Challenges and Solutions for State Single Payer Legislation David Ball, PNHP South Carolina and Dave Sterrett, Public Citizen

1-Step or 2-Step Strategy Your single payer legislative package will eventually need a substantive piece and a financing or tax piece. You need to think very strategically about whether you want to include both pieces in one bill or split them up. States with the ability to revisit the issue (VT, NY) will probably want to pass the tax bill separately as it is the least palatable part of the legislation. States that will probably only get one bite at the apple need to go for everything at once. Either way you’ll probably want to delay implementation of the taxes until after people experience benefits 2

Defining Benefits Each state has to decide how specifically they want the legislature to define benefits. Some legislatures may want to describe covered benefits at a very detailed level. Other bills may want to set up a panel of experts to come up with the covered benefits. As an example, Obamacare used 10 broad categories of coverage: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive and wellness services, and pediatric services. 3

Financing Your Legislation Even though your legislation will save a lot of money for the overall health care system you will still need raise revenue to fund it. The most often used approach is a combination of a payroll tax on employees and employers that would take the place of premium payments. Other options include: property tax, sales tax, inheritance tax, sin tax (alcohol, tobacco). The real cost saver for businesses is to cap the rate of the tax increase at the rate of inflation, which is much lower than traditional premium increases. 4

Treatment of Undocumented There are differing opinions over whether undocumented workers should be covered by single payer bills. Some concerns are the added expense and the political difficulty of covering this population. On the other side are those that feel that justice requires this coverage and that it will be beneficial for the overall risk pool. These delicate issues are for each state to decide. We just wanted to raise the issue so it was a part of the planning process. 5

Medicare Advantage Medicare will still be a large payer in your state once you move towards a single payer system. To further to take advantage of efficiencies you may want to consider having your state apply to be a Medicare Advantage Provider. Being a MA provider would enable a state to include more beneficiaries into their risk pool, reduce overall administrative costs, and reduce provider fees throughout the system. 6