How Much Would We Really Pay for Medicare-For-All?

How much more would it really cost for us to institute a national healthcare system in the United States to cover every American?  This author took the time to write out a back-of-the-envelope calculation, to give us a good idea. Canada has a similar system to a proposed Medicare-For-All healthcare system. Since they are culturally, economically and geographically the closest country to the United States, I will use them as a model.

Canada currently spends $228 billion per year to provide healthcare to all 36.3 million residents of that country. Since the United States has a larger population (323.1 million,) if I assume that the US will keep costs to the exact same level as the Canadian system, I wind up with a figure of $2.029 trillion USD per year in required expenditure.

That’s a metric ton of billions of dollars.

But.

What are we CURRENTLY spending on government healthcare in the United States? Right now, the government pays for healthcare in the following ways:

Medicaid(1): $574.2 billion
Medicare (2): $588 billion
Veteran’s Administration (3): $70.7 billion
CHIP (4): $16.9 billion
Obamacare(5): $83.1 billion
Health insurance tax credits (6): $272 billion

Add that up and you get a total of $1.604 trillion dollars.



If we make the large assumption that the United States is able to roll all of these existing programs into a single, unified system, and keep the costs at the same level as Canadians currently pay, the United States would need to come up with approximately $425 billion in new revenue, as well as transferring all state revenues collected for Medicaid to the federal government. The new system would cost about 126% as much as our current expenditures, or would represent a 26% increase in spending.

Is seeing a 26% increase in taxes that we pay to subsidize Medicaid and Medicare worth never paying for health insurance?  Is it worth being able to walk into any clinic or hospital in the United States with nothing more than your social security number and knowing that you will be covered?  Is it worth taking that burden off of employers, so that they no longer need to provide insurance for their employees? I think so.

(1) Includes both state and federal spending, sourced from Kaiser Foundation https://goo.gl/jzfXBN
(2) Kaiser Foundation https://goo.gl/5hSNB8
(3) Does not include non-medical spending by VA. Based on FY 2018 budget submission. https://goo.gl/9pLzWo
(4) Based on FY 2017 outlay. https://goo.gl/V6h3zZ
(5) Does not include funding for Medicaid and CHIP expansion, average of the initial CBO estimates between FY 2010 and 2019. Includes small business credit and funding for the exchanges as well as insurance subsidies. https://goo.gl/L6PQ27
(6) CBO https://goo.gl/ff8Dgw

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