Single-Payer Health Insurance for Oregon
By Rep. Michael Dembrow. Rep. Dembrow is a Democrat that represents House District 45, which includes portions of Northeast Portland, Maywood Park, and Parkrose.
There are many good things we can say about health care reform at the state and federal level. Here in Oregon we passed the Healthy Kids Act, extending coverage to all of Oregon’s uninsured children, a really remarkable achievement. As a result of the federal reforms, children all over the country can no longer be denied coverage because of pre-existing conditions, and in a few years that will extend to everyone. Young adults can stay on their parents’ coverage until they are 26. Seniors see an end to the donut-hole in their prescription drug coverage. If things stay on track, an insurance exchange for individuals and small businesses is coming, and perhaps even some kind of public option for Oregon.
Despite these points of progress, though, many gaps will still remain in these plans. I see three problems in particular:
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First, there will still be people who will be left out, and that’s going to continue to drive up the cost of coverage for the rest of us.
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Second, for most people insurance is still going to be tied to employment. So if you lose your job, change your job, or drop below full-time at your job, you’re going to have to change your coverage or even worse--you’re going to lose your coverage entirely.
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Third, for the most part our system will still rely on private insurance companies, who charge very high administrative fees, and whose primary interest is their own profits.
At best, what we’re going to continue to have is a patchwork system. There’s a real danger that people are going to fall through the cracks, middle-class families are going to pay more, and small businesses are going to continue to be hammered.
Fortunately, one of the best things that federal health insurance reform did was open the door to further experimentation by the states. Thanks in large part to work done by Senator Wyden, states can try out their own solutions, as long as they are expanding access to quality healthcare to more people more affordably.
I believe that the best solution to the three problems that I mentioned above will be a “single payer” system. This would be a system like Medicare, but extended to all. Everyone would pay into the system in a progressive manner, and it would relieve the burden on Oregon’s small businesses. Initial projections show that we could create a system that in total would cost no more than we are currently paying as individuals, businesses, and the state—but everyone would be covered, would have access to quality care by the provider of their choice, and the rise in costs could be contained.
One of the real problems with the Federal reform process was that advocates of single payer were never allowed a seat at the table. For reasons of politics and influence and strategy it was ruled out before it was even considered. That’s wrong, it’s bad government, and we need to try to make it right.
I would like to see Oregon taking steps to move in this direction. So I’ve partnered with a coalition of single payer advocates--Health Care for All Oregon, Physicians for a National Health Program, Jobs with Justice, and the Oregon League of Women Voters—to develop The Affordable Health Care for All Oregonians Act for the 2011 legislative session. To see the concepts behind the bill, go to the Health Care for All Oregon (HCAO) website. Senator Chip Shields has committed to introduce the bill on the Senate side, and a number of my legislative colleagues have indicated interest in co-sponsoring.
Obviously, getting to single payer is a long-term project. It's not just about moving a piece of legislation; it's a movement. It's going to require ongoing commitment, an enormous amount of effort, organizing, and education. It's a movement that needs to reach beyond the usual confines of the mainstream media. Please let me know if you’re willing to help.
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Dec. 03, 2010
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11:34 a.m.
Dec 3, '10
To reiterate what was discussed on the previous post of this topic: How do you keep people from moving to Oregon JUST to get free health care?
12:25 p.m.
Dec 3, '10
Hawaii has single payer health care. The was no rush for those without insurance to rush to Hawaii for free health care.
The issue doesn't exist. Doesn't happen.
1:49 p.m.
Dec 3, '10
Moving to Hawaii, which is an island which also has the highest cost of living expenses on average in any of the 50 states, is problematic as a counter-argument at best.
5:12 p.m.
Dec 3, '10
The health care costs people wouldn't have to pay in Hawaii would make up the difference in cost of living.
10:48 a.m.
