The Mercatus Center, a free-market think tank based at George Mason University, released a new report on just how much the national single-payer healthcare system would cost. That report touts a now heavily cited increase of the federal budget needed for healthcare by “approximately $32.6 trillion during the first 10 years of full implementation.” At first glance, that number makes for a damning headline. A closer look at the data shows that despite that price tag for the federal government, such a “Medicare for all” program would actually mean all Americans (government included) would spend about $2 trillion less on healthcare over the decade.
In short, that means that providing healthcare to everyone would have a smaller overall sticker price than the current system.
To understand these numbers, we’re distinguishing between federal spending and national health expenditures. Federal spending is only the amount that the federal government spends. National health expenditure is the total amount of money spent on health care including from the federal government.
Since the idea of single-payer healthcare is that the federal government pays the vast majority of the cost, it makes sense that the cost to the federal government would increase by a lot. That, is a substantially different argument from claims about the total “cost of healthcare.” Just because the government foots the bill doesn’t mean that healthcare costs the country more. Indeed, under the numbers Mercatus used, the total cost of healthcare for Americans would be less.
The author Charles Blahous points to a table in his study, noting, “total health expenditures decrease by only 4 percent.” Although Blahous phrases this savings as “only,” the reality is that even by Mercatus estimates it would cost less to have single payer.
How America should fund healthcare, however, is much more complicated than numbers or ideal calculations.
Indeed, the most important question on single-payer healthcare is if the government is capable of implementing and maintaining a healthcare system. For the proposed system to work, lawmakers would have to not only make a short-term commitment to overhauling the current system but also a long-term commitment to seeing the transition through and maintaining funding, oversight, and appropriate regulation.
This would require long-term bipartisan support and dedication to funding commitments and continuity between administrations. A single-payer system would also need a government capable of planning for the future and not, as they have with social security for example, robbing the future to pay for today.
The worst outcome would be half-implemented reform that could result in even more muddled and confusing healthcare than the current system. After all, many problems, such as high drug prices combined with the inability of the government to negotiate prices with companies (even though private insurers can) or VA waits not for care but for determining eligibility for care are the result of a poorly implemented half-public, half-private system.
Even if single payer, in theory and if well-implemented, costs less than the current model, those calculations hinge on the ability of the government to actually commit to healthcare reform and to successfully oversee the transition and long-term maintenance of such a program — a proposition that Americans looking at the current government (dys)functions are right to be skeptical of.
