States Lead the Charge on Universal Healthcare as Midterms Spark Renewed Debate

With midterm elections fueling momentum for expanded health coverage, Democratic lawmakers are eyeing measures such as enhanced ACA subsidies, Medicaid restoration, and a lower Medicare eligibility age. But several Democratic-led states are aiming even higher — pursuing single-payer, universal healthcare systems.

Oregon stands at the forefront. A nine-member Universal Health Plan Governance Board, established by the state legislature in 2023, is due to deliver its proposal to lawmakers by December 1. The plan envisions comprehensive — including dental, vision, mental health, and primary care — coverage for every resident from birth to end of life, with no premiums, deductibles, or copayments. Lawmakers could vote on the plan during the 2027 session or place it on the 2028 ballot.

If enacted, Oregon would become the first state to adopt a single-payer system, potentially serving as a blueprint for others and for the nation.

Proponents point to growing public support for universal healthcare, driven by rising costs, care delays due to out-of-pocket expenses, and medical debt as a leading cause of bankruptcy.

States have historically served as policy laboratories. The ACA itself was modeled on Massachusetts’ universal coverage experiment, and Canada’s national system began in Saskatchewan. “In the short to medium term, there is no chance that ‘Medicare for All’ can pass federally,” said Jonathan Oberlander of UNC. “That’s where the states come in.”

Financing Through Redirected Dollars

Oregon’s plan would maintain current total healthcare spending by government, employers, and consumers, funded through new corporate and personal taxes replacing insurance premiums. A single pooled fund would pay all providers. The board estimates administrative savings, fraud reduction, and drug price negotiations could stretch coverage further.

A 30-year-old earning $55,000 currently pays $5,478 annually for an ACA silver plan; under the proposal, that could drop to $2,331 in taxes. An employer-covered worker earning the same currently pays $3,063 in premiums and out-of-pocket costs but could pay nothing under the plan and see any doctor in the state.

Companies with payrolls above $500,000 would face a payroll tax, with employees receiving partial credits. An estimated 31% to 60% of Oregonians would pay nothing for health benefits, though higher earners could see increased costs depending on tax rates set by lawmakers.

“Everyone contributes based on the amount that they are able to contribute and not based on utilization,” said Miriam McDonell, the board’s executive director.

Messaging Challenge Lies Ahead

Backers hope to win hospital support by emphasizing reduced billing complexity and fewer unpaid claims. Rural hospitals, often strained by uninsured and Medicaid patients, could gain financial stability. Yet the Hospital Association of Oregon opposes the plan, calling it an unfunded mandate that adds taxes and complexity to an already fragile system.

Providers would be reimbursed between Medicare and private insurance rates, with negotiated shifts toward primary care. Whether specialists will accept potentially lower payments remains uncertain.

“There’s always winners and losers in designing something like this, and so how to distribute those is the hardest part,” said Rebecca Schoon, an associate health policy professor at Pacific University who is slated to join the Oregon board in January. “But the second-hardest part is, I think, messaging this.”

Courtni Dresser, vice president of government relations for the Oregon Medical Association, said her physicians group shares many of the board’s goals in improving access to care and reducing administrative burdens. But the group has yet to declare its support or opposition to the effort.

Health insurers haven’t formally weighed in on Oregon’s proposal either, but a single-payer system would, in essence, close off Oregon to any private healthcare plans.

“We expect insurance companies to put every ounce of money they can against this idea because our system is broken and they profit from it,” said Collin Stackhouse, communications coordinator for Health Care for All Oregon, a consumer group advocating for universal healthcare.

Wendell Potter, a former insurance company executive who now works to expose industry influence, said he expects health plans to hammer the Oregon proposal with claims of high taxes, loss of choice, and the specter of “socialized medicine.”

“Most people go year to year without testing the limits of their health insurance policy,” Potter said. “And so, they’re easily scared into thinking that something valuable will be taken away from them, and that they will have something that’s inferior in its place.”

Health insurers argue their health plans help shield consumers from the full impact of rising healthcare costs.

“Americans consistently report strong satisfaction with their health coverage, including more than 180 million covered through work and 36 million who choose Medicare Advantage,” said Chris Bond, a spokesperson for the health insurance trade group AHIP. “Policy solutions are needed to rein in the ever-higher prices charged by hospitals and drugmakers and make care more affordable for everyone.”

Federal Approval Needed

A major hurdle is whether Oregon can redirect Medicare and Medicaid funds into its universal plan. Backers do not expect support from the Trump administration but hope a 2028 election change. Without federal waivers, the state could proceed in stages, starting with non-Medicare populations.

Other states are moving in parallel: California gubernatorial candidates debate implementation details, New York considers the New York Health Act, and Washington has launched a universal coverage commission. Oregon’s board has coordinated with teams in California and Washington, with the hope that a West Coast coalition could generate national momentum.

“If our four states could do it,” said Dr. Richard Bruno, “that would be the momentum we would need to get it nationally.”

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