Report: Single-Payer Health Care Could Cover All, Save $743B a Year
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DENVER -- All Americans could have health coverage, and costs would drop by as much as $743 billion per year, if the U.S. switched to a single-payer health insurance system, according to a new Congressional Budget Office (CBO) report.
Matt Bruenig, president of the People's Policy Project, said the bulk of the savings would come from reduced administrative costs, which include private insurance companies' salaries and profits, from 15 cents out of every dollar, down to one-and-a-half cents.
"Think about the insurance system as like a leaky pipe," Bruenig explained. "You put money in it, and about 15% leaks out, and then the rest finds its way to the health-care provider. So, we can tighten that leak a little bit and save a lot of money."
The CBO projections also assume the purchasing power of a single-payer system would help lower prescription drug costs and set universal payment rates for health providers, much as Medicare does today.
Critics of single-payer proposals, including Medicare for All, warn people may not want to go to medical school if they can't earn high salaries.
Others have argued pharmaceutical companies depend on high profit margins to produce groundbreaking new medicines.
Bruenig said similar systems in most of the world's developed countries have not deterred people from wanting to be doctors and nurses, who still earn higher-than-average salaries.
He agreed surplus funds are necessary to develop new medicines, but argued that money does not have to come through high drug prices.
"For example, the National Institutes of Health fund a lot of drug research already, sometimes it grants money to academic researchers, sometimes it grants money to companies," Bruenig outlined. "R&D money has got to be there, but you don't have to pay a hundred times what other countries pay for insulin."
Bruenig added a single-payer system would not replace or take over hospitals and pharmacies and make health-care decisions.
It simply would reduce the number of companies that currently pay for health care from multiple insurers to just one.
