In May 2016, The Urban Institute, not known as being a bastion of free market thought, released their best cost estimates for Bernie style “Medicare for all.”
Below is the executive summary (minus a overview of their methods). You can read the report in its entirety here.
The Sanders Single-Payer Health Care Plan
Presidential candidate Senator Bernie Sanders has called for adopting a single-payer health care system in the United States.1 He proposes replacing the programs established under the Affordable Care Act (ACA), as well as preexisting public programs such as Medicaid and Medicare, with the new system. Under his approach, all individuals in the United States would be covered by a single insurance program. Sanders’s plan would eliminate all private spending and replace all private and public coverage programs, except Veterans Health Insurance and the Indian Health Service. Benefits provided under the insurance plan would cover all medically necessary services, and cost sharing would be eliminated entirely. Coverage would include both acute and long-term care.
Our central findings of the effects of the Sanders approach are shown in table 1 and include the following:
- All American residents would be automatically enrolled in acute care coverage, increasing insurance coverage by an estimated 28.3 million people in 2017, from an uninsurance rate for nonelderly adults of 10.4 percent under current law in 2017. In 2026, the Sanders plan would decrease the number of nonelderly uninsured by 30.9 million, or 11.0 percent of the population, relative to current law. (The uninsurance rate under current law in 2026 is projected to be larger than the rate in 2017 as a result of demographic changes and a slight decrease in the rate of employer-sponsored insurance.) Although the intent is unspecified in the campaign’s materials, this finding assumes that the plan would cover the undocumented population as well as citizens and other legal residents.
- National health expenditures for acute care for the nonelderly would increase by $412.0 billion (22.9 percent) in 2017. Aggregate spending on acute care services for those otherwise enrolled in Medicare would increase by $38.5 billion (3.8 percent) in 2017. Long-term service and support expenditures would increase by $68.4 billion (28.6 percent) in 2017.
- Together, national health expenditures would increase by a total of $518.9 billion (16.9 percent) in 2017, and by 6.6 trillion (16.6 percent) between 2017 and 2026.
- The increase in federal expenditures would be considerably larger than the increase in national health expenditures because substantial spending borne by states, employers, and households under current law would shift to the federal government under the Sanders plan. Federal expenditures in 2017 would increase by $1.9 trillion for acute care for the nonelderly, by $465.9 billion for those otherwise enrolled in Medicare, and by $212.1 billion for long-term services and supports.
- In total, federal spending would increase by about $2.5 trillion (257.6 percent) in 2017. Federal expenditures would increase by about $32.0 trillion (232.7 percent) between 2017 and 2026. The increase in federal spending is so large because the federal government would absorb a substantial amount of current spending by state and local governments, employers, and households. In addition, federal spending would be needed for newly covered individuals, expanded benefits and the elimination of cost sharing for those insured under current law, and the new long-term support and services program.
- State and local governments could save $319.8 billion in 2017 and $4.1 trillion between 2017 and 2026 as the federal government absorbs these costs under the Sanders plan (not shown in table 1). A maintenance-of-effort requirement could make state and local funds available to help pay for the plan, but the legality of such a requirement is in question.
- Private health care spending by households and employers would drop as the federal government would absorb their spending under current law. Private sector expenditures for these groups would decrease by $1.7 trillion in 2017 and by $21.9 trillion between 2017 and 2026. These considerable savings would partially offset the impact on the private sector of new taxes required to pay for the Sanders plan.
- Analysis by the Tax Policy Center indicates that Sanders’s revenue proposals, intended to finance all new health and nonhealth spending, would raise $15.3 trillion in revenue over 2017 to 2026. This amount is approximately $16.6 trillion less than the increased federal cost of his health care plan estimated here. The discrepancy suggests that to fully finance the Sanders approach, additional sources of revenue would have to be identified; that is, the proposed taxes are much too low to fully finance the plan.