Dec 6, '10
While it helps to offset living expenses in Hawaii, it doesn't make up the difference. Hawaii is a unique animal among the 50 states because of the amount of basic commodities it has to import via overseas shipping which drives the cost of things we in the lower 48 (and Alaska as well) simply take for granted. Most everything not produced locally, from a windshield wiper blade to a box of Kleenex has to be shipped overseas and not simply loaded on a truck for delivery.
9:27 p.m.
Dec 4, '10
Single payer systems in Canada came in a province-by-province way. It worked almost in a domino effect. When the system worked in one region, it spread to others.
10:55 a.m.
Dec 6, '10
True, but what became the Canadian Healthcare Plan started in the Saskatchewan where, due to its low population and a shortage of doctors lead to towns subsidizing doctor wages. This was expanded to the formation of union hospitals, which guaranteed free hospital care for much of the population. Douglas had hoped to provide universal health care, but the province did not have the money.
Alberta then followed a similar health care act, and in 1957 the federal government passed the Hospital Insurance and Diagnostic Services Act to fund 50% of the cost of such programs for any provincial government that adopted them.
3:33 p.m.
Dec 3, '10
I had a neighbor in an apartment in Portland in 2002, I believe, who moved here from Texas to have a lot of free dental work done. He bragged about it. "Hey if you Oregonians want to pay for my dental care, that's OK by me!" Anecdote is generally proof of little, but in this case I think it's proof enough that "Doesn't happen" isn't true.
5:05 p.m.
Dec 3, '10
"Anecdote is generally proof of little"
That's exactly right. Anecdotes prove little.
People hit the lottery all the time. That doesn't mean you will hit the lottery, or even that it's likely you will hit it.
6:24 p.m.
Dec 3, '10
The anecdote proved enough -- that your blithe and cocky claim that "The issue doesn't exist. Doesn't happen." is simply not true.
8:21 a.m.
Dec 4, '10
I wonder if he was a right-winger who was always ranting against "socialism."
7:51 p.m.
Dec 6, '10
He was just a young fellow looking to take advantage. College graduate, at that.
12:20 p.m.
Dec 4, '10
I don't believe your story. Many Oregonians already on the Oregon Health Plan can't get dental care. It's possible that the dental school at OHSU offers charity dental care to get practicum experience for trainees.
5:30 p.m.
Dec 4, '10
"I don't believe your story."
So are you calling me a liar, or telling me you think I might have been mistaken? I have related what he told me accurately if not verbatim, so "my story" is true. I had recently returned to Oregon from a few years in another state and wasn't up to date on the laws but was shocked by what he related.
1:48 p.m.
Dec 3, '10
Beat me to it. Was about to dig up my questions along those lines form the old thread on this topic.
11:50 a.m.
Dec 3, '10
To expand on M.P.'s question, how do you keep businesses from moving to Oregon to JUST get out of paying health care benefits for their employees? We could have lots of greedy companies that may be interested in bringing jobs here, so that they could be competitive with all the other industrialized countries that don't have an employer-based health care system. That would not be fair. We can't have that. That would be socialism.
12:25 p.m.
Dec 3, '10
You've got a point about the economic benefits of single payer for Oregon, but it's going to take more than sarcasm to address this argument.
The "freeloader" concern is a common one, especially when you toss in some good ol' immigrant bashing as well.
The thing to remember is that people seeking critical care are always going to get it by showing up at the ER, no matter what system we adopt. It's that way everywhere in the US and is an unavoidable expense.
The real "threat" is more along the lines of medical tourism like we see with people going to India for procedures. The best way I can see to deal with it is some sort of preexisting condition language tied to residency.
Keep in mind that any system we adopt should be capable of billing the insurance of out-of-state people, including medicare/medicaid. People with long-term disabling conditions who move here should already be covered federally.
1:56 p.m.
Dec 3, '10
Which is why those discussions need to occur and be addressed. I have been an advocate for single-payer for a long time (at the Federal level) but when implemented at a single-state only level (see above comment regarding Hawaii as not being analogous to Oregon) does raise different issues which would need to be thought out and addressed. Those issues certainly can be tackled, but those need to be part of any feasible single-payer system.
