Some policymakers are examining “Medicare-for-All” proposals that would provide comprehensive health care coverage to the population nationwide. According to a new report, national spending under a Medicare-for-All plan would be $3.89 trillion in 2019, or a 1.8 percent increase relative to the costs under current law.
The estimated 1.8 percent increase in national spending reflects a 7.7 percent increase in personal health care spending—including more use of health care services by the newly insured and people facing no cost sharing. This is partially offset by a 27.3 percent decrease in administrative spending. While the 1.8 percent increase is a relatively small change in national spending, the federal government’s health care spending would increase substantially, rising from $1.09 trillion to $3.50 trillion, and would likely require new financing through taxes.
The estimated increase in national spending is driven in part by an assumption that providers’ supply of services will not fully meet the new demand for health care under the plan. If there were no supply constraints, national spending under the plan would reach $4.20 trillion, a 9.8 percent increase relative to the costs under current law.
The study estimates the potential effects of a national single-payer health plan that would provide comprehensive health care coverage, including long-term care benefits and no cost sharing, by extrapolating from the authors previous single-payer research.