“For families, our results show that Medicare for All can promote both lower average costs and greater equity in financing health care. For example, we find that for middle-income families, the net costs of health care will fall sharply under Medicare for All, by between 2.6 and 14.0 percent of income. By contrast, with high-income families, health care costs will rise, but still only to an average of 3.7 percent of income for those in the top 20 percent income grouping and to 4.7 percent of income for the top 5 percent income group.”

Source: Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Research report. Political Economics Research Institute. 30 November 2018.
www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all 

“Under the transitional program featuring the 8 percent premium reductions for covered employees, businesses that have been providing coverage for their employees will see their health care costs fall by between about 8 – 13 percent, after accounting for administrative savings as well as their premium reductions.”

Source: Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Research report. Political Economics Research Institute. 30 November 2018.
www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all 

“There will be two sources of financing for Medicare for All. The first is the same public health care revenue sources that presently provide about 60 percent of all U.S. health care financing, including funding for Medicare and Medicaid. Existing public sources of funds will provide $1.88 trillion to finance Medicare for All. Given our estimate that the overall costs of Medicare for All will be $2.93 trillion, the system therefore needs to raise an additional $1.05 trillion from new revenue sources.

“We provide a set of illustrative financing proposals that, in combination, can generate $1.08 trillion, thus producing a revenue surplus of about 1 percent for the system. Other approaches are also workable. We emphasize at the outset that, regardless of the specific funding framework utilized for Medicare for All, all households and private businesses will be able to pay into the system an average of 9.6 percent less than they are presently contributing to the U.S. health care system. This is, straightforwardly, because Medicare for All is able to operate at a funding level that is 9.6 percent below the current overall funding level for U.S. health care.”

Source: Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Research report. Political Economics Research Institute. 30 November 2018.
www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all 

“The modeling is a challenge — how much would hospitals, doctors and drug makers be paid? Without insurance company profits, what are the net savings? What would be the cost when more affordable care leads to more use?

“But if the Urban Institute numbers are reasonably correct, the total offsets of $26 trillion — state and local government plus private savings — leave a gap of $6 trillion relative to new federal spending. Overall, the Urban Institute said total health care expenditures would rise $6.6 trillion over the period.

“Urban Institute fellow John Holahan pointed out that Medicare for All doesn’t cover some large areas of health care spending, such as institutional long-term care and veterans health care. The amount would be in the trillions of dollars. Sanders’ left that out when he compared the Medicare for All price tag to total health expenditures. 

“The RAND Corporation said that for 2019 by itself, Medicare for All would come with a 1.8% rise in total health care spending.

“Medicare for All backers counter with a report out of the University of Massachusetts-Amherst. Economists there said the program could reduce the cost of care by about 10%. The bulk of those dollars would come from lower administrative and drug costs.”

Jon Greenberg. The cost of Medicare for All: Sticker shock or bill relief? Politifact. September 13th, 2019. Last accessed Jan. 30, 2020.
https://www.politifact.com/truth-o-meter/article/2019/sep/13/cost-medicare-all-sticker-shock-or-bill-relief/

“With our high-end estimate that overall utilization will rise by 12 percent under Medicare for All, we are including all categories of spending included in Health Consumption Expenditures other than public health activity. It is likely that our assumption of a 12 percent utilization increase errs still further on the high side because we are assuming that Medicare for All will fully cover spending increases in the areas of long-term care, complementary medicine, cosmetic surgery and over-the-counter medicines. In fact, spending in these areas may not rise by our average 12 percent figure. At least in part, this would be because these areas of care will not be fully covered under Medicare for All.

“To be more specific, Section 204 of the September 2017 draft of the Medicare for All bill describes the long-term care services that will be covered under its provisions. These include, among others, nursing homes, home health care services, rehabilitation, and personal care. Within the CMS Health Consumption Expenditures accounts, spending in these areas are mostly covered within the two categories of nursing home services and home health care. In 2017, spending in these two categories totaled to $265 billion, i.e. nearly 8 percent of all Health Consumption Expenditures.

