Single-payer savings

The surprising success this week of a single-payer health care plan in the Maine House arrived just as a report from U.S. Rep. Tom Allen pointed out that average Maine health costs in traditional fee-for-service plans increased 78 percent in the last five years, 60 percent for HMOs. The single-payer bill may be partly the result of enough people desperate for an alternative to the current financially crushing and partly the result of a smart approach to writing the bill.

Introduced by Rep. Paul Volenik of Brooklin, LD 1277 would establish a single-payer plan open to all residents and based on the range of services offered under Medicaid, with no deductions and limited co-payments. Residents would choose their private health care provider. The plan, initially anyway, would be supplemental to other coverage. The plan’s cost is enormous; the cost of not doing it, even larger.

The House vote of 80-58 confirmed what many residents believe – that the rapidly rising costs in health care are not supportable by individuals or businesses, demands for services make HMOs ineffective at reducing costs and the endless paperwork by everyone involved in processing claims is an expensive waste. All this, yet despite having the world’s priciest health-care system, the United States still leaves 40 million people (165,000 in Maine) uninsured and with inadequate health care.

Many alternatives to providing coverage have been debated, but the single-payer system consistently emerges as the most attractive – it is simple for patients and providers, it takes the burden off business and places it on the larger society, where it belongs, and its costs are transparent – that is, it is easy to see where rapid price increases are affecting the system. Maine lawmakers supported the proposal acutely aware that the key to avoiding the problems that emerged in the single-payer system in Canada is to ensure adequate funding is available to meet demand.

But on the question of funding sources and many others, the bill is properly vague. Unlike previous attempts to pass a single-payer plan, LD 1277 establishes a framework of a 25-member Health Security Board to establish the program, a phase-in time, a direction to obtain federal waivers and a general description of funding sources. After that, the board, through extensive public debate, is charged with figuring out how the system would work.

This would be a long, complex process – just getting the federal waivers could take a couple of years, but it avoids the traps that earlier proposals fell into. Their details were picked apart by interest groups until the bills died. The benefit of LD 1277 is that is sets up a formal process for moving Maine toward single-payer, then looks at the issues in the way of getting there. If they can be overcome, Maine can put the plan in place.

The largest issue, of course, is cost. The Bureau of Insurance estimated that the total state and federal cost for the proposal at $5.1 billion, although there is a good argument to be made that its estimated per-person cost of $5,800, based on Medicaid expenditures, is too high because Medicaid serves a sicker population than the general public. But even accepting the $5.1 billion, the amount Maine will spend on health care this year, based on the King administration’s Blue Ribbon Health Care Commission findings for 1999 plus medical inflation, is $5.4 billion. That means the single-payer system would save an estimated $300 million while also covering the 165,000 uninsured. It is an impressive result.

(Another benefit: The bureau includes in its estimate an additional 10,000 people being attracted to Maine to take advantage of the health care plan. Given that Maine is among the slowest growing states in the country – with businesses hungry for workers – it is an attraction that northern Maine in particular should support.)

As the Senate considers LD 1277, all its members need to do is call small businesses in their districts and ask those who supply their employees with health insurance whether the cost is a serious burden. Maine has at least the start of a way to lower costs and keep them under control. The bill deserves the Senate’s support.