Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

There are less than 72 hours left in this Mid-Year Campaign and our independent journalism needs your help today.
If you value our work, please support Common Dreams. This is our hour of need.

Join the small group of generous readers who donate, keeping Common Dreams free for millions of people each year. Without your help, we won’t survive.

The barriers to Medicare for All, wrote Matt Bruenig of the People's Policy Project, "are not technical deficiencies or costs, but rather political opposition from Republicans and conservative Democrats who would rather spend more money to provide less health care." (Photo: Win McNamee/Getty Images)

The barriers to Medicare for All, wrote Matt Bruenig of the People's Policy Project, "are not technical deficiencies or costs, but rather political opposition from Republicans and conservative Democrats who would rather spend more money to provide less health care." (Photo: Win McNamee/Getty Images)

'Seems Like a Good Policy!' CBO Shows Medicare for All Could Cover Everyone for $650 Billion Less Per Year

The analysis shows that administrative costs under a single-payer healthcare system "will be lower than what even the most rabid Medicare for All supporters have traditionally claimed."

Kenny Stancil

The Congressional Budget Office on Thursday released a report examining the costs associated with universal healthcare proposals that are based on Medicare's fee-for-service program and found that implementing a single-payer health insurance program in the United States would not only guarantee coverage for every person in the country but would also reduce overall healthcare spending nationwide.

"A large share of Medicare administrative costs are tied up in tasks like eligibility determination... that would no longer exist in a Medicare for All system."
—Matt Bruenig, People's Policy Project

In the words of researcher Matt Bruenig—founder and president of the progressive think tank People's Policy Project who called the CBO's working paper (pdf) on the topic "more exhaustive than any other recent study on the subject"—the new analysis shows that administrative costs under a single-payer healthcare system "will be lower than what even the most rabid Medicare for All supporters have traditionally claimed."

According to Bruenig, "Modeling the cost of a single-payer program is relatively straightforward. You begin with the status quo healthcare system and then make educated guesses about the following questions:

  1. How many more units of healthcare services will be demanded and supplied when price barriers are removed?
  2. How much more efficient will health insurance administration be after the enrollment and payment systems are radically simplified?
  3. How much money will be saved by reducing the payment rates for healthcare providers and drug companies?"

In its analysis, the CBO looked at several distinct single-payer designs and determined that four such systems—fully implemented by 2030—would save anywhere from $42 billion to $743 billion that year alone.

"Never let a politician ask: 'How will we pay for it?'" tweeted Democratic Socialists of America for Medicare for All.

Bruenig explained that the CBO option that most closely resembles current Medicare for All proposals is the one based on low payment rates and low cost sharing, which would generate $650 billion in savings in 2030.

If one were to add long-term support and services to that option, as many current Medicare for All proposals do, savings would fall to about $300 billion, he noted.

What Bruenig found most noteworthy is the CBO's findings on administrative costs:

Medicare for All advocates have historically pointed towards the 2% administrative costs of traditional Medicare as what we should expect in a Medicare for All system. Critics of this view have typically argued, among other things, that Medicare's low administrative costs are a mirage driven by the fact that their per-enrollee administrative costs are being divided by disproportionately large per-enrollee healthcare utilization.

This rebuttal never really made any sense. Private Medicare Advantage plans have a similarly sick and elderly enrollment population, but manage to spend a whopping 13.7% of their revenue on administrative expenses. The CBO's analysis, which starts with the current Medicare administrative costs and then determines how each element of those costs would go up or down in a single-payer system, seems to put this claim to bed once and for all.

Indeed, the CBO finds that the current Medicare administrative costs that are often touted by advocates are actually higher than the administrative costs you would expect in a single-payer system because a large share of those costs are tied up in tasks like eligibility determination and collection of Medicare Part B premiums that would no longer exist in a Medicare for All system.

What this means, Bruenig said, is that other studies estimating the effects of a single-payer system on administrative costs are "missing hundreds of billions of dollars of savings per year."

"Overall," he continued, "the study confirms what serious Medicare for All analysts have known for some time now: It is possible to provide high-quality public health insurance to every person in the country while also saving money overall on health spending."

Bruenig added that "the barriers to the policy are not technical deficiencies or costs, but rather political opposition from Republicans and conservative Democrats who would rather spend more money to provide less healthcare."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

Just a few days left in our crucial Mid-Year Campaign and we might not make it without your help.
Who funds our independent journalism? Readers like you who believe in our mission: To inform. To inspire. To ignite change for the common good. No corporate advertisers. No billionaire founder. Our non-partisan, nonprofit media model has only one source of revenue: The people who read and value this work and our mission. That's it.
And the model is simple: If everyone just gives whatever amount they can afford and think is reasonable—$3, $9, $29, or more—we can continue. If not enough do, we go dark.

All the small gifts add up to something otherwise impossible. Please join us today. Donate to Common Dreams. This is crunch time. We need you now.

Markey, Bowman Join Climate Coalition in Urging SCOTUS Expansion

"We cannot sit idly by," said Markey, "as extremists on the Supreme Court eviscerate the authorities that the government has had for decades to combat climate change and reduce pollution."

Brett Wilkins ·


Ocasio-Cortez Says US 'Witnessing a Judicial Coup in Process'

"It is our duty to check the Court's gross overreach of power in violating people's inalienable rights and seizing for itself the powers of Congress and the president."

Brett Wilkins ·


Critics Say Biden Drilling Bonanza 'Won't Lower Gas Prices' But 'Will Worsen Climate Crisis'

"President Biden's massive public lands giveaway in the face of utter climate catastrophe is just the latest sign that his climate commitments are mere rhetoric," said one campaigner.

Kenny Stancil ·


Grave Warnings as Supreme Court Agrees to Hear Case That Threatens 'Future of Voting Rights'

"Buckle up," implores one prominent legal scholar. "An extreme decision here could fundamentally alter the balance of power in setting election rules in the states and provide a path for great threats to elections."

Brett Wilkins ·


Biden Urged to Take Emergency Action After 'Disastrous' Climate Ruling by Supreme Court

"The catastrophic impact of this decision cannot be understated," said Rep. Pramila Jayapal, but "we cannot accept defeat."

Kenny Stancil ·

Common Dreams Logo