Single Payer vs. Expanding the ACA
Single payer covers everyone with the same health plan, eliminates private insurance, sets reimbursement rates for hospitals, doctors and prescription drugs and costs a lot in new taxes. It’s like the Canadian system.
· Everyone means all citizens, all legal residents and all the undocumented.
· Same health plan means a single government health plan for everyone with the same benefits, same doctors, same hospitals, same nursing homes and same pharmacies.
· Private insurance is eliminated; this includes the for profit health plans like Aetna or Unted, the non-profit health plans like Blue Shield, the non-profit HMO’s like Kaiser and the public plans like LA Care or San Francisco Health Plan. Instead, the government pays the bills. It eliminates employer sponsored coverage, union sponsored coverage, and individually purchased coverage.
· The government sets fee for service reimbursement rates for all participating providers, including doctors, hospitals, prescription drugs. This is the same as Medicare and Medicaid already do for all fee for service providers. This eliminates capitated rates, negotiated rates, and provider’s ability to charge patients anything more than the government set rate for the service in question.
· It replaces employer contributions, employee contributions, individual premiums and patient out of pocket deductibles, copayments and co-insurance. These would be paid through taxes instead, probably on businesses and on individuals. In addition, a state single payor system has to be designed to capture all the existing federal government spending on Medicare, Medicaid, VA, Indian Health Services and a variety of other federal programs – not a small task unless Congress and the President are willing to enable these transfers. The new taxes and the other program and revenue shifts would need a 2/3rds vote in the California legislature and 60 votes in the US Senate plus a majority in the House in addition to a Governor’s signature and a President’s signature as well. They are large, and the reductions in payments for private insurance and for out of pocket medical expenses are equally large. Some version of this may be the best approach for controlling health spending over the long term.
· A state would need to decide whether to cover dental and vision services, long term care in institutions like nursing homes and in the patient’s home and other community settings.
· This approach is heavily opposed by providers, insurers, business and parts of labor, and it is strongly supported by nurses, the rest of labor, some small businesses, and most consumer groups.
The Affordable Care Act (ObamaCare) was enacted in 2010 and implemented in 2014. It sought to cover all Americans, cover more services, reform a series of noxious insurance practices prevalent in the individual and small business markets, reform the payment, delivery and reimbursement systems to improve quality and affordability, and slow the growth in health costs.w
· It covered the uninsured by expanding Medicaid to all citizens and legal permanent residents with low incomes, and by subsidizing individual insurance purchased through the Exchanges for middle- and moderate-income individuals and families with refundable tax credits. It required everyone to enroll or pay a small fee.
California’s numbers of uninsured have fallen from about 7 million to about 2 million. Massachusetts leads the nation (about 2% uninsured); Texas is at the absolute bottom (over 16% uninsured), as it has not expanded Medicaid to the working poor. https://www.americashealthrankings.org/explore/measures/HealthInsurance
o The US Supreme Court ruled that the ACA’s Medicaid expansion was optional with the states. Ten states primarily in the deep South have still not implemented the Medicaid expansion for their own working poor. https://www.kff.org/medicaid/status-of-state-medicaid-expansion-decisions/ This is likely part of a toxic residue from slavery, Jim Crow segregation and deep-rooted antediluvian attitudes as it makes no fiscal sense at all and is terrible public policy to leave your poorest citizens with no access to affordable health coverage and health care.
