Rhode Island: Single-Payer Program

Rhode Island: Single-Payer Program

Upshot

• The Act for a Comprehensive Health Insurance, H. 8199 and S. 2769, would establish the Rhode Island Comprehensive Health Insurance Program (RICHIP), single-payer health care insurance program for all state residents.

• The program would be financed by two mechanisms: 1) consolidating existing government and private payments to multiple insurance carriers into a single-payer program; and 2) progressive taxes on large businesses and federal reimbursements. These financing streams would replace insurance premiums, copays, and deductibles

• The Senate Committee on Health and Human Services and the House Committee on Finance recommended that the bills be held for further study, indicating that consideration of the bill is indefinitely postponed.

Background

Rhode Island operates a state-based Marketplace and two insurers offered coverage in 2022. The state also features a Small Business Health Options Program (SHOP) Marketplace for small businesses. Additionally, as of 2020, Rhode Island implemented an individual mandate with a penalty and received approval for a reinsurance program. For the 2022 open enrollment period, approximately 32,000 residents enrolled in Marketplace coverage.

Summary

The legislation (H. 8119 and S. 2769) would create the Rhode Island Comprehensive Health Insurance Program and would establish requirements related to oversight and administration, eligibility, benefits, provider participation, and financing. Additional details follow.

• RICHIP Director: The governor would be required to appoint a RICHIP Director to oversee the program, which would include ensuring the operational well-being and fiscal solvency of the program, pursuing necessary federal waivers, establishing procedures for eligibility and enrollment, and creating expenditure, status, and assessment reports.

• RICHIP Board: The bill calls for the establishment of a RICHIP Board that would be responsible for annually establishing the RICHIP benefits package, including a formulary and a list of other medically necessary goods, as well as procedures for handling complaints and appeals related to the benefits package. The Board would also be responsible for establishing provider reimbursement and a procedure for handling provider complaints and appeals.

• Eligibility: The legislation states that all qualified residents of the state could participate in RICHIP. The director would be responsible for establishing procedures to determine eligibility, enrollment, disenrollment, and disqualification.

• Benefits: RICHIP would provide coverage for services and goods deemed medically necessary by a qualified health care provider, including EHBs, and other services covered by Medicare, Medicaid, and CHIP. 

• Providers: All providers would be eligible to participate in RICHIP and would be required to meet state licensing requirements in order to participate. Providers would be able to elect to either participate fully in the program or not at all. The bill explains that for-profit providers may continue to offer services in the state, but that they would be prohibited from charging patients more than RICHIP reimbursement rates for covered services.

• Provider Reimbursement: The RICHIP Board would determine reimbursement rates to providers. Rates would be required to be equal or greater than Medicare rates. The bill also stipulates that the minimum rate for outpatient behavioral health services would be equal to 150 percent of the Medicare rate. Finally, for services in which there is no Medicare rate, the Director would set the minimum rate. The Director would also be required to review the rates at least annually.

• Private Insurance Companies: Private insurance companies would be prohibited from selling insurance coverage to Rhode Island residents that duplicates the benefits provided under RICHIP. This would mean that the existing individual market insurance plans and employer-sponsored health plans would not offer coverage of these services.

• Financing: The Director would be required to submit a revenue plan to the governor and general assembly for approval. The basic structure of the initial revenue plan proposal would be based on a consideration of: 1) the anticipated savings from a single-payer program; 2) government funds available for health care; 3) private funds available for health care; and 4) replacing the current flat tax rate across all incomes with a tax rate that is proportional to income level to finance RICHIP. Such funds would be deposited into the RICHIP trust fund.

The Office of Health and Human Services would be required to seek and obtain waivers and other approvals related to Medicaid, CHIP, Medicare, federal tax exemptions for health care, the ACA, and any other relevant federal programs so that federal funds and other subsidies that would otherwise be paid to the state, its residents, and health care providers, would be paid by the federal government to the state and deposited into the RICHIP trust fund. These waivers could include Section 1332 and 1115 waivers.

• Implementation: The Director would be required to complete an implementation plan to provide health care coverage for qualified residents of the state within 12 months of enacting the legislation.

