What is Single Payer?
Single-payer is a term used to describe a type of financing
system. It refers to one entity acting as administrator, or
“payer.” In the case of health care, a single-payer system
would be setup such that one entity—a government run
organization—would collect all health care fees, and pay out
all health care costs. In the current US
system, there are literally tens of thousands of different
health care organizations—HMOs, billing agencies, etc. By
having so many different payers of health care fees, there is
an enormous amount of administrative waste generated in the
system. (Just imagine how complex billing must be in a
doctor’s office, when each insurance company requires a
different form to be completed, has a different billing
system, different billing contacts and phone numbers—it’s
very confusing.) In a single-payer system, all hospitals,
doctors, and other health care providers would bill one entity
for their services. This alone reduces administrative waste
greatly, and saves money, which can be used to provide care
and insurance to those who currently don’t have it.
Access and Benefits
All Americans would receive comprehensive medical benefits
under single payer. Coverage would include all medically
necessary services, including rehabilitative, long-term, and
home care; mental health care, prescription drugs, and medical
supplies; and preventive and public health measures.
Care would be based on need, not on ability to pay.
Hospital billing would be virtually eliminated. Instead,
hospitals would receive an annual lump-sum payment from the
government to cover operating expenses—a “global
budget.” A separate budget would cover such expenses as
hospital expansion, the purchase of technology, marketing,
Doctors would have three options for payment:
fee-for-service, salaried positions in hospitals, and salaried
positions within group practices or HMOs.
Fees would be negotiated between a representative of the
fee-for-service practitioners (such as the state medical
society) and a state payment board. In most cases, government
would serve as administrator, not employer.
The program would be federally financed and administered by
a single public insurer at the state or regional level.
Premiums, copayments, and deductibles would be eliminated.
Employers would pay a 7.0 percent payroll tax and employees
would pay 2.0 percent, essentially converting premium payments
to a health care payroll tax. 90 to 95 percent of people would
pay less overall for health care. Financing includes a $2 per
pack cigarette tax.
The General Accounting Office projects an administrative
savings of 10 percent through the elimination of private
insurance bills and administrative waste, or $150 billion in
2002. This savings would pay for providing medical care to
those currently underserved.
The Congressional Budget Office projects that single payer
would reduce overall health costs by $225 billion by 2004
despite the expansion of comprehensive care to all Americans.
No other plan projects this kind of savings.
Different Perspectives on the Benefits of Single-Payer
Each person, regardless of ability to pay would receive
high-quality, comprehensive medical care, and the free choice
of doctors and hospitals. Individuals would receive no bills,
and copayment and deductibles would be eliminated. Most people
would pay less overall for health care than they pay now.
Doctors’ incomes would change little, though the
disparity in income between specialties would shrink. The need
for a “wallet biopsy” before treatment would be
eliminated; time currently wasted on administrative duties
could be channeled into providing care; and clinical decisions
would no longer be dictated by insurance company policy.
Medical endorsements include PNHP (9,000),
the American Public Health Association (30,000), American
Association of Community Psychiatrists, Massachusetts Academy
of Family Practice, American Medical Women’s Association
(13,500), Alameda-Contra Costa Medical Society, American
Medical Student’s Association, D.C. Medical
Society, National Medical Association (6,500), American
College of Physicians (Illinois Chapter), Long Island
Dermatological Society, Islamic Medical Association, American
Nurses Association, the Nurses’ Network for a National
Health Program, and the D.C. chapter
of the American Medical Association.
The massive numbers of administrative personnel needed to
handle itemized billing to 1,500 private insurance companies
would no longer be needed. A negotiated “global budget”
would cover operating expenses. Budgets for capital would be
allocated separately based on health care priorities.
Hospitals would no longer close because of unpaid bills.
The need for private insurance would be eliminated. One
single payer bill currently in the House (H.R. 1200) would
provide one percent of funding for retraining displaced
insurance workers during its first few years of
In general, businesses would see Single Payer limit their
health costs and remove the burden of administering health
insurance for their employees.
Single payer would be the simplest and most efficient
health care plan that Congress could implement.
care is not just another commodity. It is not a gift to be
rationed based on the ability to pay. It is time to make
universal health insurance a national priority, so that the
basic right to health care can finally become a reality for
every American." - Ted Kennedy, US Senator