o It helped middle- and moderate-income subscribers pay for their choice of individual coverage with refundable tax credits through federal or state purchasing pools that negotiated rates with participating insurers. The Biden Administration increased the tax credits and expanded those eligible to use them to more of the middle class (enhanced premium assistance). https://publichealth.jhu.edu/2025/bidens-public-health-wins and https://www.presidency.ucsb.edu/documents/fact-sheet-biden-harris-administration-announces-record-breaking-2025-open-enrollment
The Trump Administration and the GOP eliminated that enhanced premium assistance this year; that action both increased the underlying premiums and reduced subscribers’ ability to afford them quite dramatically. The impacts have been spiraling premiums, more Americans uninsured and less health care coverage for those who retained coverage. https://www.kff.org/public-opinion/a-follow-up-survey-of-aca-marketplace-enrollees/
o The ACA required employers of 50 or more full time employees to offer affordable coverage to their full-time employees. https://www.kff.org/affordable-care-act/employer-responsibility-under-the-affordable-care-act/ The impacts of this provision on employment and job creation have been marginal to non-existent, in part because so many large and mid-sized employers already offered coverage to many employees. https://www.brookings.edu/articles/employment-impacts-of-the-affordable-care-act/
o The ACA required individuals to enroll in one of the many forms of available coverage – Medicare, Medicaid, employment-based and individual coverage – or pay a small fee, unless the costs of the coverage was unaffordable. This provision, which had originated with the Heritage Foundation and had been successfully adopted by the Romney Administration in Massachusetts, was highly controversial, especially with Republicans, and it was repealed during the first Trump Administration. https://www.kff.org/health-costs/how-repeal-of-the-individual-mandate-and-expansion-of-loosely-regulated-plans-are-affecting-2019-premiums/ The repeal increased the rates of uninsurance and increased premiums due to the higher risk profile of those continuing to purchase coverage in the absence of the mandate. https://pmc.ncbi.nlm.nih.gov/articles/PMC8886708/ Several states, including Massachusetts and California, have their own individual mandates. https://workforce.equifax.com/all-blogs/-/post/what-do-individual-healthcare-mandates-look-like-in-your-state
o The ACA did not cover undocumented workers and undocumented family members. California and some other states do so in part. https://www.kff.org/racial-equity-and-health-policy/state-health-coverage-for-immigrants-and-implications-for-health-coverage-and-care/ The Trump Administration is doing everything possible to deport undocumented workers, detain them and make their lives as difficult as possible. https://www.cfr.org/articles/ice-and-deportations-how-trump-reshaping-immigration-enforcement
· The ACA eliminated a series of particularly noxious insurance underwriting practices designed to exclude those with pre-existing medical conditions or those who insurers thought might develop them. https://www.insurance.ca.gov/01-consumers/110-health/10-basics/aca.cfm and https://pmc.ncbi.nlm.nih.gov/articles/PMC4714719/
o Policies for individuals and small businesses must be guaranteed issue, guaranteed renewal regardless of medical conditions, with premium variations permitted only for age, geography and family size.
o Those who allow their coverage to lapse may be exposed to a pre-existing exclusion of 6 months before they can re-enroll.
o There are minimum loss ratios requiring that insurers spend at least 85% of medium and large employer insurance premiums on medical care, and 80% of individual and small employer premiums on medical care. These could and should be higher.
· The ACA required that all health plans cover 10 essential health benefits. https://www.healthcare.gov/glossary/essential-health-benefits/ These include hospitals and doctors, maternity and mental health, preventive and rehabilitative, prescriptions and pediatric, including children’s dental care. The preventive care package is particularly important, as many preventive services (like immunizations or prenatal care) are not subject to copays and deductibles. https://www.healthcare.gov/coverage/preventive-care-benefits/
o It limited copays and deductibles and total patient out of pocket liabilities -- $10,600 for individual (self-only) coverage and $21,200 for family coverage. Subscribers can choose from plans offering 60%, 70%, 80% or 90% coverage.
o Young adults can choose catastrophic coverage (copper plans) which cover only 50% of expected medical costs but the monthly premiums are a good bit lower.
o Cost sharing reductions that can be quite substantial are available to moderate income subscribers so they can better afford to access the covered services. The Trump Administration eliminated funding for the cost sharing reductions; however all but a few states allowed carriers to develop a workaround that counteracted the Trump funding cut and protected their subscribers. https://pmc.ncbi.nlm.nih.gov/articles/PMC11116663/
· The ACA reformed the payment and delivery systems as a part of efforts to improve the quality and affordability of care and coverage. https://www.commonwealthfund.org/publications/2022/apr/impact-payment-and-delivery-system-reforms-affordable-care-act
o It sought to reduce unnecessary hospital readmissions, hospital acquired infections, and improved clinical outcomes.
o It sought to organize and incentivize provider networks to improve health outcomes and reduce costs of care for the chronically ill.
o It provided bundled payments for episodes of care to improve patient outcomes, particularly from surgeries.
o It sought to increase payments for primary care with incentives to improve the quality and outcomes of primary care services, particularly for high cost, medically fragile patients.
o It consolidated the payment and care delivery systems for those dually eligible for both Medicare and Medicaid.
o The ACA also put some caps and constraints on the spending growth of Medicare and “Cadillac” benefit plans. These were repealed duringc the first Trump Administration.
· The two big advantages of building off the existing systems of coverage, as the ACA did, are: 1) it is more acceptable to those with existing coverage who fear its loss, and 2) you do not need to replace the existing financing streams from employers for private insurance (that cover somewhat less than 50% of Californians and make up 30% of the financing of our health coverage) with new taxes.
· See https://lao.ca.gov/Publications/Report/5180 and https://www.kff.org/health-costs/2025-california-health-benefits-survey/ for the current landscape and our challenges here in California.