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Jun
15

Single Payer health insurance and worker’s comp

A couple days ago NCCI’s Laura Kersey penned a piece about key legislative trends, one of which was Single-Payer health insurance. Good research work.

First, let’s define “single payer”. “Single Payer” – by definition – is government-financed and government-managed health insurance. (note Ms 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 health insurance coverage. In some cases there isn’t a “single payer” in an entire nation – our neighbor to the north being one example, Switzerland and Germany are two others. In Canada, each Province is it’s own single payer; in the two European countries there are a variety of independent companies that provide health coverage. Taiwan has one payer for all residents.

There are a LOT of different versions of “single payer”; a discussion is here. Pretty much every country with Single Payer is unique, each with its own nuances. For example,

  • most don’t have government-employed healthcare providers; in many single payer systems, physicians, therapists, hospitals and other providers are private.
    • The UK is an exception; providers are (mostly) employed by the government
  • many are not government-operated; in many systems private insurers contract with the government to handle administration of health insurance – similar to our Medicare
    • Again the UK is an exception

Typically:

  • the government sets pricing/reimbursement policy and actual prices – similar to our Medicare
  • funding comes from some combination of employee, employer, and other taxes; in some countries, insureds pay some form of premiums – similar to our Medicare
  • it covers everyone
  • there is little to no paperwork for patients/consumers; all that is handled by the administrative agency
  • there are minimal or no deductibles, copays, or co-insurance requirements
  • people can buy into supplemental insurance through private insurers

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

A key issue here is a very large chunk of spend in each state – as in more than half – comes from the Feds. Thus, unless a state gets waivers from the Feds (which will never happen) exempting Medicare and Medicaid from that state’s Single Payer program, most of the medical dollars aren’t going to be in that state’s program.

I’d suggest how Single Payer would affect comp depends on two core issues:

  • whether care for occupational injuries/illnesses is covered by Single Payer, and
  • whether there is a universal fee schedule.

If WC care is included under Single Payer, it is likely work comp would evolve to an indemnity-only system. This currently exists in several other countries, and seems to work pretty well.

If WC medical care is NOT included in Single Payer, the impact would be driven largely by the presence – or absence – of a universal fee schedule. 

Without that universal fee schedule, providers would likely continue 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 replace as much of that lost income as possible.

What does this mean for you?

There will NEVER BE A STATE-BASED OR STATE-SPECIFIC SINGLE PAYER PROGRAM.


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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