Pennsylvania: Single-Payer Program

Pennsylvania: Single-Payer Program

Upshot

• Pennsylvania House Democrats introduced H.B. 2824, which would establish the Pennsylvania Health Care Plan (Plan), a statewide comprehensive health care system to provide coverage for all residents without any premium or cost sharing.

• Goals of the plans would include controlling health care costs; achieving measurable improvements in health outcomes; promoting a culture of health awareness; and developing an integrated health care database to support health care planning and quality assurance.

• The bill is not expected to advance this session, which concludes at the end of November. The lead sponsor acknowledged that the reintroduction of the bill was “largely symbolic.”

Background

Pennsylvania operates a state-based Marketplace. Thirteen insurers offered plans in 2022, with the same plans intending on offering coverage in 2023. Through legislation, the state transitioned to running its own Marketplace and implementing a reinsurance program in 2021. For the 2022 open enrollment period, 375,000 residents enrolled in individual Marketplace coverage.

Similar legislation has been introduced six times since 2005, with Rep. Pamela DeLissio (D) having introduced the bill twice. During a press conference on the reintroduction of the bill, Rep. DeLissio asserted that “health care is a right and not a privilege” and expressed support for a system which ensures that “citizens are not going financially bankrupt to stay healthy.” Rep. DeLissio also acknowledged that the bill is “largely symbolic” and hopes it “highlights that health care access must be equitable and affordable.”

Summary

The bill would establish the Pennsylvania Health Care Plan (Plan), a statewide comprehensive health care system to provide coverage for all residents without any premium or cost sharing. The following program aspects and administrative bodies are detailed below.

• Establishment of the Pennsylvania Health Care Plan: The Plan would be required to provide coverage for residents of the Commonwealth that aims to:

  • Control health care costs;

  • Achieve measurable improvements in health outcomes;

  • Promote a culture of health awareness; and

  • Develop an integrated health care database to support health care planning and quality assurance.

• Eligibility: The Plan would provide health care coverage for all state residents. The Pennsylvania Health Care Agency would establish rules for residency determinations.

• Covered Services: The Pennsylvania Health Care Board would establish a single health care benefits package that mirrors the categories of services in the EHBs. Plan enrollees would not be subject to any copayments, deductibles, or any other fees for a service included in the covered services.

• Provider Participation and Reimbursement: All licensed providers would be eligible to participate in the plan and reimbursement would be determined by the Board. The reimbursement rate would reflect compensation for services that fairly and fully reflect the skill, training, outcomes, operating overhead included in the costs of providing the service, capital costs of facilities and equipment, and cost of consumables and the expense of safely discarding medical waste, plus a reasonable profit sufficient to encourage talented individuals to enter the field.

The bill would allow participating providers to petition the Board for adjustments to reimbursement that they believe to be too low. After Agency review of the petition, the Board would determine the adequacy of the payment rate. Providers that are still dissatisfied with the rate could appeal the Board’s decision to the Commonwealth Court system.

• Supplemental Health Insurance Coverage and Duplicate Coverage: Under the Plan, private health insurers would be permitted to offer coverage supplemental to the plan, but they could not provide duplicate coverage of covered services.

• Rational Cost Containment: The Board would be required to screen and approve or disapprove private or public expenditures for new health care facilities and other capital investments that may lead to redundant and inefficient health care provider capacity.

• Payroll Taxes: To finance the Plan, a 10 percent tax would be imposed on payroll amounts generated as a result of an employer conducting business activity within this Commonwealth and an additional 3 percent tax upon each class of income.

• Plan Administration: The bill would establish several government agencies that would be responsible for the oversight and administration of the Plan. Additional details on each follow.

Minnesota: Single-Payer Study

Minnesota: Single-Payer Study

Upshot

• S.F. 2010 and H.F. 2499 would require an analysis of the benefits and costs of a legislative proposal that would establish a single-payer health program, known as Minnesota Health Plan. The analysis would be used to compare the universal system to the current system.

• The analysis would also consider how a single-payer program would impact the uninsured rate, completeness of coverage, adequacy of coverage, and quality and timeliness of care. A report of the findings would be due to the legislature by January 1, 2023. 

• The bill was initially taken up in 2021, but ultimately died in Committee with little action. This may be due to Minnesota exploring other options towards increased coverage and access, such as a public option and a basic health plan option.

