Single-payer healthcare facts for kids

Kids Encyclopedia Facts

Single-payer healthcare is a way for a country to pay for its citizens' medical care. It means that one main public system, usually run by the government, covers the costs of important healthcare services for everyone who lives there. This is a type of universal healthcare, which means everyone gets the care they need.

Sometimes, the government system pays private doctors and hospitals to provide care, like in Canada. Other times, the government actually owns the hospitals and employs the doctors, like in the United Kingdom. The "single-payer" part just means that one public group is responsible for paying for healthcare, not many different private companies or a mix of both.

What is Single-Payer Healthcare?

In single-payer healthcare systems, one government or a government-linked group pays for all the covered health services. Governments use this system to achieve several important goals:

To make sure everyone has universal healthcare.
To lower the financial cost of healthcare for people.
To improve the health of everyone in the country.

The World Health Organization and the United Nations General Assembly have both set goals for countries to achieve universal healthcare.

A single-payer system creates one big group of people who are covered, usually everyone in a country or region. It also sets one set of rules for what services are covered, how much doctors and hospitals get paid, the prices of medicines, and the basic quality of care.

In richer countries, single-payer healthcare is usually available to all citizens and legal residents. Good examples include the National Health Service in the UK, Medicare in Australia, Medicare in Canada, and National Health Insurance in Taiwan.

How the Term "Single-Payer" Started

The phrase "single-payer" became popular in the 1990s. It helped explain the differences between Canada's healthcare system and systems like the UK's NHS. In Canada, the government pays private groups to provide healthcare. In other systems, like the NHS, the government both pays for and provides the care directly.

Usually, "single-payer healthcare" means that health insurance is a public service offered to all citizens and legal residents. It doesn't usually mean the government actually runs all the hospitals or clinics. The money for this system can be managed directly by the government or by a public agency that is watched closely by the government.

This system is different from "multi-payer" systems, which have many public and private groups paying for healthcare. It's also different from "two-tiered" systems, where there's a public system for serious problems and private insurance for everyday care.

Countries with Single-Payer Systems

Many countries around the world have single-payer health insurance programs. These programs usually provide some form of universal health care. The way they work can be different. In some places, like the UK or Spain, doctors work for the government and hospitals are run by the government. In other places, like Canada, the government buys healthcare services from private organizations.

Canada's Healthcare System

Healthcare in Canada is paid for by the government and is mostly free when you use it. Most services are actually provided by private doctors and hospitals. The system was set up by the Canada Health Act in 1984. The government makes sure the quality of care is good by setting national rules. The government doesn't get involved in daily care or collect personal health information; that stays private between you and your doctor.

Canada's healthcare systems, which are run by each province, are good at managing costs because they are simple to run. In each province, doctors send their bills directly to the provincial government's insurance plan. Patients don't have to worry about billing or getting money back.

Most essential basic care, including maternity and fertility issues, is covered. This means there's no need for many different insurance plans. Depending on the province, dental and eye care might not be covered, but employers often provide private insurance for these. Some provinces offer private plans if people want a private room in the hospital.

Cosmetic surgery and some optional surgeries are not considered essential and are usually not covered. People can pay for these themselves or through private insurance. Your health coverage doesn't change if you lose or change jobs, and there are no limits on how much care you can get in your lifetime or exclusions for health problems you had before.

Medicines are covered by public funds, paid for privately, or through job-based private insurance. The government talks with drug companies to get lower prices for medicines.

People choose their own family doctors (also called GPs). If a patient needs to see a specialist, their family doctor can send them to one.

Canadians sometimes have to wait for certain treatments and tests. The average wait time to see a specialist is a little over four weeks. For tests like MRI and CAT scans, the average wait is two weeks. For surgery, the average wait is four weeks. Most people wait less than three months for these services.

Taiwan's Healthcare System

Healthcare in Taiwan is managed by the Department of Health. Like in other developed countries, people in Taiwan are generally well-fed but face health issues like obesity and heart disease.

In 2002, Taiwan had about 1.6 doctors and 5.9 hospital beds for every 1,000 people. There were 36 hospitals and 2,601 clinics. Health spending was 5.8% of the country's total economic output (GDP) in 2001, with most of that (64.9%) coming from public money.