“As described in Section 204, the scope of long-term services that will be included under Medicare for All are based on a ‘maintenance of effort’ standard relative to current care levels. This suggests that there should be neither any reductions or expansions in the extent of services provided. In addition, following current practice, the funding would continue to be managed mostly at the state-government level. At the same time, the bill does also include provisions for an increase in long-term care spending based on 1) the percentage increase in health care costs within a given state; 2) the total amount of spending by the State for longterm care in the previous year; 3) the increase in the State’s overall population and the share of its population aged 65 and over (p. 18-19). The bill does not specify how these factors should be weighed in establishing the appropriate level of long-term care spending. Given such uncertainties in coverage within the bill, it is prudent to allow, as a high-end approximation, that long-term care spending under Medicare for All will increase by the same 12 percent level that we have applied for other categories of Health Consumption Expenditures.”

Source: Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Research report. Political Economics Research Institute. 30 November 2018.
www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all 

“The aging of the population, the concomitant increase in the number of people with disabilities, and the use of LTSS [Long Term Services and Support] is a worldwide phenomenon not limited to the developed world (European Commission, 2015; De la Maissonneuve & Martins, 2013; World Bank, 2016). Globally, the average public expenditure on LTSS is less than 1 percent of gross domestic product (GDP) (United Nations, 2016). The Organization for Economic Co-operation and Development projects that the average percentage of GDP spent on public long-term care services will roughly double from 2006-2010 to 2030 (from 0.8 percent to 1.7 percent) in member countries, including the United States (De la Maissonneuve & Martins, 2013). In East Asian and Pacific countries, increased exposure to health risks among adults is expected to drive disability rates higher in the future, yet only a handful of countries have introduced a formal LTSS system (World Bank, 2016). Institutional services are available to small proportions of the population, and most individuals rely on informal caregiving.”

Source: E. Rosenoff, N. Thach, J. Weiner. “An Overview of Long-Term Services and Supports and Medicaid: Final Report.” Washington, DC: Dept. of Health and Human Services, May 2018.
https://aspe.hhs.gov/basic-report/overview-long-term-services-and-supports-and-medicaid-final-report

“In less than two decades, the graying of America will be inescapable: Older adults are projected to outnumber kids for the first time in U.S. history.

“Already, the middle-aged outnumber children, but the country will reach a new milestone in 2034 (previously 2035). That year, the U.S. Census Bureau projects [PDF] that older adults will edge out children in population size: People age 65 and over are expected to number 77.0 million (previously 78.0 million), while children under age 18 will number 76.5 million (previously 76.7 million).

“This demographic transformation caused by a rapidly aging population is new for the United States but not for other countries. Japan has the world’s oldest population, where more than one in four people are at least 65 years old. Already, its population has started to decline and, by 2050, it is projected to shrink by 20 million people.

“Europe is headed down the same demographic path. Some countries in Western Europe have populations that are older than the U.S., notably Germany, Italy, France and Spain. Countries in Eastern Europe are even further along and, within a few years, many of their populations are projected to begin shrinking.

“America has been different, until now.”

Source: Jonathan Vespa. The Graying of America: More Older Adults Than Kids by 2035 Population. The U.S. Joins Other Countries With Large Aging Populations. US Census Bureau. Last accessed Jan. 30, 2020.
https://www.census.gov/library/stories/2018/03/graying-america.html

Selected Resources On Single Payer / “Medicare For All”
A. P. Galvani PhD, et al., The Lancet, 2020: Improving the prognosis of health care in the USA

Cai et al, PLOS Medicine, 2020: Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses

Congressional Budget Office, 2019: Key Design Components and Considerations for Establishing a Single-Payer Health Care System

Political Economy Research Institute, 2018: Economic Analysis of Medicare for All

Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and several other nations.

Page last updated Jan. 14, 2021 by Doug McVay, Editor.