Next: Single-payer health care would probably require new taxes. Just what level of taxes, though, and who they would hit hardest remain open questions.
Notably, the CBO report avoids a question that critics frequently surface: How much would this cost? How would you pay for it?
That’s because there’s no uniform cost estimate for single-payer and no easy formula to apply.
For one thing, the price tag depends on what services are covered – something like long-term care would make the idea much more expensive.
There’s also the question of cost sharing. In some single-payer systems, people must pay a copay, meet a deductible, or pay a premium as part of the health plan. That would alleviate some need for new taxes.
“I don’t think you can put numbers on it until someone defines a benefit package and defines cost sharing,” Mr. Berenson said.
The current Medicare-for-all bills eschew cost sharing. Other health reform proposals would keep premiums intact to help foot some of the bill.
The CBO report suggests that new taxes would likely play a role in financing a new single-payer plan. But what kind of taxes – a payroll tax, an income tax, or a sales tax, for instance – has not yet been stipulated. And each would have different consequences.
The single-payer approach could bring down health expenses, or at least increase value. But how effectively it would do so – and its larger economic impact – would depend on other design choices.
Single-payer backers dismiss the “pay-for” questions because, the reasoning goes, this approach would save lots of money in other ways, ultimately making it a good deal.
Yet again, though, the CBO said, whether that actually happens depends on the system’s design.
By eliminating most private insurers, a single-payer system would likely slash hospitals’ administrative overhead. The government could then pay a rate that better reflects reduced hospital costs, according to the CBO report.
But, ultimately, the single-payer bottom line depends on what the system pays hospitals, doctors, and drug companies for different services and products. That answer also would inform other economic assessments – ascertaining, for instance, how single-payer affects a small town where the hospital is the main employer.
Even without clear answers, outlining those questions moves the ball, Liu said.
“This area is moving really fast,” she said. “To me, it seems like this is the beginning of a longer conversation.”
Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.