CBO Report: A New Framework on Single-Payer Health Care

CBO Report: A New Framework on Single-Payer Health Care

Earlier this month, the Congressional Budget Office (CBO) released a report outlining options and technicalities lawmakers need to consider to establish a single-payer health care system in the United States. Although a lot to assess, the “single-payer” term generally refers to a system in which health care is paid for by a single public authority, as stated by Kaiser Health News (KHN). While once a pipe dream, this topic is officially mainstream and cultivating questions quickly.  

Here’s what you need to know: 

The Program will Cover Necessary Medical Services  

Single-payer architects are potentially looking at existing standards from the essential health benefits that govern Obamacare health plans to decipher what’s covered. The report is also displaying a more generous outlook on long-term care, which isn’t considered a benefit by Medicare or most private insurance companies. At a glance, the report is projecting an increase in public spending if all citizens were offered and received long-term care services and support. Under our current system, Americans use Medicaid benefits for such services but use their own money before they’ve been accepted into the Medicaid program.   

According the KHN the CBO report suggested some kind of “cost-effectiveness criterion” could determine what the government is willing to cover. A single-payer benefit system would also need to specify which new treatments and technologies would be covered. The CBO report explained, “An independent board could recommend whether or not new treatments and drugs should be covered after their clinical and cost-effectiveness had been demonstrated.”  

New Taxes 

Although no easy formula has been created, conversation around cost-sharing has been developing. In some single-payer structures, individuals must pay a copay, meet a deductible or pay a premium as part of their selected health plan. That could potentially decrease the need for new taxes. KHN analyzes: “The CBO report suggests that new taxes would likely play a role in financing a new single-payer plan. But what kind of taxes — a payroll tax, an income tax or a sales tax, for instance — has not yet been stipulated. And each would have different consequences.” Under the proposed single-payer system, enrollees may pay nothing or a small percentage of the cost when receiving care. Individuals enrolled in private insurance plans and Medicare would still share costs for most services.  

Lowered Health Expenses and Increased Value 

By abolishing private insurers, a single-payer system would cut hospital administrative overhead, leaving the government to pay a reduced rate in hospital costs. The single-payer bottom line is reflective of what the system pays hospitals, doctors, and drug companies for products and services. The CBO reports the probable negotiation in drug and administrative pricing, meaning direct negotiations between a single-payer system and manufactures could determine prescription drug prices. In addition, “Government spending on health care would increase substantially under a single-payer system.” The proposed system explains how beneficiaries would pay out-of-pocket for premiums, cost sharing evaluated on income-based subsides, and additional contributions from high-income beneficiaries. Lastly, the CBO report states, “A single-payer system could establish provider payment rates through negotiations. Organizations representing providers, such as the American Medical Association, could negotiate payment rates with the system, and those negotiations could occur within broad budgetary guidelines such as a national spending limit.”  

Some members of Congress are proposing a new framework on single-payer health care in hopes of all citizens of the United States having health insurance. The CBO report discusses many features of their projected system while leaving major factors in question. Design considerations and choices are ultimately left to our policymakers as they analyze cost, payment, administration, provider rules, enrollment, cost-sharing, and role of current systems.  

Sources: 

  1. https://www.cbo.gov/system/files/2019-05/55150-singlepayer.pdf 
  2. https://khn.org/news/cbos-report-on-single-payer-health-care-holds-more-questions-than-answers/

The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon. Please direct any questions or comments to research@softheon.com  

Amanda Wolfer

Amanda is the Senior Digital Strategist at Softheon. She works closely with the Marketing team to develop and maintain Softheon’s blog and social media presence. She received her bachelor’s degree in English Language & Literature and Organizational Communication from SUNY New Paltz in New Paltz, New York.

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