A new analysis suggests that the "Medicare for all" idea backed by Democratic presidential candidates Vermont Sen. Bernie Sanders and Massachusetts Sen.Elizabeth Warren would raise total national health spending by $7 trillion over a decade.
The analysis, from the Urban Institute, undercuts the argument by "Medicare for all" supporters who say providing a single public plan would save the United States money. It comes as Warren has been under pressure to detail how she would fund the healthcare overhaul, which would put everyone living in the U.S. on a government plan.
The analysis, coupled with an extensive healthcare reform study funded by the Commonwealth Fund, finds that while "Medicare for all" would leave no one uninsured, over a decade it would increase government spending by $34 trillion while overall healthcare spending would climb to $59 trillion.
That total is $7 trillion more than the U.S. is projected to spend over 10 years under current law, though under "Medicare for all," the federal government would be covering a much larger share of the costs.
The Sanders campaign has repeatedly said that the "Medicare for All" plan would cost the U.S. less than the current system, but Sanders has also acknowledged people's taxes — including for the middle class — would go up. During the Democratic presidential debate in Ohio on Tuesday night, South Bend, Indiana, Mayor Pete Buttigieg pressured Warren to reveal how she would pay for "a multi-trillion-dollar hole" in "Medicare for All," but Warren dodged by saying costs would go up for big corporations and down for middle-class families. The candidates did not address what would happen with overall healthcare spending.
The study finds "Medicare for all" may cost the federal government as little as $32 trillion if employers were to increase wages as a result of not having to pay for employee coverage, which would bring in more income tax revenue. But employers may not make that change, and if the final law were to pay doctors and hospitals more than Medicare rates, then the proposal would be even more expensive.
"It is a big lift to get this kind of money, for sure," Dr. David Blumenthal, president of the Commonwealth Fund, said in a phone call with reporters.
Sara Collins, vice president of healthcare coverage and access at the Commonwealth Fund, added that advocates of government-funded healthcare were likely to highlight the shift in where the spending comes from rather than just the amount. A total of $27 trillion of the $34 trillion the federal government would take on would otherwise be paid by states and the private sector.
"The single-payer options do decrease household spending substantially, so that is a political discussion to have with people in terms of the shifting sources of how we finance our healthcare system," Collins said.
Under the "Medicare for all" proposal, Medicare coverage would become more extensive than it is now. It would pay for emergency surgery, nursing home care, prescription drugs, mental health, dental, and eye care, all without co-pays. The analysis includes coverage for people who are living in the U.S. illegally, given that nearly every Democratic presidential candidate supports that measure.
The study assumes that healthcare costs outside of "Medicare for all" would include institutional care, healthcare for overseas military, and treatments for foreign visitors who come to the U.S.
Its researchers conclude that the cost of providing more healthcare to more people is higher than the amount of savings to the system by reducing how much medical providers get reimbursed or by cutting administrative costs.
"There are some supporters of single-payer who believe that the lower costs on administration and reimbursement are enough to offset those other increases," said Linda Blumberg, fellow in the Health Policy Center at the Urban Institute. "That is not what our estimates indicate."
The larger study examines eight different proposals to expand healthcare coverage, from shoring up Obamacare to abolishing private health insurance under the type of idea Sanders has laid out on "Medicare for all."
The idea is far more extensive than healthcare systems in other countries that have universal coverage, where people still have to take on some of the cost and noncitizens do not get covered. If that kind of a system were to be adopted in the U.S., the analysis finds, then federal spending would increase by $17.6 trillion in a decade.
The question over how to change the healthcare system has divided Democrats on the presidential campaign trail, who promise to find ways to cover the 30 million uninsured living in the U.S., and to make coverage more generous for others. Democratic front-runner Joe Biden and several other Democrats want to boost Obamacare and give people the option to buy a government plan but still let private insurers stay in business.
