 I.
Introduction
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The
purpose of this analysis is to explore the expected costs and impacts
of two alternative universal health
reform
plans for Maryland. We analyzed a single-payer model and a multi-payer
approach, both of which would
achieve
universal health insurance coverage.
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In
general terms, the single-payer model is one where all individuals
in the state are covered under a single
uniform
health plan that is administered and funded by the state. The new
single-payer system would replace all
current
public sector insurance systems including: Medicare, Medicaid, CHAMPUS
and the Federal Employees
Health
Benefits Plan (FEHBP). It would also replace private health insurance
plans in the state. The program
would
be financed with: current government health care funding for discontinued
programs; and new taxes on
employer
payroll, tobacco products, alcohol products, and personal income.
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The
multi-payer alternative is similar to the single-payer model in that
a tax financed government program is
established
to cover all Marylanders. However, under the multi-payer approach,
employers have the option of
opting-out
of the government program and provide coverage to their workers and
their dependents through an
employer-sponsored
plan. If necessary, a risk adjustment process would be used to correct
for any employer
selection
behavior resulting in an accumulation of higher cost individuals in
the government plan.
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In
this report, we analyze the financial impact of these health models
on various payers for health care including
state,
local, and federal governments. We also estimate the financial impact
of the proposal on employers by
industry
and firm size. In addition, we estimate the impact of the plan on
household health spending by age,
income
level, and other characteristics. We begin with a detailed analysis
of the single-payer model and then
show
how the effects of such a plan would change if employers were permitted
to opt-out of the government
program
as under the multi-payer model.
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Our
analysis is presented in the following sections:
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Overview
of the Single-Payer Model;
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Maryland
Health Spending under the Single-Payer Model;
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Government
Spending under the Single-Payer Model;
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Changes
in Employer Health Spending;
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Impact
of a Single-Payer Model on Household Health Spending; and
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The
Multi-Payer Universal Coverage Model
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