trending Market Intelligence /marketintelligence/en/news-insights/trending/_ARegqoqRvA3G2KoUxGipA2 content esgSubNav
In This List

Single-payer gains more steam, but Democrats remain divided at 2nd hearing


Essential IR Insights Newsletter Fall - 2023

Case Study

A Corporation Clearly Pinpoints Activist Investor Activity


Insight Weekly: Bank mergers of equals return; energy tops S&P 500; green bond sales to rise


Insight Weekly: US companies boost liquidity; auto insurers hike rates; office sector risk rises

Single-payer gains more steam, but Democrats remain divided at 2nd hearing

The idea of the U.S. adopting a single-payer healthcare system got its second vetting on Capitol Hill in less than a month, though unlike the first round when lawmakers heard from a slew of witnesses, only congressional analysts testified at the latest House hearing.

Republicans at the May 22 hearing of the House Budget Committee remained staunchly opposed to a single-payer Medicare for All approach to healthcare. And while a number of Democrats expressed support, not everyone in the party was on board, though a House measure has gained more steam.

Rep. Lloyd Doggett, D-Texas, chairman of the Ways and Means Health Subcommittee, was the latest to sign on as a co-sponsor to a Medicare for All bill from Reps. Pramila Jayapal, D-Wash., and Debbie Dingell, D-Mich.

Doggett, who is the 109th Democrat to sign on to the Jayapal-Dingell bill, noted that the legislation has fully incorporated his measure that seeks to let the Medicare program for seniors and disabled Americans negotiate directly with drugmakers on prices.

He criticized Republicans for not coming up with a viable alternative to Medicare for All or the Affordable Care Act — a law the party has been trying to dismantle since it was enacted in 2010.

"Today's naysayers don't have any plan at all," Doggett said. "What do we have? Republican nothingcare."

He noted that President Donald Trump has repeatedly promised to cover all Americans with a "big beautiful healthcare plan," but has most recently said he would not put a proposal forward until after the 2020 election, if he wins, and if the Republicans retake the House.

Multiple approaches

Doggett, however, also has lent his support to other bills that take an incremental approach to getting to universal healthcare, like the Medicare for America Act from Reps. Rosa DeLauro, D-Conn., and Jan Schakowsky, D-Ill., which would build on the existing U.S. healthcare system, while trying to improve and expand the benefits Americans currently have through their public or private insurance.

The DeLauro-Schakowsky legislation would offer all Americans the opportunity to join Medicare. Employers also could buy into the Medicare program for their employees under the bill.

Schakowsky also said she supports multiple strategies to get to universal coverage.

"I am on every bill to improve healthcare," she said at the May 22 hearing. "I've been for Medicare for All since many of you have been born."

Schakowsky noted that while she helped write the ACA, she supports improving it.

"We need a bold plan," she said.

Schakowsky condemned the Republicans for calling Medicare for All "socialism."

She noted that before Ronald Reagan became president in 1981, he was one of the Republican Party's key lobbyists in the 1960s who tried to convince lawmakers that Medicare was a socialist idea when it was first proposed before being adopted in 1965.

"Be careful of your slams against socialism," Schakowsky said. "People want to have healthcare in the United States of America."

Cost a key factor

A key question looming at the May 22 hearing went unanswered by the Congressional Budget Office: How much would moving to a single-payer system cost Americans?

One analysis, brought forward by Charles Blahous, chair and senior research strategist at George Mason University's Mercatus Center, put that cost at $32.6 trillion over 10 years.

Blahous originally predicted that amount in a July 2018 report, which he discussed at an April 30 hearing convened by the House Rules Committee — the first time single-payer was discussed during the current Congress.

That hearing specifically examined the Jayapal-Dingell bill, whereas the May 22 session looked at single-payer in general.

CBO officials said they have not yet put an estimate on the cost of a single-payer system, nor have the congressional analysts provided a score for any specific legislation, including the Jayapal-Dingell bill.

But that is because the CBO has not yet been asked to calculate the costs, Mark Hadley, deputy director at the agency, told lawmakers.

House Budget Committee Chairman John Yarmuth, D-Ky., noted that he had instead asked the CBO to analyze the design components and considerations that policymakers would confront in establishing a single-payer healthcare system.

Hadley reiterated what the CBO reported on May 1: Moving to a single-payer system would be a major undertaking and would involve significant changes for all participants — individuals, providers, insurers, employers and drug and device manufacturers.

Such a transition would be complicated, challenging and potentially disruptive, Hadley said.

The U.S. economy also could be significantly affected, given healthcare makes up one-sixth of it, he added.

Hadley noted the U.S. spends about $3.5 trillion annually on healthcare and adopting a single-payer system could result in lower administrative costs.

Impacts to quality of care, innovation

While Hadley said a single-payer system could achieve universal healthcare, he said the CBO was not able to gauge the impact on quality, saying that outcome would depend on how the system was set up and if there were a sufficient number of providers.

But he said a single-payer system may have a greater incentive to invest in measures aimed at improving Americans' health and in preventive services.

If the supply of services was not sufficient to meet the demand for care, patients may face increased wait times and reduced access to care, Hadley added.

Pressed on whether innovation for drugs and devices could be harmed, the CBO official acknowledged all sectors would be impacted, but said compensation for their products would depend on their effectiveness.

If the prices paid in U.S. for drugs end up being substantially lower, manufacturers may be less inclined to enter the American market, though biopharmaceutical companies may also try to increase their prices in foreign nations to make up for the losses, Hadley said.

"If they're unable to do that, then we might see a reduction in research and development as a result of the reduction in payment rates," he said.