|•Zycher –What would happen if we went to Single Payer and
coverage of uninsured.
for private health insurance, defined broadly, are in the range of 11-14
percent of total premiums.
reported directly in the Medicare budget, combined with a proportional
allocation of the costs of other federal government administrative functions,
yield a finding of 6 percent of Medicare outlays as the total reported
administrative costs for Medicare. This more complete estimate is twice as
high as a proportion of Medicare outlays as commonly asserted.
|A shift to a
single-payer system would yield net savings of about $99.6 billion (as of
2006) annually in reported administrative costs, or about $2100 in potential
health-care benefits for each of the 47 million individuals currently
|Under a single-payer
system, the increase (from about $2262) in average health-care consumption by
those currently uninsured would be in the range of about $1700 to $3400; this
results in an annual impact on government costs, as measured, between a saving
of about $19 billion to a funding shortfall of about $61 billion. The
midpoint estimate thus is an approximate funding shortfall of $21 billion
argument that the administrative cost savings yielded by a shift to a
single-payer system would be sufficient to cover the uninsured is highly
|These estimates of
the fiscal effect of covering those currently uninsured in a single-payer
system are likely to be biased downward because not all the current
health-care consumption by the uninsured is funded by the public sector;
moreover, we ignore any increases in the prices of medical goods and services
attendant upon an increase in demand engendered by a doubling of the
population eligible for Medicare or a similar single-payer program.
|In addition, the
federal government must acquire revenues through a tax system that creates
economic distortions, that is, that imposes economic costs upon the economy
in addition to the revenues generated. The lowest plausible assumption about
the magnitude of that “excess burden” of the tax system raises the true cost
of delivering Medicare benefits to 24-25 percent of Medicare outlays, or
about double the net cost of private health insurance.
|See Budget of the
United States Government, Fiscal Year 2008, Historical Tables, Table 3.2.
General government functions appear as category 800, while the administration
of justice appears as category 750. The latter category is relevant to this
analysis because (purported) Medicare fraud is a substantial problem to which
the Departments of Health and Human Services and Justice devote considerable