Oregon and Single-Payer

ClintonCare is back and coming on strong in Oregon.

Oregon voters will decide by November 5 whether to scrap their multi-faceted health care financing system and replace it with a “single-payer” plan in which all the money spent on health care would be centrally collected and distributed by state authorities.

The rhetoric of single-payer advocates is extraordinarily appealing, promising free health care for everyone, from acupuncture to brain surgery, massage therapy to prescription drugs.

No premiums, no copayments, no deductibles. And no incentives for Oregonians to moderate their use of the system: All health care, all the time. All free.

Nirvana? The Oregon plan sounds too good to be true – and it is.

It is inevitable that providing something “free” to all citizens will dramatically increase demand. Higher demand will put more financial strains on the system with predictable results: taxes will rise and services will be cut.

Our Canadian neighbors demonstrate what happens: waiting lines for diagnostic tests and surgery, limited access to the latest technologies, and higher and higher taxes.

In fact, a study by LECG consulting, released last week by the American Association of Health Plans, found that every Oregon resident would pay an additional $4,000 to $5,900 if the new system were implemented.

Nonetheless, the measure has been gaining support in Oregon, with the latest Portland Tribune poll showing a statistical dead heat – 36% in favor, 39% opposed, and 25% undecided. Since Oregonians vote exclusively by mail, many of the ballots already are in.

Tax the rich: The organizers admit there would be big tax increases on companies and affluent citizens to pay for the Oregon Health Plan. Employers would pay an additional 11.5% payroll tax. Individuals would pay up to 8% more in state income taxes.

Advocates have said savings on insurance premiums and out of pocket costs would offset the higher taxes. This is clearly refuted by the LECG study.

Extraordinary powers: The power of the proposed Health Care Finance Board would be awesome. It would decide what “medically necessary health services” would be allowed, would negotiate fees with medical professionals and hospitals, and would be required to keep spending within a fixed global budget.

The board would have more spending authority than the rest of Oregon’s state government combined. LECG says the plan would cost up to $28 billion in its first year, compared to the overall state budget of $16 billion.

With some elected and some appointed members, the decisions about what to cover and how much to pay would inevitably be motivated by politics rather than science. The board would be pressured to cover everything and pay next to nothing, driving physicians out.

Insurers would flee: The plan also would effectively end private health insurance since companies would be prohibited by law from making a profit.

In one of the death knells to the Clinton health plan in 1994, people realized they would lose their good, private coverage for the unknown of a centrally-controlled system. The same would happen in Oregon.

In a bold move to secede from Medicare, the state would seek a waiver to collect all of the money that Medicare would pay for medical care for Oregon seniors and put it into the central fund. Seniors citizens would lose Medicare as they know it, replaced by the new Oregon system.

Oregon’s single-payer plan would put the state’s health care system on the critical list and, in the name of freedom and progress, should be defeated.

Grace-Marie Turner





Grace-Marie Turner is president of the Galen Institute, a public policy research organization that advocates consumer choice and freedom in health care. She can be reached at P.O. Box 19080, Alexandria, VA, 22320 or galen@galen.org.

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ClintonCare is back and coming on strong in Oregon.

Oregon voters will decide by November 5 whether to scrap their multi-faceted health care financing system and replace it with a “single-payer” plan in which all the money spent on health care would be centrally collected and distributed by state authorities.

The rhetoric of single-payer advocates is extraordinarily appealing, promising free health care for everyone, from acupuncture to brain surgery, massage therapy to prescription drugs.

No premiums, no copayments, no deductibles. And no incentives for Oregonians to moderate their use of the system: All health care, all the time. All free.

Nirvana? The Oregon plan sounds too good to be true – and it is.

It is inevitable that providing something “free” to all citizens will dramatically increase demand. Higher demand will put more financial strains on the system with predictable results: taxes will rise and services will be cut.

Our Canadian neighbors demonstrate what happens: waiting lines for diagnostic tests and surgery, limited access to the latest technologies, and higher and higher taxes.

In fact, a study by LECG consulting, released last week by the American Association of Health Plans, found that every Oregon resident would pay an additional $4,000 to $5,900 if the new system were implemented.

Nonetheless, the measure has been gaining support in Oregon, with the latest Portland Tribune poll showing a statistical dead heat – 36% in favor, 39% opposed, and 25% undecided. Since Oregonians vote exclusively by mail, many of the ballots already are in.

Tax the rich: The organizers admit there would be big tax increases on companies and affluent citizens to pay for the Oregon Health Plan. Employers would pay an additional 11.5% payroll tax. Individuals would pay up to 8% more in state income taxes.

Advocates have said savings on insurance premiums and out of pocket costs would offset the higher taxes. This is clearly refuted by the LECG study.

Extraordinary powers: The power of the proposed Health Care Finance Board would be awesome. It would decide what “medically necessary health services” would be allowed, would negotiate fees with medical professionals and hospitals, and would be required to keep spending within a fixed global budget.

The board would have more spending authority than the rest of Oregon’s state government combined. LECG says the plan would cost up to $28 billion in its first year, compared to the overall state budget of $16 billion.

With some elected and some appointed members, the decisions about what to cover and how much to pay would inevitably be motivated by politics rather than science. The board would be pressured to cover everything and pay next to nothing, driving physicians out.

Insurers would flee: The plan also would effectively end private health insurance since companies would be prohibited by law from making a profit.

In one of the death knells to the Clinton health plan in 1994, people realized they would lose their good, private coverage for the unknown of a centrally-controlled system. The same would happen in Oregon.

In a bold move to secede from Medicare, the state would seek a waiver to collect all of the money that Medicare would pay for medical care for Oregon seniors and put it into the central fund. Seniors citizens would lose Medicare as they know it, replaced by the new Oregon system.

Oregon’s single-payer plan would put the state’s health care system on the critical list and, in the name of freedom and progress, should be defeated.

Grace-Marie Turner





Grace-Marie Turner is president of the Galen Institute, a public policy research organization that advocates consumer choice and freedom in health care. She can be reached at P.O. Box 19080, Alexandria, VA, 22320 or galen@galen.org.

SHARE THIS ARTICLE

About the author