Oregon Voters Rebuff Single-Payer Measure

Published December 1, 2002

Seventy-nine percent of Beaver State voters on November 5 rejected a plan to have government officials run a health care system for the state’s 3.5 million residents. Measure 23, touted by supporters as “health care for all Oregon,” attracted just 204,082 votes, 21 percent of the total, while 786,768 voters–79 percent–rejected the plan.

“Oregonians’ refusal to become single-payer guinea pigs repudiates those advocates who would take away people’s right to choose their own health insurance,” exulted Donald Young, MD, president of the Health Insurance Association of America (HIAA). “The magnitude of their rebuff should clearly discourage the single-payer special interests from pushing their ill-conceived views of health care in other states and in the Congress.”

But the measure’s supporters claimed to be undaunted by the defeat. Mark Lindgren, campaign chairman of Health Care for All–Oregon, said they would try again in 2004. “It took decades to free slaves and give women the right to vote,” he noted.

Less than a month before the vote, a Portland Tribune poll showed supporters and opponents of the measure split almost evenly, with 25 percent of voters still undecided. Mark Nelson, who managed the campaign against Measure 23, considered the poll a reflection of the public’s general frustration with rising costs and decreasing control over their health care.

Nevertheless, on Election Day voters said they were not ready to take a chance on sweeping change. “I think people are concerned about access to health care and the cost of health care, but they don’t want to throw the baby out with the bath water,” said Nelson. “They see a system they believe needs to be constantly reformed and modified, but not by throwing it entirely out the window.”

HIAA’s Young touted the Oregon results as an endorsement of free-market health care and rejection of government interference in health care decision-making. “The voters of Oregon decided overwhelmingly that private health insurance, offered primarily through the workplace, gives people better access to quality medical care, as well as greater control over the health decisions affecting their families, than would the government-run, one-size-fits-all proposal resoundingly rejected at the polls.”

Red Ink Likely

Measure 23 would have created a state government-run health plan covering 100 percent of Oregonians’ “medically necessary” health care costs, requiring of them no deductibles and no out-of-pocket payments. Prescription drugs, preventive care, mental health services, long-term care, dental and vision care, and many alternative therapies would have been fully covered.

The proposal’s operating fund would have been financed by a personal income tax increase capped at 8 percent and employer taxes assessed at 11.5 percent of payroll; redirection of current state and federal funding for Medicare and Medicaid to the single-payer plan (a diversion never approved by the Centers for Medicare and Medicaid Services); and elimination of the state workers’ compensation system.

According to research conducted by the Legal and Economic Consulting Group in Wayne, Pennsylvania, the Oregon plan would likely have led to increased taxes, substantially higher medical costs, and fewer health benefits than most Oregonians now enjoy, a result of cost-containment measures sure to be employed.

The study, commissioned by the American Association of Health Plans (AAHP), estimated the Oregon single-payer proposal would have required additional annual revenues of $14.5 to $21.4 billion over and above current state expenditures on health care–some $4,000 to $5,900 per individual and $10,000 to $15,000 per household.

The payroll and income tax increases permitted under Measure 23 would have raised approximately $11 billion–creating an estimated shortfall of at least $3.5 billion. The shortfall, according to the consulting group, could have been as much as $10 billion if higher payroll taxes caused some businesses to reduce investment in the state and some citizens to relocate to lower-taxed states.

Clinton Deja vu

Notwithstanding the Legal and Economic Consulting Group’s analysis, Measure 23 was endorsed by government and private-sector labor unions, senior citizen lobbying organizations, community activist groups, and representatives of the Democratic and Green Parties … not only in Oregon, but also from Washington, California, and as far away as Massachusetts. All saw the Oregon measure as an important foot in the door for single-payer health care.

Dr. Harvey Frey, director of the Health Administration Responsibility Project in California, urged his members to send money to the campaign regardless of whether they lived in Oregon.

In July, a single-payer advocacy group called Health Care 2000, headquartered in Washington state, voted to change its name to Health Care for All–Washington, aligning themselves with Health Care for All–Oregon and Health Care for All–California. The groups have joined Health Care Is a Right, a national coalition planning a March 2003 conference to explore launching a ballot initiative advocating universal health care in the city of Seattle.

Single-payer proponents, silent for nearly a decade, believe the political landscape may have changed substantially since former President Bill Clinton’s Health Security Act was rejected in 1993. Going into the November 5 election, supporters of Measure 23 in Oregon felt that even if it failed to pass, a “good showing” could provide the momentum needed to pursue additional efforts on the state and federal levels.

It would be difficult, of course, for all but the most ideological supporters of single-payer health care to see the November 5 results as a “good showing.” Health Care for All’s Lindgren did his best in “post-election thoughts” posted on the group’s Web site, noting “Our campaign has given fresh hope and excitement to health care activists around the U.S.”

Blaming Markets

Oregon’s advocates of socialized medicine, like their counterparts in other states, blame “market failure” for rising health care costs, the loss of patients’ rights, waste, and fraud. But many experts say previous government interventions, similar to those now being proposed, are largely responsible for the current dysfunctional health care market.

Over the years Oregon passed benefit mandates and regulations that have crippled the private health care marketplace. The state’s patients’ bill of rights law, mental health parity law, guaranteed issue and community rating laws, and hundreds of unfunded benefit mandates have made Oregon one of the most over-regulated health care and health insurance markets in the nation.

This toxic regulatory climate has driven many private insurers out of the state and encouraged many people to remain without health insurance until they need it. This has caused health insurance premiums to soar, resulting in some 400,000 uninsured citizens.

Leap of Faith

Supporters of socialized medicine also face a task made more difficult by growing public awareness of the idea’s failure in other countries. Canada and England have long waiting lists, limited access to new technology, and weak domestic pharmaceutical industries. They are now moving to privatize their health care systems.

Members of Health Care for All–Oregon claim with sufficient funding, their state can do what other countries have never done before: socialize the cost of health care without needing to impose price controls and other kinds of rationing.

At best, the single-payer system would have resembled the managed care system Oregonians say they hate, but without the innovation and accountability that come from competition. At worst, their plan would resemble Medicare, which seniors rightly complain about all the time.

“Oregonians made the right choice by rejecting a single-payer system,” said Twila Brase, president of Citizens’ Council on Health Care, a Minnesota-based policy organization. “The approval of a government health care system for all citizens would have signaled the beginning of health care rationing to all citizens. Rationing is implicit in any government health care system. One need only look at Medicare, America’s single-payer system for senior citizens,” she warned.

Conrad F. Meier is managing editor of Health Care News.