Single-payer vs. public option: Comparing cost, coverage

The U.S. can plausibly achieve near-universal coverage without increasing national health expenditures, according to a study of health reform policies from the left-leaning Urban Institute funded by the Commonwealth Fund.

The study looks at a range of policies proposed by 2020 presidential candidates and members of Congress. It breaks these up on a scale of increasing coverage and cost. The eight hypothetical reforms studied range from minor adjustments to the ACA to a full-blown single-payer health plan for residents and undocumented immigrants that covers healthcare, dental, vision and hearing care. 

Here are the cost and coverage highlights of two potential plans that would increase coverage while reducing national health spending:

1. Public option. This plan would make premium and cost-sharing subsidies more generous for people enrolled in marketplace plans, create a reinsurance program for insurers, prohibit short-term plans, add a public option and autoenroll legal residents in coverage. 

  • This would reduce the number of uninsured Americans by 25.6 million, achieving near-universal coverage. It leaves 6.6 million undocumented residents uninsured. 
  • Federal government spending would increase $122.1 billion in 2020.
  • National health spending, which incorporates government spending, employer spending and household spending, would decrease by $22.6 billion in 2020.

2. Single-payer "lite." This reform eliminates private health insurance and creates a single-payer system covering the same benefits required under the ACA. It does not apply to undocumented immigrants.

  • This plan would decrease the number of uninsured legal residents by 25.6 million, similar to the public option described above. It would, however, result in a greater uninsured population, as roughly 4.2 million undocumented immigrants with private insurance would lose coverage. In addition to the 6.6 million undocumented immigrants left uncovered by the system, the total uninsured population under this plan would be 10.8 million , according to the study. 
  • Federal government spending would increase $1.5 trillion in 2020. 
  • National health spending would decrease by $209.5 billion.

A more extensive single-payer plan analyzed by the Urban Institute would leave no person uninsured, but would increase federal government spending by $2.8 trillion in 2020. National health spending would also increase by $720 billion, as the savings for businesses and individuals would not offset the increase in cost for the federal government on a national level.

Read the full study here.


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