If funding were also in conjunction with and tied to Medicare grants from the Feds based on the amount paid into Medicare by Oregonians, it could also help insulate Oregon from funding crunches when economic downturns occur at either a state for national level in that the Federal government can, when needed, run at a deficit unlike the state.
6:40 p.m.
Dec 3, '10
In all seriousness, that could actually be a huge selling point for the plan. It's a three-fer--cut costs for existing Oregon employers (those who cover their employees, anyway, hint-hint); provide a big incentive for businesses to move to the state (or increase the size of their existing Oregon operations vs. those in other states); AND improve health care costs and outcomes generally.
I'd love to hear the GOP try to spin this as bad in a way that their allies in the business community couldn't see right through. ("Let's see... So this will reduce my costs, AND reduce out of pocket costs for my employees, AND give them better coverage, making it easier for me to recruit talent vs. out of state companies? Now, what, EXACTLY, did you say the downside was???)
8:02 p.m.
Dec 3, '10
the legislator conveniently leave sout that he would pay for this largess by raising income taxes on everyone, raising taxes even more on b usiness and even instituting a temporary high earners surtax to implement this largess.
Absolutely no business would move to Oregon for the dubious trade-off. As a matter of fact 3 companies announced yesterday that they are leaving/shutting down operations here in Oregon.
9:29 p.m.
Dec 3, '10
Can you name the 3 companies please.
So, if the increase in taxes is at or near what they currently pay in hc costs and the new system brings some degree of stability to hc costs, I am guessing business would be interested.
5:04 a.m.
Dec 4, '10
The 3 companies were listed in the oregonian Thursday afternoon.
Health insurance payments are currently a tax deductible expense for companies and small companies see a 35% additional incentive under Obamacare, highly unlikely that they would see an increased tax to avoid that subsidized costs a s a trade-off.
Also employee share of medical costs can be paid pre-tax saving almost 30% at the lower tax levels (15% fed, 7% state, 7.65% FICA/Medicare).
8:51 a.m.
Dec 4, '10
"The 3 companies were listed in the oregonian Thursday afternoon."
I couldn't find that story. Could you please either (a) name one or more of the companies leaving or (b) provide a link to the story? Thanks.
9:55 p.m.
Dec 3, '10
Let's see ... higher taxes at a predictable, fixed rate set by law, or unpredictably spiraling health insurance costs to cover employees and their families...
Somehow, being able to predict and control your future expenses doesn't seem like such a bad deal.
11:15 p.m.
Dec 3, '10
As a business owner, I'd be thrilled if my taxes went up some $3000/year per employee - and I wouldn't have to cover health care anymore.
(I have no idea if that's a real number -- surely not, since I just made it up. But it seems in the ballpark.)
5:05 a.m.
Dec 4, '10
See comment above, the cost would be much higher.
8:15 a.m.
Dec 4, '10
I don't think it would be much higher. We're paying roughly $3000/yr per employee for Kaiser's most feature-rich plan.
Remove marketing and profit margin, and it should go down from there. We are admittedly a young company, so average price may be higher for older workers, but I think that's the ballpark.
12:15 a.m.
Dec 5, '10
The total bill paid per citizen in the United States for healthcare is at least 1.5 times higher than in any other industrialized democracy in the world. The profit and overhead per premium dollar is $.30. Current practice by insurers used to negotiate rates for all things covered by their policy. These rates can be over 50% less than what the provider indicates the "rack rate" is.
Toyota opted to build a manufacturing plant in Canada instead of in the US because they could save so much per car by not having to purchase health insurance for each employee. A company the size of Toyota found that the higher tax rate in Canada still made it more profitable because of not having to buy health insurance.
Your reply below does not indicate that these companies left Oregon or changed their method of compensating employees for tax reasons. The latest statistics indicate that the cost of doing business in Oregon is still in the bottom 20% in the country.
9:22 p.m.
