Can Oregon Launch Universal Health Care in the U.S.?

Takeaways

• Oregon is seeking to establish a statewide, single-payer health care system after Vermont failed in its attempt.
• The state is moving slowly and carefully, setting up a board to design the system. This includes figuring out how to include Medicare users and how to pay for it.
• A single-payer system means everyone gets coverage, administrative costs are lower, and there are no out-of-pocket expenses for services. This would be especially helpful for older adults on Medicare.
• Problems still exist, such as how to fund the system with fair taxes, how to set equal payment rates for providers, and how to handle the political challenges of getting rid of private insurance.

Fourteen years ago, Vermont came closer than any U.S. state to creating a single-payer health care system, where one public agency handles health care financing for all residents. In 2011, Vermont lawmakers signed Green Mountain Care into law with the promise of universal coverage and streamlined administration. However, the state never fully implemented it and abandoned its efforts to establish a single-payer system in 2014.

Part of the reason was that financing the system required payroll taxes and assessments so steep that state leaders concluded it would harm small businesses, workers, and the broader economy. Another reason Vermont’s Green Mountain Care plan failed is that doctors and hospitals would have to accept lower payments, which they opposed.

In 2022, Oregon’s voters passed a measure that amended its state constitution to guarantee affordable health care as a fundamental right for every resident. Now, its lawmakers are cautiously attempting to do what Vermont could not – achieve a universal health care plan.

In 2023, they created the Universal Health Plan Governance Board to design a publicly funded single-payer system for the state. The board is expected to deliver a proposal by September 2026, with possible implementation around 2030. The timeline reflects a more deliberate approach, one that acknowledges Vermont’s mistakes and the political and fiscal realities of building a new system from the ground up.

Lessons From Vermont

Vermont’s short-lived experiment demonstrated both the allure and the pitfalls of single-payer reform. On the one hand, Green Mountain Care promised universality and efficiency; no resident would be uninsured and the system would replace a patchwork of private insurers with a single financing mechanism. On the other hand, the projected cost of running the program exceeded expectations. Federal support was smaller than anticipated, and the tax burden needed to fund the system was untenable.

Oregon’s More Cautious Approach

Oregon appears to have internalized lessons from Vermont’s attempt. Instead of rushing toward an implementation date, it is building the system’s design step by step. The state convened a Joint Task Force on Universal Health Care, which concluded in 2022 that a single-payer model could improve access and reduce costs over time. But rather than move directly to legislation, Oregon set up a governance board tasked with mapping financing strategies; studying the potential effects on employers, individuals, and families; and working out provider reimbursement rates.

This more purposeful approach also means tackling the intricate issue of Medicare. Medicare is a health insurance plan run by the federal government that helps seniors cover their health care costs. People under 65 may also qualify for Medicare if they have specific disabilities.

As a federal program, Medicare is generally exempt from state health reform efforts. A core challenge for Oregon’s plan is determining how to integrate Medicare-eligible residents – most of whom are older adults – to ensure they receive the full benefits of the new system, which is planned to be even more comprehensive than current Medicare coverage.

The state’s Universal Health Plan Proposal aims to cover Medicare recipients to the extent allowed by federal law and necessary waivers. It seeks to promise them all current Medicare benefits plus additional benefits (such as routine vision and dental care, which are often not covered by Original Medicare) with no out-of-pocket costs, such as deductibles or co-pays. The goal is to allow older Oregonians to keep all their federal benefits while also gaining the full benefit of the state’s plan.

Another major concern for older adults is the cost of long-term care, such as nursing home stays or in-home assistance, which is generally not covered by Medicare. This gap is a significant driver of medical debt and impoverishment among seniors.

While the Oregon Universal Health Plan aims to be comprehensive, the state has acknowledged that covering the full spectrum of long-term care poses a massive financial hurdle. The Task Force has indicated that the initial plan would likely focus on expanding services and supports for community-based and in-home care, which would help support independent living for older Oregonians. The plan may then potentially create a separate mechanism for financing a more complete long-term care benefit over time.