Background

Minnesota operates a state-based Marketplace. Five insurers offered plans in 2022, with the same insurers intending to offer coverage in 2023. The state also has a reinsurance program, which was renewed in 2022 and will continue through 2027. As of 2022, 121,000 residents received coverage through the individual Marketplace. Minnesota also features a BHP, in which coverage is available to residents with incomes between 139 and 200 percent FPL.

During the most recent legislative session, Minnesota pursued several options to increase insurance affordability and coverage. This included legislation for an affordability commission, a public option, and a basic health plan buy-in, in addition to this study on the cost of a universal health care financing system.

Summary

The bill would require the Commissioner of Health to contract with the University of Minnesota School of Public Health to conduct an analysis of the benefits and costs of a legislative proposal for a single-payer financing system, known as the Minnesota Health Plan, and a similar analysis of the current health care financing system, including Medicare, Medicaid, employer-sponsored insurance, and individual Marketplace coverage, to assist the state in comparing the proposal to the current system.

The proposal for a universal health care system, known as the Minnesota Health Plan, would ensure that all state residents are covered and provided comprehensive benefits with the ability to choose any provider. The analysis would measure the performance of both the proposed Minnesota Health Plan and the current health care financing system over a ten-year period to contrast the impact on:

• The number of people covered versus those who continue to lack access to care because of financial barriers;

• The completeness of the coverage and the number of people lacking coverage for dental, long-term care, medical equipment or supplies, vision and hearing, or other health services that are not covered;

• The adequacy of the coverage, the level of underinsured in the state;

• The timeliness and appropriateness of the care received and whether people turn to inappropriate care such as emergency rooms; and

• Total public and private health care spending in Minnesota under the current system versus under the legislative proposal.

The Commissioner of Health would be required to issue a final report by January 15, 2023 and would be permitted to provide interim reports to the legislative committees with jurisdiction over health and human services policy and finance.

Massachusetts: Single-Payer Program

Massachusetts: Single-Payer Program

Upshot

• The Massachusetts Legislature introduced two proposals this session that would support the development of a single-payer system. The first bill, H. 1267 / S. 766, provides the framework for a Medicare for All single-payer program. The second bill, S. 758, requires an analysis of a methodology for a single-payer benchmark, which would provide an estimate of the cost of operating a single-payer program.

• The second bill would also assist the Executive Director in developing and implementing the financing structure for the Massachusetts Health Care Trust single-payer program, as required by the first bill.

• Though the Medicare for All bill garnered moderate support with 60 cosponsors between the House and the Senate, it  failed to advance and was eventually accompanied by a bill for further study of the topic. Similarly, the single-payer benchmark bill was accompanied by a study order, which authorizes the Committee to study the bill and similar ones and file a narrative report of its findings during the recess period. Neither of the study bills have been approved.

Background

Massachusetts has long been interested in establishing a Medicare for All single-payer system. Most bills to do so have been sent to study for further examination have died without any additional action. This year’s bill faced a similar fate and was sent to study, despite having numerous cosponsors on the bill. Advocates have also pushed for local non-binding ballot measures that have dated back to 1998. The most recent ballot language asked voters if their elected state representative should support legislation that would create a single-payer system for the purposes of attaining universal coverage and establishing health care as a human right. Advocates explained that while non-binding ballot initiatives do not require legislators to become cosponsors of specific legislation, they can be used to hold legislators accountable. In the most recent ballot measure in 2010, support for the measure ranged from 52 percent in the 12th district to 76 percent in the 15th district.

Massachusetts features a state-based individual Marketplace, known as Health Connector, with eight carriers operating on the Marketplace in 2022. The state also implemented an individual mandate with a penalty. For the 2022 open enrollment period, 268,000 residents enrolled in Marketplace coverage.

Massachusetts has been a leader in health care reform since the enactment of the 2006 health care reform law that provided near-universal coverage for state residents. Since its enactment, Massachusetts has pursued other incremental reforms, including legislation that would establish a public option.

Summary

The Massachusetts Legislature introduced a bill aimed at supporting the development of a single-payer system for the state. The first bill would create a Medicare for All single-payer program and establish processes for determining eligibility, benefits, and provider reimbursement. The second bill would analyze how a single-payer system could generate savings for the state. Summaries for each bill follow.

