The simple answer to this question is no, Obamacare is not a single payer system. Once you understand what a single payer system is, it’s easy to see that the Affordable Care Act (ACA), or Obamacare, does not fit the mold. A single payer system, in the most basic terms, consists of a single entity responsible for collecting fees and paying for healthcare costs. In the case of a government entity acting as the “payer”, such an entity would collect healthcare fees from all citizens, likely through taxation, and then pay doctors and hospitals for services rendered. Obamacare does not manage health insurance payouts – it merely seeks to regulate health insurance providers.
If you need an example of a single payer system, just look to our neighbors to the north. Canada’s national health program requires higher taxes from all citizens, but delivers “free” healthcare to all. Because the government pools funds and pays all healthcare providers, administration is reduced, costs are controlled, and affordable healthcare is, shockingly, affordable. Although Obamacare was designed to provide affordable health insurance options for all Americans, healthcare costs in the U.S. remain the highest in the world. Until we adopt a truly universal healthcare system this is likely to remain the case.
That said, most Americans would balk at the notion of virtually doubling taxation to pay for healthcare, even if it meant they could stop paying insurance premiums, deductibles, copays, and other related expenses. The average income tax in Canada is estimated at over 40%, while people in some parts of Canada (namely Quebec) pay more than 50%. Can you imagine giving up more than half of your earnings just to gain access to healthcare services? Most Americans would say no. And yet, we would never have to worry about how to pay for long-term medical costs, for example, as we would be provided all necessary care. It’s a complicated issue, to be sure.
To date, however, the U.S. has not adopted a universal, single payer system. Our healthcare system is comprised of numerous “payers”, i.e. health insurance providers. Citizens may select insurance providers and policies not only through the healthcare marketplace, but also through private channels. Or they can get insurance as a benefit through their place of employment. When services are rendered, doctors and hospitals must file claims with whichever insurance companies cover the patient. Not only that, but patients themselves may be on the hook to pay some portion of their medical costs, and some people carry multiple insurance policies, which could increase the number of payers on a given claim.
In short, there’s no mistaking Obamacare for a single payer system. It is unlikely that a single payer system for healthcare will evolve in the U.S. any time soon. Not only is the public hesitant to adopt such a system, but it would also throw the entire healthcare industry into turmoil, potentially eliminate countless jobs, and cost the country a lot of money before any payoffs were realized. In short, we’re just not ready.
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