The Costs of a National Single-Payer Healthcare System

24 Pages Posted: 17 Aug 2018

See all articles by Charles Blahous

Charles Blahous

Mercatus Center at George Mason University

Date Written: July 30, 2018

Abstract

The leading current bill to establish single-payer health insurance, the Medicare for All Act (M4A), would, under conservative estimates, increase federal budget commitments by approximately $32.6 trillion during its first 10 years of full implementation (2022–2031), assuming enactment in 2018. This projected increase in federal healthcare commitments would equal approximately 10.7 percent of GDP in 2022, rising to nearly 12.7 percent of GDP in 2031 and further thereafter. Doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan. It is likely that the actual cost of M4A would be substantially greater than these estimates, which assume significant administrative and drug cost savings under the plan, and also assume that healthcare providers operating under M4A will be reimbursed at rates more than 40 percent lower than those currently paid by private health insurance.

Keywords: healthcare, health care, single-payer, single payer, Medicare for all, health, health costs, health expenditures, health spending, federal budget

JEL Classification: I13, I18

Suggested Citation

Blahous, Charles, The Costs of a National Single-Payer Healthcare System (July 30, 2018). Mercatus Research Paper, Available at SSRN: https://ssrn.com/abstract=3232864 or http://dx.doi.org/10.2139/ssrn.3232864

Charles Blahous (Contact Author)

Mercatus Center at George Mason University ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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