Medicare-for-All would lower U.S. health-care spending by $2 trillion, says new study

A right-of-center think tank report critiquing the potential costs of single-payer national health insurance found that it could lower health-care spending overall by $2 trillion or more over the next decade.
By Rick Docksai | Dec 29, 2018
A new study purporting to show the exorbitant costs of the single-payer healthcare program that Sen. Bernie Sanders (I-Vt.) is proposing actually shows that the program would save money, according to analysts. They said that the study, which the right-of-center Mercatus Center at George Mason University recently published, concludes that U.S. health-care spending overall would decrease by around $2 trillion by 2031 if his proposal made it into law.

Sanders has authored a bill to expand Medicare into a nationwide health-insurance system that would cover all Americans, a move that he dubbed "Medicare for all." The Mercatus analysis calculated that this single-payer health-coverage system would require a $32.6 trillion in federal spending over its first 10 years of operation.

This federal spending surge would be necessary, according to the study, because the federal government would be taking up almost all health-care spending across the country. It warns that taxes would have to go up significantly to cover it all,

However, the analysis also found that health-care spending as a whole would decline under single-payer health care. Larry Levitt, a senior vice president at the Kaiser Family Foundation, called it the "promise and peril" of Medicare for all: Americans could achieve major cost savings with guaranteed health care that requires no insurance premiums, but they would have to be willing to accept much higher tax rates to pay for it.

"You can save money and cover everyone, but it would be a big shift from private payers to the public, and a $32 trillion increase in taxes is going to be scary," Levitt said, adding that Medicare-for-all supporters will have difficulty pitching their idea to the public and to lawmakers.

Levitt also cautioned that the proposal might lower doctors and hospitals' profits. Medicare reimburses them at much lower rates than private insurance, he noted.

 

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