• An Act Establishing Medicare for All in Massachusetts: The bill (H. 1267 and S. 766) outlines program requirements for a Medicare for All system that would be known as the Massachusetts Health Care Trust, to be referred to as the Trust. Additional details on the Trust administration, benefits, provider participation and reimbursement, and financing follow.

  • Board of Trustees and Executive Director – The Board of Trustees would be responsible for ensuring universal access to high quality, affordable health care for every resident and would be responsible for establishing policies related to the benefit package, as well as provider participation and reimbursement.

The Executive Director would be responsible for administering and enforcing the provisions of this law. The Executive Director would be directed to establish policies related to enrollment, state purchasing power for prescription drugs, health service reimbursement, state budgets for delivering health services, and annual benefits.

• Covered Benefits – All Massachusetts residents, regardless of citizenship status, including people who are incarcerated, would receive coverage for services that mirror the categories of the EHBs. Participants would not be subject to any deductible, copay, coinsurance, or other cost sharing for covered benefits

• Eligible Health Care Practitioners and Facilities – All licensed health care practitioners and facilities would be eligible to participate in the program if they: 1) do not accept payment from other insurance providers for services covered by the Trust; 2) agree, in writing, to furnish services without discrimination; 3) do not balance bill patients; and 4) provide information, as requested, to the state for analysis.

• Budgeting and Payments to Eligible Health Care Practitioners and Facilities – Each year, the Executive Director would be required to establish separate budgets for program operations, including payments for services and administrative activities, and capital projects. Additionally, the Director would be required to set reimbursement rates for practitioners. 

• Establishment of the Health Care Trust Fund and Funding Sources – The bill provides that amounts deposited into the Trust Fund would be used to:

• Pay eligible health care practitioners and facilities for covered services provided to eligible individuals; 

• Fund capital expenditures for eligible health care practitioners and facilities for approved capital investments;

• Pay for preventive care, education, outreach, and public health risk education initiatives;

• Supplement other sources of financing for education and training for the health care workforce; 

• Supplement other sources of financing for training and retraining program for workers displaced as a result of administrative streamlining gained by moving from a multi-payer to a single-payer health care system;

• Fund a reserve account to finance anticipated long-term cost increases due to demographic changes, inflation, or other foreseeable trends that would increase Trust Fund liabilities; and

• Pay for administrative costs of the Trust.

Regarding funding sources, the bill states that the Trust would be the repository for all health care funds and related administrative funds. Revenue for the Trust would be generated through a “fairly” apportioned, dedicated health care tax on employers, workers, and residents Payroll taxes would range from 7.5 percent on employers to 2.5 percent on employees. A 10 percent tax on unearned income would also be established. This would replace spending on insurance premiums and out-of-pocket spending for covered services.

Additionally, the bill would require that public spending on health insurance be consolidated into the Trust to the greatest extent possible. To maximize all federal financial support, the Executive Director would be required to seek all necessary waivers, exemptions, agreements, or legislation to ensure that all current federal payment for health care be paid directly to the Trust Fund.

• Implementation of the Health Care Trust – Once the Board and the Executive Director are in place, they would be required to set a general timeframe for establishing the Trust, with a launch date no less than one year and no more than 18 months after the first meeting of the Board. The bill also outlined the following phases of transitioning from the current health care system towards the Trust:

• First Phase of Transition – The Director would be directed to begin: 1) hiring staff; 2) establishing the administrative and information technology infrastructure for the Trust; and 3) negotiating reimbursement lists for health care services, pharmaceuticals, and medical equipment. Health care practitioners would also be required to develop plans for transitioning towards the Trust.

• Second Phase of Transition – The bill states that in the second phase, the infrastructure of the Trust would be established, including appropriate offices. The second phase would also feature training for practitioner staff on systems for processing bills to the Trust, and the introduction of accounting regulation to employers for payment of payroll taxes. Finally, residents of the Commonwealth would receive care identification cards with an explanation of benefits and contact information for their regional office.

