ADEA State Update

Single-payer Model Being Considered by States as Alternative to Current Health Care System

(State Policy, Insurance, Medicare and Medicaid, Medicare and Medicaid Services, Dental Health, Medicaid Expansion, Oral Health) Permanent link   All Posts

SinglePayerSignThe State Legislatures in California and New York are debating legislation designed to create single-payer systems in their respective states. Under a single-payer system, all residents of that state would be covered for all medically necessary services, including doctor, hospital, preventive care, dental, vision, prescription drug, long-term care, mental health, reproductive health care and medical supply costs.


S.B. 562, titled the Healthy California Act, would create the Healthy California program to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of California. The bill, among other things, would provide that the program cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including but not limited to the state’s Children’s Health Insurance Program (CHIP), Medi-Cal and the Medicare program. This bill would also create the Healthy California Board, made up of nine members with demonstrated expertise in health care, to govern the program.

The legislative bill analysis estimates the total annual costs of the Healthy California program to be about $400 billion per year, including all covered health care services and administrative costs, at full enrollment.[1] Existing federal, state and local funding of about $200 billion could be available to offset a portion of the total program cost. Finally, approximately $200 billion in additional tax revenues would be needed to pay for the remainder of the total program cost.

Specifically, the proposed law would make the following changes to the health care system in California (this list is not exhaustive):

  • Make every resident of California eligible for the Healthy California program.
  • Prohibit any cost sharing for enrollees such as premiums, copayments or deductibles.
  • Require coverage for “all medical care determined to be medically appropriate by the member’s health care provider.”
  • Require coverage for all health care services covered by Medi-Cal, Medicare, health plans regulated under the Knox-Keene Act and the essential health benefits mandated in the Affordable Care Act.
  • Authorize any licensed health care provider to provide services to a member.
  • Authorize members to receive health care services from any willing provider, without needing a referral from a primary care provider or a care coordinator.
  • Require payments to providers to be made on a fee-for-service basis unless other payment methodologies are developed by the Healthy California Board (Board).
  • Require all payments to be reasonable and reasonably related to the cost of providing health care services and ensure an adequate supply of services.
  • Require the Board to apply to the federal government for permission to include the participants and funding streams for Medicare, Medi-Cal and Covered California in the program.

SB 562 passed the full Senate on June 1 and has been sent to the Assembly for further consideration.

New York

A. 4738 and companion bill S. 04840 establish the New York Health program, a comprehensive system of access to health insurance for New York state residents.

The proposed law would make the following specific changes to the health care system in New York (this list is not exhaustive):

  • Make every resident of New York eligible for the New York Health program.
  • Prohibit any cost sharing for enrollees, such as premiums, copayments or deductibles.
  • A college, university or other institution of higher education in the state may purchase coverage under the program for any student, or students’ dependent, who is not a resident of the state.
  • Require coverage for all health care services covered by Child Health Plus, Medicaid and Medicare.
  • Establish a broadly representative Board of Trustees of the New York Health (Board) program to advise the Commissioner of Health.
  • Require that the Board develop a plan for long-term care coverage within two years of the law’s passage.
  • Establish six regional advisory councils to represent the diverse needs and concerns of the region. The councils must include but not be limited to representatives of health care consumers, providers, municipal and county government and organized labor. The councils will advise the Board, Commissioner, Governor and Legislature on matters relating to the New York Health program and must adopt community health improvement plans to promote health care access and quality in their regions.

According to the press release issued by Assembly Speaker Carl Heastie (D-NY), “[b]enefits would include comprehensive inpatient and outpatient care, primary and preventative care, prescription drugs, behavioral health services, laboratory testing and rehabilitative care, as well as dental, vision and hearing care.” 

Funding for the program would be based on a shared 80/20 employer/employee contribution system.[2] Additionally, state funding would be combined with federal funds that are currently received for Medicare, Medicaid and Child Health Plus to create the New York Health Trust Fund. The state would also seek federal waivers that will allow New York to completely fold those programs into New York Health. The local share of Medicaid funding would end, offering property tax relief for New Yorkers.

[1] Note: The fiscal estimates made in the legislative analysis are subject to enormous uncertainty. Completely rebuilding the California health care system from a multi-payer system into a single-payer, fee-for-service system would be an unprecedented change in a large health care market. There are numerous uncertainties about how enrollees, providers, employers, and the state would adapt to such a system.

[2] New York Health would be paid for based on ability to pay, through a progressively graduated payroll-based premium (paid at least 80% by employers and not more than 20% by employees, and 100% by self-employed) and a progressively graduated premium based on other taxable income, such as capital gains, interest and dividends.

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