Under a single payer health insurance model, the government provides either health insurance or direct healthcare services. In either case, the government uses tax revenue to support the program and is primarily responsible for paying for and administering health care costs, rather than private health insurance plans operating a tax-funded insurance plan that covers all medical costs.
In other words, rather than buying private plans from a health insurer or having it provided by an employer, individuals pay taxes to the government under a single payer system. Depending on the program, individuals may then either receive healthcare services from private entities paid by the government, or receive services from entities employed directly by the government.
To illustrate this, it is helpful to look at two single payer programs in the U.S. that already exist. The first is the Veteran’s Health Administration (VHA), which provides free health care services to individuals who have served in the U.S. military. Taxpayers fund the VHA. The federal government administers the agency by directly employing healthcare personnel and contracting with private entities to provide this care.
The Medicare program is another type of single payer program. It provides health insurance to all adults over the age of 65 who have adequate work history in the United States. Medicare is also funded by taxpayer dollars and administered by the federal government, but differs from the VHA program in that it only provides payment (reimbursement) for health services and does not directly employ healthcare personnel. It is also important to note that, because the Medicare program is health insurance and not direct health services, health care is not free and enrollees must pay premiums and certain other out of pocket contributions. In addition, some components of the Medicare program are supplemented with private health insurance plans and thus many older adults in the U.S. have healthcare that is funded by both the government and private plans.
Of course, the main difference between these programs and a Canadian or European-style single payer program is that, while all taxpayers pay into the Veteran’s Health Administration and the Medicare program, only veterans and older adults (respectively) are eligible for healthcare services through those programs.
Over the last 20 years, several states have attempted to pass single payer systems, often modeling the U.K’s and Canada’s national systems. Vermont is the only state that has adopted such a system, but this plan was cancelled in 2014. For more information, read Politico’s article on why the Vermont government shut down its single payer system.
However, with the creation and implementation of the ACA, single payer systems have gained some popularity in recent years. Former presidential candidate Senator Bernie Sanders is a proponent of a national single payer system, and has promised to introduce a bill supporting this model to the U.S. Senate. In California, State Senators Ricardo Lara and Toni Atkins have introduced legislation to replace private health insurance with a single payer system and Lt. Governor Gavin Newsom has adopted single payer as part of his gubernatorial campaign platform.