• An Act to Ensure Effective Health Care as Right: The bill (S. 758) directs the Center for Health Information and Analysis to recommend a methodology to develop a single-payer benchmark, which would be the estimated total costs of providing health care to all residents of Massachusetts under a single-payer health care system in a given year. The benchmark would be required to consider the following:

• The costs of a single-payer health care system at different actuarial values; and

• Level of cost sharing and provider reimbursement at different actuarial values.

In addition to the methodology for a single-payer benchmark, the Center would also provide an annual report detailing a comparison of the actual health care expenditures in the Commonwealth for 2022, 2023, and 2024 with the single-payer benchmark for 2022, 2023, and 2024, respectively, and must indicate whether Massachusetts would have saved any money under a single-payer health care system. The first report would be due no later than July 1, 2024.

If the report were to determine that a single-payer benchmark would outperform actual total health care expenditures in 2022, 2023, or 2024, the Health Policy Commission would be required to submit a proposed single-payer health care implementation plan, which would include proposed legislation.

Maryland: Single-Payer Commission

Maryland: Single-Payer Commission

Upshot

•  H.B. 610 and S.B 493 would establish a Commission on Universal Health Care tasked with developing a plan for a state universal health care program for all state residents.

• The plan would be required to consider how to incorporate health care equity, reduce health disparities, increase health care access, and advance alternative payment models.

• The legislation died in Committee. This was the legislature’s second attempt at advancing such legislation.

Background

Maryland operates a state-based Marketplace and three insurers offered plans in 2022. The state received approval for a reinsurance program in 2019 and also operates an easy-enrollment program, which allows individuals to enroll in health coverage at the time of tax filing. For the 2022 open enrollment period, 181,000 residents enrolled in coverage.

Notably, Maryland is the only state that operates  a Total Cost of Care Model, which sets benchmarks for Medicare hospital spending and holds the state accountable for meeting targeted saving amounts. Towards a more incremental approach of improving coverage and access, Maryland has also approved legislation to establish workgroups on insurance subsidies for small businesses and on primary care access and quality

Summary

The legislation, H.B. 610 and S.B 493, calls for the establishment of a Commission on Universal Health Care, which would be required to develop a plan for the state to establish a single-payer system that would provide benefits to all state residents. The single-payer system would be designed to advance the following goals:

• Incorporate health care equity as a goal of the plan;

• Reduce health disparities; and

• Increase health care access, particularly in urban and rural setting with limited access.

Additionally, the program would be required to have the following components:

• Accessibility: Provide comprehensive, affordable, and high quality publicly financed health care coverage for all resident of the state in an equitable manner, regardless of income or immigration status;

• Benefits: Include a benefit package covering primary care, preventive care, chronic care, acute care, reproductive care, and hospital services;

• Leverage Federal Funds: Recommend how to ensure that all federal payments provided in the state are paid to the universal health care program through applicable waivers.

• Health Promotion: Contain costs by providing incentives for residents to receive preventive care

• Alternative Payment Models: Contain costs by establishing innovative payment mechanisms to health care professionals and reducing unnecessary administrative expenditures.

The plan would also provide a timeline for establishing the program and plans for how to transition from the current system to the universal health care program. The Commission would propose an operating structure for the Universal Health Care Program and estimate cost projections for the program. An interim progress report would be due by June 1, 2023, and a final plan would be due by October 1, 2024. The intended implementation date of the Universal Health Care Program would be July 1, 2025

Maine: Single-Payer Program

Maine: Single-Payer Program

Upshot

• L.D. 1608, would establish the MaineCare for All Program, which would provide health care coverage to all residents of the states.

• The program would be implemented in four phases. Coverage would be expanded to different income eligibility groups within the state, starting with individuals with incomes above 138 percent FPL but below 200 percent FPL and ending with individuals with incomes above 400 percent FPL.

• The bill primarily relies on the Department of Health and Human Services and the MaineCare for All Implementation Task Force for designing and implementing the program. The Task Force would have been required to submit recommended legislation by January 15, 2022 to fully implement the MaineCare Program.

• During Maine’s two-year session, the bill underwent several work sessions. However, the Committee vote to advance the bill was split and the bill eventually died in Committee. Three Democratic members of the Committee joined the four Republican members to defeat the bill.