Dec 3, '10
Wait ... it's a bad thing to have companies move into the state to provide jobs and expand the economy?
My worry is that, in a state already burdened by budget issues, we'd be adding yet another cost. I support the concept, but I'd like to see some numbers crunched to determine how much this would cost/save the taxpayers, and what we'd be willing to cut to make this happen.
State organizations are already cutting services and forcing their employees to take unpaid time off in order to meet their budgets.
2:00 p.m.
Dec 3, '10
The way to make this happen is to make single payer a voluntary option-in rather than universally mandatory.
3:00 p.m.
Dec 3, '10
Then it isn't single-payer.
6:34 p.m.
Dec 3, '10
And young, healthy people won't sign up, so the plan ends up with mostly older, sicker people. That's why Federal HCR included the individual mandate.
Since most people who have coverage have it through employment, I think it might be better to offer the single-payer plan as an alternative to businesses (they could keep their private coverage, as long as it met certain minimum coverage standards), and offer sliding-scale subsidized coverage to everyone else, with a minimum-level, catastrophic-only coverage required for everyone. Since we know Medicare delivers better coverage for less cost (as does the Oregon health plan), the public plan would quickly kill off the private plans, leaving us with de-facto single payer, but without letting businesses dump their employees on the individual mandated market.
8:04 p.m.
Dec 3, '10
And public employees won't sign up taking about 150,000 or more out of the pool.
11:18 p.m.
Dec 3, '10
If you had a public option, the first thing you'd do - almost certainly - would be to move all public employees into it. Essentially, single-payer for public employees.
That'd be the fastest way to get up to scale quickly.
5:09 a.m.
Dec 4, '10
At the state level, public employees currently pay nada for their coverage. I'd like to listen in on that conversation with ASFCME and SEIU as you 'convince' them to take on an individual tax to support an inferior product they currently do not pay for.
8:05 a.m.
Dec 4, '10
"an inferior product"
Refers to facts not in evidence...
In fact, Medicare recipients routinely rate it very much superior to private insurance, while costs are lower and outcomes are better.
So, you're talking about a superior product for a lower cost. As long as who pays now doesn't change, no one has an excuse to get their panties in a twist (employers, employees, unions, etc.).
Keep in mind that out of pocket costs would drop like a rock--who wouldn't be willing to pay less every month AND getting rid of those $1,000, $2,000 or $5,000 annual deductibles?
8:21 a.m.
Dec 4, '10
The conversation would go something like this: "You've been trading away wage increases for years to protect your health benefits. Now, we're creating a public system for everyone, and you'll be able to expend your collective bargaining power on wage increases and working conditions."
Also: "Our new single payer system will add X new members to your union."
3:33 p.m.
Dec 7, '10
I am a public employee. I've been making contributions to my health insurance for years, now, under OEBB (Oregon Educators Benefit Board). My employer is asking for HUGE increases in what we pay. We have single moms hear who doubt whether or not they will be able to afford their health insurance. Don't tell me we pay nada. I'm sick and tired of the distortions and lies told about "public employees".
11:16 p.m.
Dec 3, '10
It would be a public option. Which is also a good thing.
10:43 a.m.
Dec 6, '10
Agreed. But my point was that what Bill was describing is not single-payer.
3:15 p.m.
Dec 3, '10
Oregon isn't the only state considering this. Vermont is another. If it succeeds then others will follow and the worry about people moving in just to take advantage of it would diminish.
4:53 p.m.
Dec 3, '10
There's a reasonable chance California will go single-payer in the next couple of years. Whether it sticks is an open question; I expect health insurance companies will get it referred to the ballot and run a billion-dollar campaign to kill it there.
Nevertheless, if California passes its plan, Oregon could then do single-payer with very little concern about people moving here for better care. Especially if Oregon were to design a system where the benefits were just a bit less generous than whatever California provides.
Or maybe Oregon could avoid reinventing the wheel and arrange for the whole state to buy into California's system after they've had a few years to get it up and running.