Even though the cost of healthcare went up when Taiwan expanded its coverage, the single-payer system has protected people from big financial risks. It has made healthcare easier for everyone to afford, and about 70% of the public are happy with it.

Taiwan's current healthcare system, called National Health Insurance (NHI), started in 1995. NHI is a single-payer, required social insurance plan that manages all healthcare money. The system promises that all citizens have equal access to healthcare. By the end of 2004, 99% of the population was covered.

NHI is mainly paid for by premiums, which are like taxes on salaries. It also gets money from small payments people make when they get care and direct government funding. At first, doctors and hospitals were paid for each service they provided. Most healthcare providers are private and compete with each other. However, some providers took advantage of the system by offering unnecessary services and then billing the government.

Because costs were rising, NHI changed its payment system in 2002. They switched to a "global budget," which means they set a total amount of money for healthcare providers each year. Taiwan's success with its single-payer system is partly due to its skilled people and the government's good organization, which helps manage the program well.

South Korea's Healthcare System

South Korea used to have a system where many different groups paid for healthcare, similar to Japan and Germany. Before 1977, people had voluntary private health insurance. But reforms started in 1977 led to everyone being covered by 1989. In 2000, a big change in how healthcare was paid for happened: all the different medical groups merged into one National Health Insurance Service. This new service became a single-payer healthcare system in 2004.

Countries with "Beveridge Model" Systems

The "Beveridge Model" of healthcare systems means that the government not only pays for healthcare but also owns and runs the hospitals and employs the doctors.

Nordic Countries' Healthcare Systems

The Nordic countries (like Sweden, Norway, Denmark) are sometimes seen as having single-payer health services. This is because their systems are a form of the "Beveridge Model," where public providers deliver healthcare in addition to public health insurance.

The "Nordic model" of healthcare has a few common features:

Mostly public healthcare providers.
Limited private health insurance.
Systems run by regions or local areas, with less involvement from the central government.

Because of this regional control, some might argue they are only single-payer at a local level, or even multi-payer, unlike the national systems in Taiwan and South Korea.

United Kingdom's Healthcare System

Healthcare in the United Kingdom is a "devolved matter." This means that England, Scotland, Wales, and Northern Ireland each have their own systems of private and publicly funded healthcare. These are generally called the National Health Service (NHS). With mostly public or government-owned providers, this also fits the "Beveridge Model" of healthcare. It is sometimes considered single-payer, with much less private involvement compared to other universal systems.

Each country's different policies mean there are some differences between the systems. However, each country provides public healthcare to all UK permanent residents that is free when you use it, paid for by general taxes.

There is also a private healthcare sector, but it's much smaller than the public one. Private healthcare is paid for through private health insurance, employer-funded plans, or directly by the patient. However, care can be limited for people with certain conditions like HIV.

The individual systems are:

England: National Health Service (NHS)
Scotland: NHS Scotland
Wales: NHS Wales
Northern Ireland: Health and Social Care (HSC)

In England, money from taxes goes through NHS England, which is in charge of specialist services and primary care. Clinical Commissioning Groups (CCGs) manage 60% of the budget and arrange health services for their local areas.

These groups don't provide services themselves. Instead, they buy services from NHS Trusts, Foundation Trusts, and private, volunteer, and social businesses.

Countries with Mixed Single-Payer and Private Insurance Systems

Australia's Healthcare System

The logo for Medicare in Australia.

Healthcare in Australia is provided by both private and government groups. Medicare is Australia's publicly funded universal health care system. It started in 1984 and exists alongside a private health system. For example, Medicare covers all costs for an Australian citizen in a public hospital, but only 75% of the cost in a private hospital. Medicare is partly funded by a 2% income tax (with exceptions for low-income earners), but mostly from general government income. High-income earners without private health insurance pay an extra 1% tax.

Besides Medicare, there's a separate Pharmaceutical Benefits Scheme that greatly lowers the cost of many prescription medicines. The Minister for Health manages national health policy. Parts of this policy, like how hospitals are run, are overseen by individual states.

India's Healthcare System

India has a mixed healthcare system. It's paid for by a combination of public and private health insurance, along with public hospitals that are almost entirely funded by taxes. The public hospital system is basically free for all Indian residents, except for small, symbolic payments for some services.