Background

Maine transitioned to a state-based Marketplace and offered standardized health plans in fall 2021. This helped contribute to a 10 percent increase in enrollment in 2022. Three insurers offered Marketplace plans in 2022 and a fourth is joining for 2023. The Marketplace also features a merged risk pool for individual and small group plans and the state will implement an easy-enrollment program beginning in 2024. For the 2022 coverage period, approximately 66,000 residents enrolled in Marketplace plans.

Maine has also succeeded in implementing other reforms aimed at improving access and affordability throughout the state. Since taking office, Gov. Janet Mills issued an executive order to expand Medicaid and signed the Made for Maine Health Coverage Act in 2020, which reduced the OOP costs of common medical visits. Recently, the state received CMS approval for a section 1332 reinsurance waiver for the individual and small employer markets through 2027.

Summary

The legislation aims to expand MaineCare, the state’s Medicaid program, to all residents of the state by 2025. The program would include the following features:

• Benefits: The Departments of Health and Human Services, Labor, and Professional and Financial Regulation (the Departments) would be required to design a program to provide the coverage of the services that mirror the EHB categories.

• Payment for Services: The Departments would also design payment rates for covered health services. The program would be required to pay a “reasonable amount” charged for medically necessary emergency health care services and fair rates of compensation with participating providers and organized delivery systems that are commensurate to the services rendered.

• Implementation: The bill would require that the MaineCare Program be implemented in the following four phases over three years:

• MaineCare for All Implementation Task Force: The bill calls for the establishment of the MaineCare for All Implementation Task Force that is responsible for overseeing and implementing the program. The Task Force would have been required to submit recommended legislation by January 15, 2022 to fully implement the MaineCare Program and would have had to include the following provisions:

  • A transfer of responsibility for administering the MaineCare program and CHIP from the Department of Health and Human Services to the MaineCare for All Program and; a transfer of responsibility for administering any other state of federal health program to the MaineCare for All Program. This transference aligns all existing health benefits under the MaineCare for All Program.

  • Apply for all waivers necessary to transfer health care funding from the federal government to the MaineCare for All Program;

  • Establish an ongoing revenue stream to adequately fund the program; and

  • Establish a rate board to oversee the true cost of providing care for all state residents.

Kansas: Single Payer Program

Kansas: Single Payer Program

Upshot

• H.B. 2459 would create the Kansas Health Program, a universal single-payer guaranteed health coverage program for all residents of the state, regardless of immigration status.

• The program would provide coverage for existing benefits included in Medicare, Medicaid, CHIP, and the individual Marketplace plan. Beneficiaries would also be required to enroll with a care coordinator to ensure that beneficiaries are receiving high-value and appropriate care.

• In the Republican controlled legislature, the legislation largely served as a messaging bill towards the need for more affordable health coverage in the state. The bill ultimately died in Committee

Background

Kansas uses the federally-facilitated individual Marketplace, Healthcare.gov. Seven insurers offered plans in 2022, which was a record high for the state. Approximately 107,000  residents enrolled for Marketplace coverage during the 2022 open enrollment period.

Kansas is one the twelve states that has yet to expand Medicaid eligibility to the ACA level of 138 percent FPL. An additional 145,000 residents would become eligible for coverage if Kansas expanded Medicaid. Gov. Laura Kelly included Medicaid expansion proposals in her fiscal years 2022 and 2023 budget requests, but the expansion was not included in the budgets approved by the Republican-controlled state legislature. Additionally, the legislature has failed expand Medicaid in standalone legislation three times.

Summary

The bill, H.B. 2459, would establish the Kansas Health Program to provide all residents access to health care coverage at no cost. Enrollees would have access to the EHBs and would be required to enroll with a care coordinator to ensure appropriateness of services received. Additional details of the program follow.

• Kansas Health Advisory Council and Board of Trustees: The bill would establish a Kansas Health Advisory Council that would be responsible for developing and implementing the Kansas Health Program and would advise the Secretary of Health on matters related to the program. Additionally, the bill calls for the establishment of the Kansas Board of Trustees, which would review, provide feedback, and approve any proposed rules and regulations issued by the Secretary to implement the Kansas Health Program.