8:06 p.m.
Dec 3, '10
depending on the math, The People's Republik of Kalifornia is $29 Billion in the red. There will be no new health care plans featuring single payer arising out of the Golden Bear State.
11:01 p.m.
Dec 3, '10
The California legislature passed a single-payer bill in 2008, but it was vetoed by the Governator. That veto is the ONLY reason California doesn't have a single-payer plan today. With Jerry Brown taking office and with the Democrats two seats shy of a 2/3rds majority in both the State Assembly and the State Senate (or most likely will be after the two vacant seats in the Senate are filled), the legislature can pass single-payer any time they like. If Democrats pass it unanimously and can get a couple of Republicans in each house to join them, they can even fund it.
Yes, California has a revenue shortfall -- that only means single-payer doesn't need to take effect for a couple of years if it's a general fund obligation. Remember, under the sheer stupidity that is Prop 13, it takes a 2/3rds vote to raise revenue, but a simple majority (or a majority vote on a ballot measure) to commit the state to spend general fund money in the future. Of course, that kind of a setup is a recipe for total fiscal disaster. But it won't stop single-payer from passing if the California Legislature really wants it to happen.
7:36 p.m.
Dec 3, '10
I like that people are trying, but skyrocketing medical costs are what is making insurance unaffordable. I think that is where the discussion needs to be, not on funding.
That is doubly true with an evenly divided House.
11:21 p.m.
Dec 3, '10
Um, BJ, single-payer would mean eliminating insurance companies from the health care ecosystem.
All health care dollars would then go to health care providers - not insurance company bureaucracy, marketing expenses, and profit margins.
Single-payer is precisely a strategy for reducing skyrocketing medical costs. (Not a whole solution, but a great big one.)
8:54 a.m.
Dec 4, '10
How does a health insurer spending money on admin influence what a doctor charges for a procedure?
Reducing expenses gives a one-time benefit, but consider the scales. The federal reform limits most plans to no more than a 20% expense ratio. Let’s pretend single payer is free and the 20% goes away. Peg medical inflation at 7% and that chews up any benefit of the admin reduction within 4 years, than you’re back where you started.
You could argue that Medicare is an example of single payer reducing inflation, but Medicare uses explicit price controls. If that is what’s on the table then I’m all for it, but I haven’t seen that anywhere in the single payer discussions.
Focusing on cost controls or regulating provider pricing makes health care more affordable whether you go single payer or not. That is much less true the other way around.
10:50 a.m.
Dec 4, '10
As I understand it, the state would set the price for treatment and any doctor accepting a "state plan" patient would be paid what the state est.
1:31 p.m.
Dec 4, '10
T.A., I agree with everything in your first paragraph but I don't understand the second. A single payer plan certainly could include price regulation, but I don't see that anywhere in Dembrow's post or on the HCAO web site. What I see from the HCAO proposal under board responsibilities is:
"Approving rules that determine methods of compensation for providers; Approving negotiated contracts for services provided by health care facilities"
Any insurance company could say they do that. If someone from HCAO wants to say they intend to regulate provider prices I'll believe them, but I wouldn't conclude that from the proposal as is. Count how many paragraphs are devoted to coverage and benefits vs. the partial sentence that could be construed as cost control and you'll see why I'm skeptical.
Cost control isn't an oh-by-the-way issue, it belongs at the core of the proposal.
11:07 a.m.
Dec 4, '10
doctors & hospitals are over-testing patients, buying expensive equipment they don't need and billing for these costs -- including their profit margins. take away that final aspect, and hospitals will dump they stuff they don't need. they'll specialize in the non-emergency stuff, which means only one need have a super-specialized machine, and another will have a different one. expensive tests will be done as needed, not as an option to make more money.
single-payer will produce a more market-like health care system by forcing caregivers to compete on the basis of "product" (health) and not the monopoly of an insurance plan.
12:26 p.m.