At the national level, the Government of India launched a health insurance program called Ayushman Bharat in 2018. This program aims to cover the poorest 50% of the country's population (500 million people) who work in the informal sector (businesses with fewer than 10 employees). It offers them free treatment, even at private hospitals.

People who work in the formal sector (businesses with more than 10 employees) and earn up to Rs 21,000 a month are covered by the Employees' State Insurance social insurance scheme. This scheme fully pays for their healthcare (along with pension and unemployment benefits) in both public and private hospitals. People earning more than that usually get health insurance from their employers through public or private insurance companies. As of 2020, 300 million Indians were covered by insurance bought by their employers as group or individual plans. Unemployed people without coverage are covered by various state insurance schemes if they can't afford to pay for it.

In 2019, the total government spending on healthcare was $36 billion, or 1.23% of its GDP. Since India became independent, the public hospital system has been entirely funded by general taxes.

Israel's Healthcare System

Healthcare in Israel is universal, and it's required to be part of a medical insurance plan. All Israeli residents have a basic right to healthcare. The Israeli healthcare system is based on the National Health Insurance Law of 1995. This law requires all citizens living in the country to join one of four official health insurance organizations, called Kupat Holim (which means "Sick Funds"). These are non-profit groups and cannot refuse membership to any Israeli resident. Israelis can get more medical coverage and better options by buying private health insurance.

In a 2013 survey of 48 countries, Israel's health system was ranked fourth in the world for how efficient it was. In 2014, it was ranked seventh out of 51. In 2020, Israel's health system was ranked the third most efficient in the world. In 2015, Israel was ranked the sixth-healthiest country in the world by Bloomberg rankings and ranked eighth for life expectancy.

Spain's Healthcare System

Spain's single-payer healthcare system was officially created by the government in 1963. It was paid for by workers' contributions and covered them and their families.

The system became universal, meaning it covered everyone, later in 1986. At the same time, the management of public healthcare was given to the different regions in the country. While it wasn't allowed before, in 1997 it became possible for public authorities to let private companies manage publicly funded healthcare.

Also, alongside the single-payer healthcare system, there are private insurance companies. These provide coverage for some private doctors and hospitals. Employers sometimes offer private health insurance as a benefit. In 2013, 14.8% of the Spanish population had private health insurance.

In 2000, the Spanish healthcare system was rated by the World Health Organization as the 7th best in the world. In 2018, Spain's healthcare system ranked 19th in Europe according to the Euro health consumer index.

United States Healthcare Proposals

Medicare in the United States is a public healthcare system, but it's only for people over 65, people under 65 with certain disabilities, and anyone with serious kidney disease.

Many ideas have been suggested for a universal single-payer healthcare system in the United States. One of these is the Medicare for All Act, which was first introduced in Congress in 2003 and many times since.

In 2018, more than 60 U.S. House Democrats formed a Medicare for All Caucus. In 2021, House Democrats introduced the Medicare for All Act of 2021 with 112 supporters.

Supporters say that spending money on preventive healthcare (like regular check-ups) can save hundreds of billions of dollars each year. They believe that publicly funded universal healthcare would help businesses and customers. Businesses would have more potential customers and might pay less, saving on administrative costs.

A main reason Americans say they have trouble getting healthcare is that it's too expensive. Over 27 million people in the United States don't have health insurance. This is a big concern for people who want to change the healthcare system. Not having health insurance is linked to more deaths that could have been prevented. A study from Harvard Medical School found that nearly 45,000 deaths each year are linked to not having health insurance. The study also found that uninsured working Americans have a 40% higher risk of death compared to working Americans with private insurance.

Supporters of single-payer or Medicare for All note that minority groups, poor people, and those in rural areas often can't afford private health insurance. Even those who can afford it might have to pay high deductibles and co-payments, which can lead to huge financial problems for families.

Advocates have estimated that a single-payer system could save 40% of all national health spending in the long run because of more preventive health care. However, other studies have found that preventive care can sometimes be more expensive because more people use it.

Any national system would be paid for partly by taxes that would replace insurance premiums. But supporters also believe money would be saved through preventive care and by getting rid of insurance company overhead costs and hospital billing expenses.

A 2008 study by Physicians for a National Health Program estimated immediate savings of $350 billion per year. The Commonwealth Fund believes that if the United States adopted a universal healthcare system, the death rate would improve, and the country would save about $570 billion a year.

