How much will your taxes need to rise to pay for Medicare-for-all? Zero!

In fact, the savings from Medicare-for-all (M4A) are huge. If we would have started Medicare-for-all (M4A) in 2017, then the government would have saved nearly $6 trillion on its health care costs over 10 years, and the nation would have saved nearly $22 trillion on health-care costs during the same time period.

There are two main data items for this. One is Kevin Thorpe’s estimate of the health-care costs, and the other, a 2016 peer-reviewed study by David U. Himmelstein, MD, and Steffie Woolhandler, MD, MPH, that found that the government funds about 65 percent of total health care costs. Thorpe is the Chair of the Department of Health Policy & Management at Emory University. Himmelstein and Woolhandler are researchers who study health-care economics and other health related issues.

Generally, the government is said to fund about 45 percent of the nation’s health care bill. This figure is too low because it omits the cost of government employees’ health insurance and other health-care costs incurred by the government. When these costs are considered, the government funds about 65 percent of total health-care costs, as previously mentioned.

When you combined Thorpe’s calculations with figures from the Centers for Medicare & Medicaid Services (CMS) for GDP, actual or projected health-care costs, and the 2016 study, the government is already paying more for health care than the costs of M4A. For example, in 2018, Thorpe estimates that M4A will cost $2 trillion. Government-funded health care will cost $2.435 trillion, thus M4A saves $435 billion. The savings are even greater for years 2019 through 2025 (Table 1).

While there are many compelling reasons to move to an M4A system, perhaps the most compelling is the economic benefits from saving trillions of dollars on health care while covering everybody with more comprehensive care. As stated earlier, we would save nearly $22 trillion on health care costs over ten years (Table 2). It is not a question of whether we can afford M4A. The real question is how can we afford not to, especially since no tax increase is needed.

While there is some debate about how much M4A would cost, Thorpe’s estimate provides the best and most reasonable costs estimates for M4A.

There is an Urban Institute study that estimates M4A would cost $32 trillion over ten years. While many outlets have quoted this figure, their estimate is highly flawed. The Urban Institute ignored real-world experience, especially from Canada when they implemented their Medicare system, causing them to overestimate usage of health care. Compounding this problem, they say that once copayments and deductibles are eliminated, people will greatly increase their usage. While there is evidence that people who could not afford medical care—whether or not they have insurance—will go to the doctor once they can afford it, there is no evidence that they overuse medical care.

When Canada implemented single-payer, physicians sometimes delayed routine appointments so people who had immediate medical problems could get treated. In other single-payer countries there is no evidence that people overuse medical care when first-dollar expenses (deductibles, copayments, and coinsurance) are covered. If people did that, then you would expect those countries, such as Canada and Great Britain, to have greater health-care expenses than the U.S., and they do not.

In addition, the Urban Institute overestimated the administration cost under an M4A system. Details about the flaws in the study can be found here and here.

Sen. Bernie Sanders also estimated M4A costs. His cost estimate is $1.38 trillion per year, or about 8 percent of GDP at the time of his estimate. Sander’s estimate appears a bit low. Canada and Great Britain spend around 10 percent of gross domestic product (GDP) on health care.

While there is some evidence that Thorpe may have overestimated some costs, his estimates match costs of other countries with single-payer systems. Thorpe estimates that the U.S. would spend around 10 percent of GDP with an M4A system, which, as previously mentioned, matches the health-care costs of Canada and Great Britain. Even if Thorpe’s numbers are high, that just means the savings are even greater if the U.S. would implement an M4A system.