Medical costs in the United States are the highest worldwide. Our total spending on healthcare matches the entire economic output of Germany. Yet, 27 million Americans—nearly a tenth of the population—lack medical insurance, resulting in limited professional medical care for them. Despite the exorbitant expenditure, our healthcare outcomes are not superior to those of other advanced nations. Our life expectancy is lower, even though we spend more per person than any other country.
Many advanced nations have succeeded in providing healthcare to almost all their citizens at a significantly lower cost, primarily through adopting single-payer health systems. The question remains: would a single-payer system work in the U.S.? Would it cost less, cover more people, and be better overall? And if so, who would bear the financial burden?
It’s important to understand that single-payer healthcare isn’t synonymous with free healthcare or socialized medicine. There’s no credible proposal suggesting that the federal government should own all medical facilities and employ healthcare providers directly. Instead, let’s focus on Senator Bernie Sanders’ plan, currently at the forefront of debate. His proposal envisions a national healthcare system covering all citizens regardless of employment status, wealth, health, or age, including those with pre-existing conditions. Basic vision, dental, and hearing expenses would also be covered, with minimal to no out-of-pocket costs. This plan would replace nearly all private insurers, although private plans would still be available for additional coverage.
If implemented, this plan would eliminate Medicare, Medicaid, Obamacare, and employer-sponsored plans. A single national agency would oversee all medical needs, simplifying the system and removing the complex web of insurers, state agencies, employers, and charities currently managing healthcare costs.
The government already funds roughly half of medical expenses in the U.S. through Medicare, Medicaid, and veterans’ benefits. Sanders’ plan, termed Medicare for All (M4A), differs from existing Medicare, as it would not have premiums, deductibles, and would cover vision, dental, and hearing.
Who would pay for this? Taxpayers. The projected current system cost is $45 trillion over the next ten years, with the Department of Health and Human Services estimating total medical costs in 2018 at $3.5 trillion, expected to rise annually. Transitioning to a single-payer system would shift costs from individuals and employers to the federal government, not necessarily increasing total expenditures but redistributing them. The Mercatus Institute estimates this shift would be around $33 trillion over ten years, which aligns with figures from the Urban Institute.
The 33 trillion-dollar figure reflects a reallocation of current expenses, not an additional cost. Insurance premiums, Medicare taxes, and state Medicaid taxes would disappear, replaced by higher federal taxes. Overall healthcare costs could potentially decrease, but this relies on significant assumptions, such as reduced payments to doctors and hospitals, which may not be universally accepted.
Demand for medical services could increase with 27 million newly insured people and easier access to care, possibly raising overall costs. Projections suggest that under current plans, annual costs could hit $5.1 trillion by 2026. A single-payer system might lower these to $4.9 trillion with fee reductions but could rise to $5.3 trillion without them, averaging out at the status quo—$5.1 trillion—while covering more people.
It’s clear our current system has flaws. U.S. medical costs are higher than those in other advanced countries, with costs rising faster than inflation and healthcare outcomes that don’t justify the spending. The system employs vast resources—470,000 workers in insurance processing alone—with inefficiencies, inconsistencies, and high administrative costs.
The key questions are: would higher demand for services under a single-payer system lead to longer wait times, as seen in some countries? Would people need additional private insurance for more comprehensive care? Whose taxes would increase to fund the system, and would it be equitable? Could displaced insurance workers find new employment?
Ultimately, we must decide how much we’re willing to invest to ensure everyone has access to healthcare and who we trust—profit-driven insurance companies or a federal bureaucracy—to manage our medical needs.