Quora Question: Why Don't States Provide Single-Payer Healthcare?

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Supporters of universal government health care rally in New York, Sept. 15 Chris Hondros / Getty Images

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Answer from Michael Lee, Public Policy Analyst:

Why haven't liberal states like California adopted a single-payer healthcare system to show the rest of the states that it works? There’s a bill in the California state Senate calling for just that approach, though note that it hasn’t gone any further than a committee vote so far. But more generally, states haven’t managed to adopt single-payer health care because they don’t have the money and can’t raise taxes enough to do it.

Vermont tried in 2014. This is a small state—620,000 residents or so—and liberal enough to have elected a democratic socialist to the Senate for the past 10 years. But even there, with a state legislature and a governor that really wanted to do it, they couldn’t cobble together the funding compromises. Vermont’s state budget at the time was about $2.7 billion annually, and they’d estimated that their single-payer plan would cost approximately $2 billion annually. That’s an almost 75% increase in state spending, and they couldn’t get the votes together for the necessary tax increases.

Some commentary on the Vermont issue from one of my favorite economists at Bloomberg View:

Quite a bit of health care spending is channeled through the federal government, and most state-level single-payer plans call for waivers of federal requirements to enable states to capture those funds—such as Medicare spending, for example. But your guess is as good as mine as to what kinds of plans could win the Trump Administration’s approval.

All that said, I wouldn’t be surprised if some states make a big push for state-level single-payer over the next few years. But there’ll obviously be trade-offs, whether in the form of higher taxes, less coverage, or fewer providers, and it remains to be seen if a state is willing to take them on.

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