• What do we mean by “single payer”?

    Aaron’s post this morning prompted some back-and-forth emails between the two of us over what he and I mean by single payer. He called Medicare “single payer.” I disagreed because there are many plans (FFS Medicare + Medicare Advantage, not to mention Part D and supplements) so providers are paid by multiple payers.

    But Aaron had a point that, supplements aside, all of Medicare is predominantly taxpayer financed, which is also a characteristic of single payer. (Actually, even including supplements, I believe claims are predominantly taxpayer financed, but I don’t have the figures to prove it.) In contrast, according to the CBO and as Aaron posted, Rep. Paul Ryan’s vision for Medicare would lead to a program that was not predominantly taxpayer financed. In time, beneficiaries would pay the lion’s share of premiums.

    So, what are all the things we mean by “single payer” and to what extent is today’s Medicare “single payer”? To what extent is Rep. Ryan’s vision? My list:

    • Single payer as (largely) tax-financed benefits. Today’s Medicare: yes. Rep. Ryan’s vision: no.
    • Single payer as one source of payment for providers. Today’s Medicare: no. Rep. Ryan’s vision: even more “no” if FFS Medicare loses popularity, which is what I would expect.
    • Single payer as one set of benefits and prices, nationally, for beneficiaries. Today’s Medicare: no, but yes for FFS. Ryan’s vision: no, and less so if FFS enrollment dwindles.

    What else?


    • Doesn’t single payer mean one plan, not where the financing comes from? And anyway, benes play upwards of 30 percent of Medicare costs when you count both premiums and all costsharing.

    • I agree with most of what you’ve written, except that Medicare FFS today is one set of prices.

      Prices are adjusted geographically, include a variety of exceptions for certain types of providers, and payment depends heavily upon the setting in which the procedure is performed.

      I would also argue that the future of Medicare FFS is distinctly shifting away from one set of prices due to VBP, P4P, etc. It is too early to tell whether providers across the country will be subject to the same level of VBP or whether these programs will cause a shift in setting of care of certain procedures.

      • True, but I wrote, “one set of benefits and prices, nationally, for beneficiaries.” What I meant was there is one premium and cost sharing schedule. In truth, premiums vary by income, but not by market, which was my point. (I could have been clearer.)

    • Two thoughts.

      One definitions matter so much here. And I’m delighted to see you take on this task. I hope your site becomes a good source for definitions along these lines.

      Two I think of single-payer as a single plan that is paid for from one entity. The variations can get added along to that (there are small co-pays, reinforcements vary, some services are added if in a certain region for geographic reasons, etc.). But the foundation upon which all else is built is a single plan from a single payer. I’m not clear how thematically Medicare isn’t that. Yes there are other payees but that’s in a sense the foundation or so I thought.

    • To me to truly be single payer, a system must have a lot of monopsony meaning that they can set prices in a large range. So by my definition Medicare is not single payer.

    • I’d define single payer almost exclusively by it’s funding source: Unlike regular insurance it is not funded by premiums which on some level are connected to risk. A corollary is that participation can’t be voluntary if risks vary, else someone would exploit the arbitrage of separating out the lower risk population and offering equivalent service at lower cost.