National Plans and Ideas

The government is increasingly involved in U.S. health care spending. In 2004, it paid about 45% of the $2.2 trillion spent on individuals' medical care. However, studies show that the government's share of health spending in the U.S. might have been closer to 60% in 2002.

According to health economist Uwe Reinhardt, U.S. Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP) are like "social insurance" programs that work with a mostly private healthcare system. He says the Veterans Administration healthcare system is a pure form of "socialized medicine" because the government owns, runs, and pays for it.

A study published in the Annals of Internal Medicine found that the quality of care for Veterans Administration patients was much higher overall than for patients using United States Medicare.

The Medicare for All Act is a bill that has been introduced many times in the United States House of Representatives by former Representative John Conyers. This act would create a universal single-payer healthcare system in the United States, similar to Canada's Medicare, the United Kingdom's National Health Service, and Taiwan's Bureau of National Health Insurance. The bill was first introduced in 2003 and has been reintroduced in every Congress since.

After Bernie Sanders' 2016 presidential campaign, which strongly supported universal healthcare, single-payer ideas gained more attention. In January 2017, Conyers reintroduced his bill. Four months later, it had 112 supporters, which was more than 25% of the House for the first time. In September of the same year, Sanders and 16 other senators introduced a Medicare-for-all bill in the Senate.

An analysis of a study on the 2017 proposal found that Medicare for All would provide more healthcare coverage at a lower cost than the current system. It predicted a net reduction in national health spending of about $2 trillion over 10 years (2022-2031), while also increasing healthcare coverage.

The Congressional Budget Office (CBO) has looked at the cost of a single-payer healthcare system several times since 1991. A 1991 report noted that if the U.S. switched to a universal single-payer system, the savings in administrative costs (10% of health spending) would be enough to cover the cost of universal coverage.

A 1993 CBO report said that the "net cost of achieving universal insurance coverage under this single payer system would be negative." This was partly because people's payments for health would fall, even though taxes would need to increase to pay for the plan. Another 1993 study also showed positive results, with the CBO stating that administrative savings would offset much of the increased demand for healthcare services.

A 2014 study found that the actual administrative cost of healthcare in the United States was 27% of all national health spending. This study looked at both direct costs from insurers (for profit, administration, and marketing) and the indirect costs for healthcare providers (like hospitals and doctors) when working with private health insurers.

The study estimated that the extra cost for the private insurer health system in the U.S. was about $471 billion in 2012 compared to a single-payer system like Canada's. This was over 20% of the total national healthcare spending in 2012.

A February 2020 study found that the proposed Medicare for All Act would save 68,000 lives and $450 billion in national healthcare spending each year. According to a 2022 study, a single-payer universal healthcare system would have saved 212,000 lives and avoided over $100 billion in medical costs during the COVID-19 pandemic in the United States in 2020 alone. About 16% of all COVID-19 deaths happened in the U.S., even though it only has 4% of the world's population.

State-Level Proposals

Several states have tried to pass single-payer healthcare through public votes or state laws, but most have failed. Vermont canceled its plan for single-payer healthcare in December 2014.

California

California tried to pass a single-payer health system in 1994, but it only got 27% of the votes.

Several bills have been proposed in the state legislature. The "California Universal Healthcare Act" passed the California State Legislature in 2006 and again in 2008. Both times, Governor Arnold Schwarzenegger vetoed the bill.

In 2017, SB 562, also known as "The Healthy California Act," was introduced. This bill was a $400 billion plan to create single-payer healthcare in California. Under this bill, Californians would have health coverage without paying any premiums, co-pays, or deductibles. All California residents would be covered, no matter their immigration status. It would also include students attending California schools who bought their healthcare through the school.

Services covered by this bill would need to be medically necessary, as decided by the patient's chosen healthcare provider. These services would range from preventive care to emergency services, plus prescription drugs. SB 562 passed the State Senate in June 2017. When it went to the State Assembly, it was put on hold because of concerns about how to pay for it.

According to SB 562, a "Healthy California Trust Fund" would be set up to pay for the bill. States currently get money from the federal government for certain healthcare services like Medicaid and Medicare. These funds, along with taxes, would go into the new trust fund. However, California would first need permission from the federal government to combine all this money into one central fund.

A new bill, AB 1400, proposed in 2021, would have created single-payer healthcare in California called CalCare. The bill was withdrawn in January 2022 because it didn't have enough votes to pass.