• Eligibility and Enrollment and Beneficiary Cost Sharing: Every state resident, regardless of immigration status, would be eligible and entitled to enroll in the program and would not be required to pay a premium, copayment, coinsurance, deductible, or any other form of cost sharing for all covered benefits. To control program costs, enrollees would also be required to enroll with a care coordinator to ensure that beneficiaries are receiving high-value and appropriate care.

• Benefits: Covered health care benefits for enrollees would include all healthcare services that are required to be covered by the following programs, regardless of eligibility for such programs:

  • CHIP

  • Medicaid, including services provided under Medicaid waiver programs;

  • Medicare;

  • Services required under Kansas’ Insurance Statute (i.e., the EHBs); and

  • Any additional health care service authorized to be added to the program’s benefits.

  Existing health insurers would be permitted to cover any services that are not covered by the program but would be prohibited from offering coverage of program benefits. Additionally, the program would be prohibited from requiring prior authorization for any health care services that is more restrictive than what is required under Medicare Parts A and B.

• Payment for Health Care Items and Services: The Secretary would be directed to adopt rules and regulations for payment methodologies for healthcare services and care coordination. Additionally, the methodologies and rates would be required to be “reasonable and reasonably related” to the cost of efficiently providing the healthcare service and assuring adequate and accessible supply of the service.  The Secretary would be required to consider the following factors when determining the payment methodologies: 1) usual customary rates immediately prior to the implementation of the program, as reported by the Commissioner of Insurance; 2) level of training, education, and experience of the providers; and 3) scope of services, complexity, and circumstances of care, including geographic factors. The Secretary and health care provider representatives would be required to engage in good faith negotiations to determine payment rates.

• Waivers and Funding: The Secretary would be required to seek all federal waivers, such as section 1332 and section 1115, state plan amendments, and other federal approvals necessary to operate the program. Pass-through funding secured through the waivers would be used to implement the program.

  Additionally, the governor would be directed to submit to the legislature a revenue proposal, as part of the governor’s budget for fiscal year 2024, that includes a progressively graduated tax on all payroll and self-employed income to finance the program. Individuals with income less than $25,000 a year would be exempt from the increase in taxes. This tax revenue would be deposited in the Kansas Health Trust Fund for program implementation. The revenue plan would need to be approved prior to the implementation of the program.

California: Single-Payer Program

California: Single-Payer Program

Upshot

• For the second time in the past two years, Democratic state legislators failed to advance legislation, A.B 1400, that would establish CalCare, a single-payer health care coverage program for the state’s 39 million residents, despite large majorities in each chamber. Pursuant to a bill requirement, the program would not be implemented until the CalCare Board determines that revenue is sufficient to pay for program costs. 

• CalCare would be offered to all residents at no cost, regardless of immigration status, and require participating providers to accept a prospectively-set fixed global budget for the total number of services provided on an annual basis. The budget would utilize current Medicare rates as the basis for prospective payment rates.

• Legislators estimate that implementing CalCare would cost the state approximately $356.5 billion annually. The state conceded that it would likely need to generate additional revenue, such as tax increases, to support the program. The bill also states that it would leverage existing funding streams from Medicaid and private insurance, which would both be consolidated under the program.

• The bill failed largely due to industry pushback and lack of support from Gov. Gavin Newsom (D). The Governor approved legislation in 2018 to create the Healthy California for All Commission and has since expressed support for incremental reform towards universal coverage.

Background

California operates a state-based Marketplace and 12 insurers offered coverage in 2022. In 2019, the state enacted legislation to create an individual mandate and a premium subsidy program, which both took effect in 2020. Approximately 1.8 million residents enrolled in Marketplace coverage during the 2022 open enrollment period.

Gov. Newsom initially expressed support for a single-payer system when he ran for office in 2017. However, since taking office, the governor has instead shifted his support towards more modest reforms. In 2018, Gov. Newsom signed into law legislation that created a commission to study the single-payer concept and the possibility of pursuing federal waivers to support such a program. The Healthy California for All Commission has convened fifteen meetings and issued reports related to a unified financing system in the state, though such reports have not materialized into concrete policy initiatives. Gov. Newsom has also taken incremental steps towards universal coverage, including expanding Medicaid coverage for all income-eligible residents, regardless of immigration status.