Dec 4, '10
I am also for single payer but the political transition to it may necessitate a public option that out-competes the corporate sector. I note above that United Health Care is requesting a 16.8% increase. Competing against that kind of highway robbery shouldn't be difficult.
12:05 p.m.
Dec 4, '10
This is for Bruce Miller. Sorry but the reply function isn't working well today so I am posting down here to your question.
The story ran December 2, 2010 and was authored by James Mayer, Liberty Homes, ZipRealty and bioMerieux to slash 214 Oregon Jobs. The particulars are:
4:50 p.m.
Dec 4, '10
9:01 a.m.
Dec 6, '10
Michael, Does that mean the company then avoids employment taxes using this strategy?
12:03 p.m.
Dec 6, '10
Yes, but this is the only real estate company I have ever heard of that treated agents as employees. Every other firm I know of has always treated them as IC's.
The agents will now be on a commission system and will have to pay all FICA just like all self-employed workers due.
10:26 a.m.
Dec 6, '10
Wow. That works out nicely for Zip. Contractors are not due any healthcare consideration at all.
This of course demonstrates the weirdness and peril of a healthcare system that was only accidentally tied to employment post WWII as large corps began offering it as part of a benefits package to attract and keep skilled workers.
12:05 p.m.
Dec 6, '10
The agents will move to a commission system where some will make less $$ and others will make significantly more $$.
Have RE agents as employees is very unusual.
11:02 a.m.
Dec 6, '10
The layoffs are due to bioMérieux discontininung the production of culture media products for clinical labs in North America.
So this relates to Oregon raising income taxes on everyone, raising taxes even more on business and even instituting a temporary high earners surtax how exactly?
Oh yeah, that's right, it doesn't.
9:34 a.m.
Dec 6, '10
The present economics of health services delivery are clearly not sustainable. American companies cannot compete in a global economy when they are shouldering the burden of employment based health insurance. The inordinately affluent incomes of the physicians, specialists, medical administrators, and other health care companies and their CEOs are also not sustainable. The laws of supply and demand in a profit based system of health care delivery are not supportable in a civilized moral world. The GOP solution is rationing by price. And that is not sustainable politically. What we are headed for is a two tier health care system. Cadillac health insurance for the wealthy and a single payer for the middle and low income members of our communities. It is a world where most health care providers join the middle class and learn to live the way the rest of us live, instead of making six and seven figure salaries, and Wall St. and Corporate CEOs no longer prey on the health needs of Americans. Health care will become a public utililty for the middle class.
3:54 p.m.
Dec 7, '10
I'm currently unemployed. PCC let me go, just as I was qualifying for health insurance but neglected to tell me, so I never got any unemployment compensation. The Multnomah County Health department will see me and tells me I need to see an audiologist, but I need insurance for that. Single payer would make everything so much less complicated and frightening.
7:14 p.m.
Dec 10, '10
@Kurt It doesn't say they are leaving Oregon because of single payer... Single payer would decrease a company's insurance costs which would increase profits, so that would be a reason for them to stay.
The downturn in housing sales, loss of customer base, and more than likely tax incentives are the reason for the closings. Companies don't just close down and more because they anticipatge a change in policy that might affect them... They'd be moving all of the time if they did.
7:16 p.m.
Dec 10, '10
Sorry won't let me post a reply directly to the a person's comment for some reason...
7:25 p.m.
Dec 10, '10
Rising medical costs are in a large part because insurance companies only pay a small percentage of the bill so the costs & bill padding are increased so the medical providers can get paid what they think the services provided should cost not what/the percentage the insurance companies negotiate. How is it fair insurance companies only pay such a small opercentage when everyone else has to pay the full inflated price??? WHat happened to equal treatment under the law??? The reason we need single payer!!!
4:53 p.m.
Jan 24, '11
I am also for single payer but the political transition to it may necessitate a public option that out-competes the corporate sector. I note above that United Health Care is requesting a 16.8% increase. Competing against that kind of highway car shipping shouldn't be difficult.