Medicare for All: Should the U.S. Adopt a Single-Payer Healthcare System? (S. 1804)

What is S. 1804?

(Updated November 28, 2021)

This bill — the Medicare for All Act — would provide individuals residing in the U.S. with healthcare for all “medically necessary care” under a single-payer healthcare system. Medically necessary care would include primary care, prevention, dietary and nutritional therapies, prescription drugs, emergency care, long-term care, mental health services, dental services, and vision care. Patients would be able to choose to receive care from any qualified institution, agency, or individual.

Only public or nonprofit institutions would be allowed to participate. Health insurers would be prohibited from selling insurance that duplicates the benefits provided under this bill, but could sell benefits that aren’t medically necessary such as cosmetic surgery.

People currently enrolled in federal healthcare programs through the Dept. of Veterans Affairs (VA) or the Indian Health Service would maintain their current medical benefits and services.

While this bill’s sponsor intends to raise taxes to cover the cost of this program, those provisions aren’t included within this legislation. Information about their proposed taxes can be found below.

Argument in favor

A single-payer healthcare system is the best way to ensure that all Americans have access to the healthcare they need without having to worry about paying for health insurance. It would be more efficient than the status quo at controlling costs and produce better outcomes while bringing the U.S. in line with other developed nations with single-payer systems.

Argument opposed

A single-payer healthcare system would concentrate too much power in the federal government, creating inefficiencies in the healthcare market. It would reduce physicians’ pay and consequently the quality of care they provide, and lead to long wait lists for patients to see their doctor — all while imposing a massive tax increase on middle-class Americans.

Impact

American healthcare consumers and taxpayers; healthcare providers; insurers; and the federal government.

Cost of S. 1804

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sen. Bernie Sanders (I-VT) introduced this bill to create a single-payer healthcare system:

“Today, we begin the long and difficult struggle to end the international embarrassment of the Untied States being the only major country on earth not to guarantee health care to all its people. At a time when millions of Americans do not have access to affordable health care, the Republicans, funded by the Koch brothers, are trying to take away health care from up to 32 million more. We have a better idea: guarantee health care to all people as a right, not a privilege, through a Medicare for All, single-payer health care program.”

Sanders’ bill itself doesn’t contain any tax increases, though he intends to impose new taxes and raise existing taxes to cover the cost of Medicare for All (which he projects will cost $1.38 trillion per year), including:

• A 6.2% income-based healthcare premium paid by employers.

• A 2.2% income-based premium paid by households.

• Raising income tax brackets back to pre-Tax Cuts and Jobs Act levels and adding new brackets (37% between $250k-$500k, 43% between $500k-$2m, 48% between $2m-$10m, and 52% above $10m).

• Taxing capital gains and dividends at the same rates as regular income.

• Reducing tax deductions for households earning more than $250k.

• Increasing the estate tax (aka the death tax) and reducing the exemption threshold.

• An estimated $310 billion would come from funding that otherwise would’ve been spent on other government healthcare programs, such as the original Medicare.

Detractors argue that a single-payer healthcare system would cost taxpayers far more than Sanders projects and have a detrimental impact on the economy. An analysis by the Mercatus Center found that Sanders’ Medicare for All would cost at least $32.6 trillion over 10 years — or roughly $3.26 trillion per year — while the government’s spending on healthcare would near 13% in 2031 and continue to grow thereafter. 

Additionally, the study’s author said those “estimates are conservative because they assume the legislation achieves its sponsors’ goals of dramatically reducing payments to health providers, in addition to substantially reducing drug prices and administrative costs.” They add:

“A doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan… M4A would markedly increase the demand for healthcare services while simultaneously cutting payments to providers by more than 40 percent relative to private insurance rates, reducing payments to levels that are lower on average than providers’ current costs of providing care. It cannot be known how much providers will react to these losses by reducing the availability of existing health services, the quality of such services, or both.”

This legislation has the support of 16 Democratic cosponsors.

Media:

• Sponsoring Sen. Bernie Sanders (I-VT) Press Release
  
• Sen. Sanders Additional Information
  
• Mercatus Center
  
• Mercatus Center (Additional Context)