As many report, the ACA is suffering because of the lack of providers and funding.  Actual plans marketed by the exchanges are getting more expensive and serve primarily as catastrophic insurance.  Employers, driven by the limited qualified labor market, have to offer better healthcare options to employees due to attraction and retention efforts, but even those efforts have limitations as costs are rising for the employer.

The CEO of Aetna, Mark Bertolini, has recently suggested that the time is ripe to have a public debate about single-payer health systems.  "Single-payer, I think we should have that debate as a nation," Bertolini said in the meeting with employees.  Aetna has decided to pull out of the ACA marketplace because the costs of doing business on the exchanges are a major loss to the company.

So what does it mean to have a single payer system?  Is it truly the Medicare for all approach that Senator Sanders advocates?

Not necessarily so.  There are multiple versions of single payer models.

Single Payer Model
With this model the providers of health care are largely private, and the government is the payer.  The national insurance plan collects the money, generally a mix of taxes and premiums from users.  When services are incurred, the government pays the medical bills.  This model is used by Canada and Taiwan and is the approach advocated by Senator Sanders.

“Sickness Funds” or Bismarck Model
With this model, national insurance is funded by payroll taxes.  The insured have a copay and can purchase secondary insurance for things like private rooms, etc.   All insurance companies (sickness funds) are non-profit and regulated by the government.  Anyone with a pre-existing condition is covered and cannot be dropped as well as anyone who experiences a major illness.  Health providers and hospitals are mostly private entities.  This model is used by Germany.

Beveridge or “Socialized Medicine” Model
Patients do not incur any medical bills.   Medical care is treated as a public service like public education or fire department services.   The government owns the hospitals, and specialist doctors would generally be employees of the government.  Primary care physicians would be private, but bills would be paid by the government.  They can earn bonuses for keeping their patients as healthy as possible.  England uses this model.

In other countries, there is a mix of state and private insurance available to the people.  In these situations, the country’s insurance will cover the majority of healthcare, but the people can purchase private insurance to supplement, especially in cases where the public insurance has limitations on payment.  France is an example of this approach. 

Employer provided healthcare in the U.S. will not likely go by the wayside.  A single-payer system may help smaller employers, especially in controlling costs, but the labor market will likely dictate the direction employers will have to take with the healthcare benefit.  Private insurance will likely be offered in order to attract and retain talent, unless the law provides otherwise.  A 2015 Employee Benefit Research Institute (EBRI) study confirms this approach.  Millennials especially like employer healthcare but want more control over choices.  A single payer system may not check their boxes. 

Therefore, future U.S. healthcare will probably be a mixed model of single payer and employer provided healthcare.  With other forces impacting HR, employer provided healthcare may not look as it does today.  The reality of today’s workforce – with less doing more and less HR support – will likely force the outsourcing of healthcare administration.  A private exchange approach, although it has not caught on, could be key to meet millennial expectations, while controlling costs and making administration easier for employers.

Source: CNBC 5/16/17, EBRI 5/16/2017, Washington Post 4/28/17, Healthcare for All Texas