Should DSA support Washington State I-1600 (state single-payer)?

Andrej Markovčič
Mar 12, 2018 · 5 min read

Like almost any effort to provide better healthcare to more people, I-1600 has an admirable goal. Unfortunately, there are a number of reasons Washington State DSA chapters should not support this initiative.

Structural Constraints

In a nutshell, I-1600 proposes to create a statewide single payer system by redirecting federal funds provided to the state for various healthcare programs such as Medicaid and Medicare into a trust fund and then using the revenue from that fund (as well as fees and taxes) to cover all state residents. This is at best a short sighted idea.

Entitlement programs like Medicaid are counter-cyclical. When the economy takes a nosedive, people lose their jobs, have less money, and as a result qualify for and enroll in such programs. The federal government can absorb these costs because, unlike our state government, which has a balanced budget requirement, the federal government can effectively deficit spend as much as it needs. Since it can print its own sovereign currency, it is able to pump money into the economy during an economic recession.

In an economic downturn, WA would be hit with a wave of people signing up for this state plan. Since the state would no longer be directly disbursing federal funds to healthcare providers as before, but rather relying on investment income from the state health fund, the funding for this state plan would be dependent on market conditions. Ultimately what you would see in a time of economic crisis is a rise in the program cost compounded by a drop in program funding. This ties the provision of an essential human right to the precarity of the private markets, precisely the model from which we are trying to break free.

It is additionally worth noting that it is extremely unlikely that any cost saving measures could be achieved through scale. The federal government is still prohibited from negotiating over drug prices. If this plan anticipates bundling together federal Medicare and Medicaid funds into a single program, we shouldn’t expect pharmaceutical companies to simply roll over and allow us to bargain with them.

Finally, I-1600 assumes that the federal government will simply cooperate. It asks them to give WA state all the money they have been paying to various healthcare programs and allow the state government to determine its own criteria for who would qualify instead of following federal guidelines. Barring any legislative changes on the federal level, expecting the federal government to go along with this seems at minimum incredibly optimistic. But if we are expecting to be able to exert that much pressure on the federal government, why compromise on our existing and superior goal of a national single-payer system?

Does it fit with Medicare For All?

Setting aside the problem of how the initiative aims to finance the program, how does it compare to the demands of DSA’s national Medicare For All campaign? The 5 planks of the campaign are:

A Single Health Program — Everyone will be covered by one health insurance program, administered by the federal government, and have equal access to all medical services and treatments.

Since this is a state bill it will obviously not result in everyone being covered by the federal government. But considered proportionally, how does it stack up? This bill would not cover everyone because it is not a single-payer system. What is being proposed is a public option available to all residents and eligible non-residents (more on that later). This would exist alongside private insurance.

Comprehensive Coverage — All services requiring a medical professional will be fully covered. You go to the doctor of your choice. Dental, vision, mental health, and pharmaceuticals are all included.

The initiative does rightly require that all the above services are included.

Free at the point of service — All healthcare costs will be financed through tax contributions based on ability to pay: no copays, no fees, no deductibles and no premiums. Ever.

On this point the initiative sadly but predictably veers off course. The insufficiency of the healthcare fund alone requires that additional funding sources be found for the state health program. These include taxes on income, capital gains, and payroll. Additionally the program establishes means-tested (meaning income dependent) premiums and cost-sharing.

The reason DSA is taking a stand against means testing is that it immediately and unnecessarily splits the working class. Just like with Medicaid and other means-tested programs today, some will qualify receive subsidized coverage because they are 1% below the qualifying threshold, while those 1% above it receive nothing. This leaves room for those who are only marginally above the income cap to resent those receiving a “free handout” that they themselves are not technically qualified for, despite fully deserving.

It’s not clear that this plan is truly affordable to workers if those just above the annual income threshold (currently $24,120) are required to pay up to $200 per person per month. We want a system that is fully funded through our collective (income based) tax dollars. Then when you go to the hospital you can leave your wallet at home.

Universal Coverage — Coverage for all United States residents — non-citizens included.

I-1600 states that all residents will be covered, but makes no specific provision for non-citizens. It states that the board of trustees will define “eligible nonresidents,” but only provides a limited enumeration of eligible categories.

Jobs — A jobs initiative and severance for those affected by the transition to government-run healthcare.

The bill provides no provisions for job transitioning. On the one hand, since the bill is not a full single-payer system but only a public option, it’s not as critical to include. On the other, if we’re not expecting and preparing to replace the private insurance industry why are we urging people to vote for this initiative?

But it’s better than nothing, right?

As stated above, the authors clearly have the right intentions in mind, but this initiative comes up short. Even under the most wildly optimistic predictions it’s hard to imagine that it will be financially self-sufficient, the fiscal barriers to state single-payer are frankly insurmountable. But even if we grant that it could be financed at a reasonable level, the lack of true universal coverage and the inclusion of means-tested out of pocket fees and cost-sharing means that it is at best a tweak on our existing system. It will retain all the political vulnerabilities that we see in Obamacare; vulnerabilities that can only be fully overcome by a truly universal, free at point of service, federal single-payer healthcare system.

Despite those shortcomings the fight to win this plan would still be monumental; the insurance industry would fight it tooth and nail. In the event that we are able to win this initiative, what then? We would be saddled with the responsibility for a doomed program that will likely only dampen public enthusiasm for single-payer healthcare. As socialists, we must move beyond good intentions and ensure that the programs we put forward are both politically and administratively sound; this initiative fails on both counts.

If you want to get involved with DSA’s Medicare for All Campaign sign up here: https://medicareforall.dsausa.org/volunteer-signup

    Andrej Markovčič

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