CBO Releases Report About Single-Payer Healthcare System Designs

The Congressional Budget Office (CBO) on Wednesday released a report that discusses design considerations and choices facing policymakers in the single-payer healthcare debate.

The 34-page report doesn’t address all of the issues related to designing, implementing, or transitioning to single-payer healthcare (which it acknowledges could be “complicated, challenging, and potentially disruptive”). Nor does it analyze the budgetary effects of a particular proposal.

It does, however, explore several aspects of healthcare policy that would be affected by a switch to single-payer and factors to consider in designing a proposal. We’ve summarized some of the key findings below:

COVERAGE

• In a single-payer healthcare system that achieved universal coverage, most (if not all) of the U.S. uninsured population ― which averaged 29 milion people per month in 2018 ― would be covered by the public plan.
• Depending on the design of the plan, people may be allowed to retain private coverage that supplements public coverage (if private insurance benefits were duplicative of public benefits it’d be considered a multi-payer system).
• A key consideration would be whether unauthorized immigrants would be eligible for coverage, a population that averaged 11 million people per month in 2018 with about half of whom covered by health insurance last year.

COSTS

• Total national healthcare spending ― which totaled $3.5 trillion in 2017 ― is currently financed through a mix of public and private sources (like businesses and households), with private sources contributing just under half.
• While total national healthcare spending could be higher or lower than present levels depending on the design of a single-payer system, government (federal or state) spending on healthcare would increase substantially.
• Accounting for increased government spending would depend on the design of the single-payer system and the choice of whether or not to increase budget deficits.

OTHER CONSIDERATIONS

• A single-payer system would probably have lower administrative costs based on the examples of Medicare and single-payer systems in other countries because it’d consolidate administrative tasks and eliminate insurers profits.
• An expansion of insurance coverage would increase the demand for care and put pressure on the available supply of care, and if the supply of healthcare providers is insufficient to meet demand patients may face increased wait times and reduced access to care.
• Because the public plan would provide a specified set of healthcare services to all eligible enrollees, participants wouldn’t have a choice of insurer or health benefits (like under the current system) and the public plan may not address some people’s needs. For example, young and healthy people might prefer cheaper, less comprehensive coverage (or none at all). And compared to a system with competing private insurers the public plan may be slower to meet patients’ needs by covering new treatments.

— Eric Revell

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