CBO weighs in on Medicare for all costs

With more policymakers proposing, supporting and seriously considering various Medicare-for-all health plans, the Congressional Budget Office took a look at a possible design of such a healthcare system and published a highly anticipated paper.

The report highlighted how lawmakers could go about creating a single payer system, but did not delve into the budgetary effects of any specific proposal or bill. The office is frequently tasked with analyzing the cost impact of proposed legislation and regulatory changes. Previous estimates have put the cost of a single payer system at more than $32 trillion over 10 years.

The report did come to several conclusions on how to design such a system, starting with four key features typical of a single-payer system:

  • The government entity acting as the operator
  • Required contribution by the eligible population to finance the system
  • Plan receipts and expenditures appear in the government’s budget
  • A small or supplementary role for private insurance under the public plan, if allowed

One of the biggest differences between the current American healthcare system and a future single-payer or universal care system is financing.

“Government spending on health care would increase substantially under a single-payer system because the government (federal or state) would pay a large share of all national health care costs directly,” the report reads.

In 2017, national healthcare spending reached $3.5 trillion, with private sources, such as businesses and households, contributing about half that amount.

The report also delved into how lawmakers could consider the federal and state roles in administering a universal care program, including creating a standardized IT infrastructure and determining administrative costs. Other major considerations in the paper included what would be covered under such a plan and who would be eligible, as well as potential payment rates and provider ownership regulations.

See the full report here.

Amy Baxter

Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."

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