal Health System.