Our American healthcare system is very large and very complicated. So let’s break it down a bit into some component parts.
One aspect to consider is who owns the entities that are arranging for the payment of healthcare delivery. We talk a lot about moving to a single payer system, but what does that actually mean?
Today let’s look at the major payers in our American system and rank them according to how “socialist” they are:
Veterans Administration. This system is most similar to the United Kingdom’s national health service. The Veterans Administration owns and operates about 170 hospitals and 1000 clinics across the United States, and it employs all the doctors and nurses and other medical professionals who deliver healthcare to around 9 million people. So in this case, there’s a single payer and a single provider of healthcare to veterans. In recent years there have been efforts to privatize this system or somehow develop a hybrid public-private version, in particular after complaints about wait times to get healthcare services.
Medicaid (Medi-Cal) in California. In this system, there is still a single payer (the states, using federal dollars combines with state dollars, depending on the programs that get wrapped into each state’s Medicaid program). However, healthcare is provided by a wide range of public, non-profit, and private facilities and individuals. Nearly half of Medicaid dollars are spent on nursing home care for the elderly.
Medicare. Medicare is a hybrid system, when it comes to who pays. It is funded by workers (through a 1.45% payroll tax plus 0.9% for highly compensated employees) and employers (an additional 1.45% payroll tax), through insurance premiums for some parts of Medicare, and through deductibles and co-payments. In addition, Medicare Part C allows private insurance companies to provide policies that integrate the basic aspects of Medicare with supplemental insurance plans that provide more services. Insurance companies provide much of the administrative services, and healthcare services are provided on a fee-for-service basis by a wide range of public, non-profit, and private facilities and individuals.
Private and Employer Health Insurance. Large and medium sized companies and many unions negotiate with private insurance companies to purchase health insurance for their employees (and often employee family members) as an optional part of the benefits package offered to employees. The costs are born by the employer or union (typically 50-80%) and by premiums, deductibles, and co-payments paid by employees. This system operates completely within the private sector. The Affordable Care Act added onto this system an option for people not covered by employer plans to purchase insurance through government-negotiated rates and plans, known as healthcare exchanges. There are also a number of tax incentives set up to help people reduce the cost of healthcare through private insurance, like health savings plans and the ability to deduct the cost of healthcare from your earned income if it exceeds a certain amount.
No insurance. There are still 28.2 million people in the United States that do not have health insurance. They pay all their medical costs from their own budget.
Back to single payer - it’s going to take a lot of work to take all these systems and convert them all into one system where there is a single government agency who pays the costs. There are also a lot of questions about how much that government agency will pay, and how much we individuals will pay. We’ll tackle more of those questions tomorrow.
This post is sponsored by Marty Walters for Congress, FEC ID C00639732
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Let’s look at our American healthcare system and how our doctors, hospitals, and medical staff get paid for their work. If you’ve been following my healthcare discussion, you’ll know it’s complicated.
1. Veterans Administration. Most of the services provided by the VA for veterans is delivered through government-owned facilities, so the cost of the services is the same as the fees for the services - the federal government assumes all the costs. However, the VA has outsourced some of its services to the private sector, and in those cases the federal government reimburses those facilities and doctors at a negotiated rate. This kind of payment is known as fee-for-service, which we’ll be talking a lot about in this post.
2. Medicaid. Medicaid programs are designed to support low-income Americans, and all the costs are assumed by the federal government and the state government (for certain elements of the program). In contrast to the VA, Medicaid operates completely on a fee-for-service basis. The federal government establishes reimbursement rates for every kind of healthcare procedure you can imagine, and doctors cannot charge more. They get reimbursed just for that rate. That’s one reason why a lot of doctors choose not to treat Medicaid patients - they feel the reimbursement rate is too low.
3. Medicare. Medicare is an insurance program funded partially by payroll taxes and partially by program participants, and it also operates completely on a fee-for-service basis. The reimbursement rate for those services are set by the federal government, and doctors can choose whether they want to accept Medicare patients. But in addition to that reimbursement, most Medicare services also come with a co-payment, for example 20 percent for doctor visits, that’s paid directly to the doctor by plan participants.
4. Private Insurance. Employers and the ACA Healthcare Exchanges provide health insurance by private companies, who each negotiate with hospitals and doctors to set fee-for-service rates. Like Medicare, most of these plans also include a co-payment that’s paid directly to the provider by the patient. It can be extremely difficult to find out what the actual costs are for medical services, because there are so many different negotiated rates. And beware going outside the network of approved doctors within your insurance network! That can lead to a lot of extra costs for patients.
5. No Insurance. People who are paying for healthcare out of pocket don’t have the negotiating power of the federal government or large insurance companies to help get the best cost, so they are often stuck with the “list price” for healthcare that may not have a lot to do with the actual cost of the service they are getting. The list price may be artificially inflated just to make it look like big insurance companies are getting a big discount. And these prices can vary hugely from place to place.
One thing all of these programs have in common is that patients often have to get permission from the payer for a procedure or operation, especially when it’s an expensive service. This often leads to a complicated process of making judgments about the efficacy and necessity of various procedures or drugs, which can be frightening and frustrating for patients.
Vox.com’s healthcare team that includes Sarah Kliff has been spending years looking into healthcare costs, and they’ve found that not only is healthcare more expensive in the United States compared to other countries, but there is also huge variation in prices charged.
https://www.vox.com/a/health-prices
Moving to a universal healthcare program in the U.S. will eliminate a lot of the administrative costs that are involved in making our complicated payment system work, and it will allow all people access to similar services and quality. The key is to ensure that we make that move without compromising the programs that protect our most vulnerable people, like disabled children, elders in nursing homes, and veterans that have unique and often expensive healthcare needs.
This post is sponsored by Marty Walters for Congress, FEC ID C00639732
Support my campaign by donating at https://secure.actblue.com/contribute/page/martywalters

There’s been a lot of talk recently about healthcare for veterans, so I thought it would be helpful to know that it’s not just a single program administered by the Veteran’s Administration.
Veterans include all military service members who served and were not dishonorably discharged. Within that broad category there are also war veterans and combat veterans. As you can imagine, the healthcare needs for this large group of people are wide-ranging. Recently returning combat troops often have complex healthcare and recovery needs that require an intensive level of treatment, and one complaint is that the transition from the military’s medical system to the veteran’s system is too abrupt and can lead to worse outcomes. Veterans from older generations may have very different needs.
Many of us are surprised to learn that many veterans are enrolled in Medi-Cal and Medicaid programs. That’s because healthcare services provided by the Veteran’s Administration are provided on the basis of need as connected to military service; it’s not a full service kind of program. Tri-care is a private health care insurer that provides insurance services to the military active service members and their families, and there have been proposals to merge Tri-care and the VA healthcare system.
Stepping back from all the complexity, we can see that veterans are facing many of the same challenges that the rest of us are in finding quality health care and being able to pay for it, but they often have additional physical and behavioral health challenges arising from their military service. We need to fix healthcare access for all our residents, and we need to protect the special programs that help our veterans integrate back into civilian society and live long and healthy lives.
Here in California’s First Congressional District, we have more veterans as a proportion of our population than anywhere else in California. I’m committed to considering veterans issues in every aspect of policymaking in Congress, with healthcare being one of the most important.
Read more below:
https://www.military.com/…/veterans-health-care-overview.ht…
https://www.pbs.org/…/veterans-affairs-exploring-idea-of-me…
First published December 7, 2017.
This post is sponsored by Marty Walters for Congress, FEC ID C00639732
Support my campaign by donating at https://secure.actblue.com/contribute/page/martywalters