Former CMS administrator Don Berwick is running for Governor in Massachusetts. He has an uphill battle in the ever growing primary for the Democratic nominee. Yet his controversial tenure in DC, his pursuit of the Corner Office in the state that birthed RomneyCare (a state that is home to some of the best medical research institutions in the world), and his devoted following on the left — all grant extra weight to his comments on healthcare.
Berwick’s campaign released his platform on healthcare for the Bay State last week. Even with little detail, it served to reinforce many of the charges critics have levied against him for years, mainly that he desires a single-payer system in America. As he distances himself from the “staff-level” dire implementation of his “majestic” ACA, one has to wonder why he would advocate for a government takeover of healthcare at this time.
His proposal should be seen in light of the makeup of Democratic primary voters in the state, and should only serve to open the Pandora’s box that are the policy logistics of a single-payer system being run at a state-level. Any other single-payer conversation is similar to discussing the merits of the shiny outside of a new car without looking under the hood where there is no motor.
HealthCare Remains a Huge Issue in Massachusetts
The race for Governor includes two doctors (Berwick and Joe Avellone), a lawyer that worked for a healthcare company (Evan Falchuk) a former health insurance executive (Charlie Baker), and an Attorney General (Martha Coakley) that has been very involved in healthcare discussions in the state.
Healthcare accounts for almost 20 percent of the state’s GDP, and employers spend the most for insurance in the country. Massachusetts is home to multiple medical schools, and the state is first or second for research and investment dollars spent in the medical device industry. The state spends over 40 percent of the budget on healthcare related programs.
The state has a history of tinkering in health policy, and more recently the legislature has passed major healthcare bills every two years since 2006, most recently culminating in a “cost-containment and payment reform” law in July of 2012 that sets a growth gap on the industry, and puts in place many bureaucratic bodies to “fix” healthcare.
Single-Payer Advocates Are Pushing Hard in the State
Ballot questions in support of single-payer have started to pop up across the state moving from the liberal west, eastward. An amendment to set up a single-payer commission, received 15 votes in the State Senate last session, surprising many including the Senate President. She had to adjoin the session to twist some arms to make sure it did not pass (20 votes are needed to pass). However, the leading candidate to be the next Senate President voted in support of the bill, and while there has been no vote held in the House yet, almost 20% of members are listed as co-sponsors on single-payer legislation.
The Massachusetts Democratic Party has endorsed a single-payer plank in its platform, and Berwick is the highest profile candidate to endorse single-payer.
How Do You Run A Single-Payer System At the State Level?
Supporters of single-payer often call it “Medicare-for-all,” which would make sense if this happened at the federal level, but is less clear how you would set up such a system at the state level.
First, the federal government would need to grant waivers for all programs that use federal money. Without federal waivers, the plan is dead. The waivers required range from Medicaid to the tax credits that were targeted for those buying insurance in an exchange. However, if the Administration approves these waivers, they should be approving any Medicaid waiver coming in from other states as well. This could become a national political issue quickly. Given the strings that are already attached to funding in Medicaid, a “jointly run state-federal” program, this would be a big change. In addition, the feds would be turning over the administration of the Medicare program to the state level as well.
Many single-payer proposals in Massachusetts advocate for matching federal funds to finance such a program. This would increase the overall federal dollars spent in the state as it would replace billions spent by fully-insured employers. Would the Republicans in Congress approve this?
Secondly, self-insured companies (companies who hold all the risk for their employee’s health costs) are not regulated by state law, but by the Employee Retirement Income Security Act (ERISA) federal law, so a single ayer system would need these employers to optin to such a system. Currently, 53% of covered employees in Massachusetts work for self-insured companies. In other words, for a successful single ayer system, every large employer would need to optin, or the state would be running a parallel health care system. Or a much worse outcome could be that companies simply leave the state, taking jobs with them.
Finally, Massachusetts would need out f-state hospitals and governments to work with the Commonwealth, to agree to the conditions that Massachusetts sets out for payment rates and for reimbursing care received in the Bay State by the other states’ residents. This might be a challenge given the political and budgetary realities of the other states in New England, but would be a necessity given how small the region is, and how common it is to receive care in your non-home state for those who live in border states.
As you can see, even just scratching the surface of this issue appears to raise a number of non-sequitur questions that Berwick will need to answer on the campaign trail. The Massachusetts media is likely to instead focus on his progressive vision for the state, instead of asking these practical questions. Let’s hope his fellow Democrats push the issue during the debates, so voters get more information about Berwick’s vision for the future of their healthcare.
For more information and questions about the current proposal for single-payer in Massachusetts, read here.
Josh Archambault (@josharchambault) is a senior fellow at the Foundation for Government Accountability and Pioneer Institute.