In 2019, California Governor Gavin Newsom created a commission to study if a universal health care system, like a single-payer system, could work in California.

Colorado

In November 2016, Colorado voters had a chance to vote on a single-payer healthcare system called ColoradoCare. This system would have been paid for by a 10% payroll tax, with employers paying two-thirds and employees paying one-third. This would have replaced the private health insurance premiums people and companies currently pay. It was estimated to need $38 billion annually and would cover all residents with no deductibles.

The voters rejected the proposal by 79%.

Hawaii

In 2009, the Hawaii state legislature passed a single-payer healthcare bill. However, Republican Governor Linda Lingle vetoed it. Even though the legislature voted to override the veto, the bill was not put into action.

Illinois

In 2007, the Health Care for All Illinois Act was introduced. A committee in the Illinois House of Representatives approved the single-payer bill. However, the bill was later sent back to a different committee and was not discussed again during that session.

Massachusetts

Massachusetts passed a universal healthcare program in 1986. But due to budget problems and political changes, it was canceled before it could be put into law.

In November 2010, voters in 14 state districts voted on a question asking if their representative should support a single-payer health insurance system. The question passed in all 14 districts.

Maine

In June 2021, a law was passed in Maine that would create a board called the Maine Healthcare Board. This board would be in charge of designing and running a state health insurance plan called the Maine Healthcare Plan, which would cover everyone in Maine. However, neither the board nor the plan has been created yet. They depend on a federal law called H.R.3775, the State-Based Universal Health Care Act, being passed.

In 2020, a group called Maine AllCare launched a campaign to get a statewide vote on creating a universal, publicly funded healthcare system by 2024. They needed 63,000 signatures from voters to get on the 2022 ballot. The campaign was stopped in April 2022 because they weren't on track to collect enough signatures by the deadline.

Minnesota

The Minnesota Health Act, which would create a statewide single-payer health plan, has been presented to the Minnesota legislature many times since 2009. The bill passed some committees in 2009 and 2010 but did not become law. It has been introduced again in recent years.

Montana

In September 2011, Governor Brian Schweitzer announced he wanted to get permission from the federal government to set up a single-payer healthcare system in Montana. Governor Schweitzer was not able to create a full single-payer system. However, he did work to open government-run clinics and, in his last budget as governor, increased healthcare coverage for lower-income Montana residents.

New York

New York State has been trying to pass the New York Health Act, which would create a statewide single-payer health plan, since 1992. The New York Health Act passed the Assembly four times (in 1992, 2015, 2016, and 2017). However, it has not yet passed the Senate. Each time, the bill passed the Assembly with strong support.

Oregon

The state of Oregon tried to pass single-payer healthcare in 2002, but the measure was rejected by a large number of voters.

Pennsylvania

The Family Business and Healthcare Security Act has been introduced in the Pennsylvania legislature many times, but it has never been able to pass.

Vermont

Vermont passed a law in 2011 that created Green Mountain Care. When Governor Peter Shumlin signed the bill, Vermont became the first state to have a system that was almost like single-payer healthcare. While the bill is considered a single-payer bill, private insurance companies can still operate in the state, so it doesn't perfectly fit the strict definition of single-payer.

The person who first proposed the bill said Green Mountain Care was "as close as we can get [to single-payer] at the state level." Vermont stopped the plan in 2014, saying the costs and tax increases would be too high to put it into action.

Washington

There have been several efforts for statewide single-payer healthcare in Washington state. In 2018, a group called Whole Washington tried to get a statewide single-payer plan called the Whole Washington Health Trust on the ballot, but they didn't collect enough signatures. Washington has also passed a law to create a group that will design a statewide universal healthcare plan by 2026. In 2021, a bill that was a legislative version of Whole Washington's idea was introduced in the state legislature.

Groups That Support Single-Payer

Groups like Physicians for a National Health Program, National Nurses United, the American Medical Student Association, Healthcare-NOW!, Public Citizen, and the California Nurses Association have all asked for a single-payer healthcare program in the United States.

A 2007 study found that 59% of doctors "supported legislation to establish national health insurance," while 9% were neutral and 32% were against it. In January 2020, The American College of Physicians supported the idea of a single-payer system for the U.S. and published articles supporting it.