Paduda: Single-Payer Health Insurance and Employees’ Comp| Employees Compensation News

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By Joe Paduda

Friday, June 17, 2022
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Recently, the National Council on Compensation Insurance’s Laura Kersey penned a bit about key legislative trends, one in every of which was single-payer medical health insurance. Good research work.

Joe Paduda

First, let’s define “single payer.” By definition, it’s government-financed and government-managed medical health insurance. (Kersey focused on state efforts; for reasons I’ll discuss below, states CANNOT have a single payer).

Single payer is a catch-all term for universal medical health insurance coverage. In some cases, there isn’t a single payer in a whole nation. Our neighbor to the north is one example; Switzerland and Germany are two others.

In Canada, each province is its own single payer; within the two European countries, there are a number of independent corporations that provide health coverage. Taiwan has one payer for all residents.

There are a LOT of various versions of single payer; a discussion is here. Just about every country with single payer is exclusive, each with its own nuances.

For instance:

  • Most don’t have government-employed health care providers. In lots of single-payer systems, physicians, therapists, hospitals and other providers are private.
  • The UK is an exception; providers are (mostly) employed by the federal government.
  • Many will not be government-operated. In lots of systems, private insurers contract with the federal government to handle the administration of medical health insurance, just like our Medicare.
  • Again, the U.K. is an exception.

Typically:

  • The federal government sets pricing/reimbursement policy and actual prices, just like Medicare.
  • Funding comes from some combination of worker, employer and other taxes. In some countries, insureds pay some type of premiums, just like Medicare.
  • It covers everyone.
  • There may be little to no paperwork for patients/consumers; all that’s handled by the executive agency.
  • There are minimal or no deductibles, co-pays, or co-insurance requirements.
  • People can purchase supplemental insurance through private insurers.

Kersey’s article notes that several states have pending or tabled laws related to single payer.

A key issue here is a really large chunk of spend in each state — as in, greater than half — comes from the feds. Thus, unless a state gets waivers from the feds (which is able to never occur) exempting Medicare and Medicaid from that state’s single-payer program, many of the medical dollars aren’t going to be in that state’s program.

I suggest that how single payer would affect comp is dependent upon two core issues:

  • Whether take care of occupational injuries/illnesses is roofed by single payer.
  • Whether there may be a universal fee schedule.

If WC care is included under single payer, it is probably going that work comp would evolve to an indemnity-only system. This exists in several other countries and seems to work pretty much.

If WC medical care is NOT included in single payer, the impact can be driven largely by the presence — or absence — of a universal fee schedule. 

Without that universal fee schedule, providers would likely proceed to do their revenue maximization thing, although they’d supercharge those efforts. Why? Because reimbursement from all other payers would drop significantly, and providers would look to comp to exchange as much of that lost income as possible.

What does this mean for you?

There won’t ever be a state-based or state-specific single-payer program.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in staff’ compensation. This column is republished together with his permission from his Managed Care Matters blog.

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