Summary

A.B 1400 would establish the California Guaranteed Health Care for All (CalCare) program to provide comprehensive universal single-payer health care coverage and a health care cost control system for all residents of the state. By July 1, 2024, the CalCare Board would be required to conduct a fiscal analysis to determine whether the program can be implemented and whether revenue is more likely than not to pay for program costs. California residents would also be required to approve a proposition to raise or modify taxes through a ballot measure. The program would feature the following:

• CalCare Board: The Board would govern CalCare and consist of nine voting members with expertise in health care. Members would be appointed by the Secretary of California Health and Human Services. The Board would be required to conduct a fiscal analysis to determine whether the program could be implemented and whether additional revenue is needed to implement the program by July 1, 2024.

• Eligibility and Enrollment and Beneficiary Cost Sharing: Every resident of the state, regardless of immigration status, would be eligible and entitled to enroll in CalCare. Enrollees would not be required to pay a premium, copayment, coinsurance, deductible, or any other form of cost sharing for all covered benefits.

• Benefits: Covered health care benefits for enrollees include all the following categories of health care items and services, and the CalCare Board is authorized to add any item or service to the covered benefits. The program to provide coverage of items and services included under CHIP, Medicaid, Medicare, and EHBs. Covered service categories include the following:

  • Inpatient and outpatient medical and health facility services, including hospital services and 24-hour-a-day emergency services.

  • Inpatient and outpatient health care professional services and other ambulatory patient services.

  • Primary and preventive services, including chronic disease management.

  • Rehabilitative and habilitative services and devices, including inpatient and outpatient care.

  • Oral health, audiology, and vision services.

  • Prescription drugs and biological products.

  • Medical devices, equipment, appliances, and assistive technology.

  • Diagnostic imaging, laboratory services, and other diagnostic and evaluative services.

  • Mental health and substance abuse treatment services, including inpatient and outpatient care.

  • Emergency services and transportation.

  • Necessary transportation for health care items and services for persons with disabilities or who may qualify as low income

• Provider Participation:  The bill details that a health care provider or entity would be qualified to participate as a provider in CalCare if the health care provider or entity furnishes services, is physically located in California, and meets all the following requirements:

• The provider or entity is a health care professional, group practice, or institutional health care provider licensed to practice in California;

• The provider or entity agrees to accept CalCare rates as payment in full for all covered health care items and services;

• The provider or entity has filed with the board a participation agreement; and

• The provider or entity is otherwise in good standing.      

Additionally, participating CalCare providers would not be considered a qualified provider if they contract with other entities to furnish the covered services. While participation is not mandatory, providers would not be permitted to contract with other insurers to furnish medical services if they wish to participate in CalCare.

• Payment for Health Care Items and Services: The Board would be directed to adopt regulations regarding contracting for, and establishing payment methodologies for, the covered health care items and services provided to enrollees by participating providers. The bill stipulates that the payment rate be “reasonable and reasonably related” to all the following:   

• The cost of efficiently providing the health care item and services;

• Ensuring availability and accessibility of CalCare health care services; and

• Maintaining an optimal workforce and the health care facilities necessary to deliver quality, equitable health care.

The bill also provides that an institutional provider’s prospectively set budget for all services, or global budget, would be determined before the start of a fiscal year through negotiations with providers. The Board would take into account the historical volume of services, the actual expenditures of a provider in the most recent Medicare cost report, and in rural areas, the need to mitigate the impact of availability and accessibility of health care services.

The Board would be directed to used existing Medicare prospective payment systems to establish and serve as the comparative payment rate system in institutional provider global budget negotiations. Additionally, the Board would engage in good faith negotiations with health care providers’ representatives to determine rates for fee-for-service payment for health care items and services under CalCare.

• Funding: The Board would be authorized and directed to seek all federal waivers, such as Section 1332 and Section 1115 waivers, and other federal approvals and arrangements and submit state plan amendments as necessary to operate CalCare. The bill would also establish the CalCare Trust Fund to administer the program. The fund would consist of revenue generated through the revenue plan; federal payments received as a result of any waiver; and any other state money that would have been spent on Medicaid, Medicare, or any other state-funded health program. A separate measure was introduced to implement the revenue plan, which would increase taxes on certain businesses and high-earning households.