Overall, this deliberative process may give Oregon a better chance of success. Still, fundamental challenges remain, such as:

• how to replace premiums, co-pays, and deductibles with a fair tax system;
• how to avoid provider flight if reimbursement rates are lowered; and
• how to manage the politics of phasing out much of the private insurance industry.

The Case for Single Payer

Single-payer systems carry clear advantages. They guarantee universal coverage, ensuring that no one delays or avoids care for financial reasons. For older adults on Original Medicare, the Oregon plan is particularly appealing because it promises to eliminate cost-sharing.

Currently, even with Medicare, seniors are responsible for deductibles and a 20 percent co-insurance for most services. Many people buy Medigap plans or Medicare Advantage to help cover these gaps.

The Oregon Universal Health Plan aims to absorb all out-of-pocket costs, including deductibles and co-pays. This would allow older residents to seek care from any participating provider without worrying about surprise medical bills.

Administrative costs fall when insurers and providers no longer have to navigate dozens of different billing systems. Governments gain bargaining power to negotiate lower drug and service prices. In many countries, these advantages translate into better population health outcomes at lower per-capita costs than in the United States.

Canada’s provincial single-payer model, Taiwan’s National Health Insurance program, and the United Kingdom’s National Health Service all demonstrate that universal systems can work. Each covers the entire population, reduces the risk of medical bankruptcies, and offers care largely free at the point of service.

The Trade-Offs

Even though a single-payer system has widespread benefits, it is no panacea. In exchange for lower bills and universal coverage, residents often accept higher taxes. Demand for health care services can strain supply, creating wait times for elective procedures. Governments must also balance cost containment with adequate provider reimbursement and timely access to innovation.

On the financing side, a major challenge is unifying the different payment rates currently paid by private insurers, Medicaid, and Medicare. The universal plan in Oregon proposes setting single, equitable payment rates for all providers. For older adults, this could mean more providers would accept Medicare patients without requiring a Medigap plan. However, the state must then ensure these new rates are high enough to prevent doctors from leaving the state or refusing to see new patients, a concern that hits rural areas and specialized care hardest.

These trade-offs are visible abroad. Canada’s and the U.K.’s systems face periodic criticism over wait times. Meanwhile, Taiwan wrestles with how to fund its system as its population ages.

Looking Ahead

For Oregon, the question is not whether universal health care is desirable, but whether the financing and political coalitions can be built to sustain it. Vermont’s failure underscores how fragile ambitious reforms can be if funding mechanisms do not align with economic and political realities.

If Oregon succeeds, it could become the first U.S. state to demonstrate that single-payer health care is not only possible, but workable. If it fails, it may reinforce the notion that meaningful reform must come at the national level rather than piecemeal, state by state.

Either way, the stakes remain high. For the millions of Americans who remain uninsured or underinsured, and for the businesses and families weighed down by rising health care costs, the search for a sustainable, equitable solution is far from over.

For older Oregonians, the potential lies in replacing the complex, costly puzzle of Medicare Parts A, B, and D, plus Medigap or Medicare Advantage, with a simpler, zero-cost-sharing single plan.

Oregon’s Universal Health Plan Governance Board includes members with experience as Medicare enrollees to help ensure that the transition focuses on the needs of seniors. If successful, Oregon could set a national precedent for how states can use their own universal systems to provide a more robust and secure benefit than what Medicare alone currently offers.

Additional Reading

For additional reading on topics related to health care for older adults, check out the following articles:

• Medicare Coverage Basics: What You Need to Know
• Do Medigap Plans Cover the Medicare Part B Deductible?
• Co-Payments for Veterans’ Health Care
• Insured Retirees Paying Tens of Thousands for Health Care
• Medicare and Social Security Disability Benefits
• Why Is Prior Authorization Holding Up My Medical Care?