Policy Summary

Universal care policies cover a range of proposals that include single-payer government-funded models as well as models that mandate coverage, but with provisions for covering some or all the costs for low-income consumers. Hybrid models exist that combine elements of both. These models feature a range of elements. In addition to the government playing a significant role in expanding access and setting standards, some common features include:

  • Addressing overall out-of-pocket consumer costs for copays, premiums, or deductibles for receiving service.
  • Capping of prescription drug costs for all consumers.
  • Expansions of covered health services include mental health, dental, hearing, substance abuse treatment, vision, prescription drugs, reproductive health, and home and community-based long-term care.

Case for Equity

Health care disparities can be found in the United States with respect to geography (rural vs metro), race, gender, and income (Caldwell et al 2016). Rural Americans have a life expectancy of 76.7 years compared to 79.1 years for those living in metropolitan communities (Singh et al 2014). In addition to lower life expectancy, Black Americans suffer from a higher prevalence of conditions like heart disease and hypertension, and higher infant mortality compared to white Americans (Cigna 2016). Similarly, Hispanic Americans have higher rates of chronic disease and less access to care in the US. Achieving a more equitable system would address all these disparities and ensure that no American’s health and longevity are limited because of where they live, the color of their skin, or how much money they earn.

Issues to Resolve & Lingering Questions

  • How would the nation ramp up the capacity to deliver health care services given the likely increase in demand? The current dearth of nurses and other health professionals would be exacerbated.
  • Expanding coverage would not solve other questions related to access to care like rural community access. Issues of transportation, medical facility construction/siting, and other issues would persist.

Return on Investment

Return on Investment for this policy is rated as being HIGH.

Several studies have concluded that the adoption of a single-payer system would create major costs savings in health care expenditures. There is considerable evidence pointing to the potential for tremendous social and economic benefit to be derived from administering a single-payer system when analyzing studies conducted over the past 30 years. These studies show an average of $556 billion in savings, ranging from $140 billion up to $1.5 trillion (Liu 2016). The major contributing factors to achieving these savings are savings arising from simplified payment administration, lower expenditures for prescription drugs, and increased use of preventative services (which decreases future costs although there is less evidence of this last factor). 

In December 2020, the Congressional Budget Office conducted one of the most detailed examinations of the single-payer health care systems from a financial perspective. The CBO estimated that the US could save approximately $400 billion annually under any of the single-payer models it examined (Congressional Budget Office 2020).  

It is important to note that there is no consensus on the financial impact of a single-payer system. A number of studies conclude that there would be substantially increased costs to administer such a system (for example see Urban Institute and RAND). A major point of difference is the lack of estimation for long-term cost savings derived from a healthier population, or estimating the lowered system costs from the use of preventative services over time as well as different assumptions regarding program design elements.

Research Base

Research Base is rated as being MEDIUM.

There are a number of studies that focus on the overall positive benefits of the adoption of universal health care. The overwhelming majority of these studies focus on assessing single-payer systems (see examples in Appendix). This literature focuses predominantly on costs factors like decreases in out-of-pocket costs and prescription costs and how they impact overall system costs. Regarding individual/patient impacts, the major focus is on examining access to care and care utilization. Overall, most projections show positive outcomes across all of these factors (lower costs and greater healthcare access). However, these economic studies vary with respect to their methodological rigor and potential political motivations.  

The research literature is global in nature due to the presence of single-payer systems in a range of countries. There has been an uptick in recent years as a result of increased attention due to the presidential elections. Regarding methodology, this research relies primarily on projections to assess how the implementation of different variations of a single-payer system would impact overall costs and delivery of health care. However, projections are limited in their utility as there is no domestic and large-scale empirical example of implementation of a system to properly test the economic models.  

Overall, with respect to health care disparities, the literature lacks the same depth of focus and a relatively fewer number of in-depth analyses of health care outcomes across different groups (Blewett 2009). However, related literature on the effects of implementing other health care systems (e.g., Veteran’s Administration) suggests the potential for single-payer systems to decrease health disparities and mitigate negative health outcomes along racial and socioeconomic lines (Ohanlon et al 2017). 

State & Local Ease of Implementation

This policy is rated as having a HARD level of implementation difficulty 

Exploratory Steps for Local Leaders

States have flexibility with respect to existing healthcare program administration. Leaders should examine the feasibility of consolidating federal funds from those programs—Medicare, Medicaid, and the ACA exchanges—to create state single-payer plans using waiver provisions in federal healthcare programs. 

Explore options to redirect employer-sponsored health plans to capture employer expenditures and move employees into the state single-payer system.  States can look at options to levy payroll taxes, restrict providers’ abilities to accept private-insurer reimbursement, levy taxes on employers and/or income taxes on employees, or recoup payments from secondary patient coverage after a single-payer plan pays for all eligible patients’ care.  

Commission a study to determine the current drivers of system costs in your community, and to forecast the cost projections of single-payer implementation including individual consumer impacts, administration costs, impacts to providers, as well as cost and revenue impacts on other government systems. Examples from Arkansas, Indiana,  and Virginia offer good examples.  

Innovations Across America

Massachusetts Health Care Reform

Action Space: State Level (Governor/Legislature)

Cost: Reports suggests annual average costs of $696 million in federal and state money

Mechanism: Enabling Legislation 2006 Session Law Chapter 58

Of the three states to attempt broad-based universal coverage (Massachusetts, Colorado, and Vermont) Massachusetts stands out as the only successful model. The model became the template for the national Affordable Care Act implemented under the Obama administration. Both insurance reforms featured coverage mandates, insurance pools, Medicaid expansion, employer mandates, and enforcement mechanisms administered through the tax system.

The failures of Vermont and Colorado reflect some common elements: a failure to control or plan for escalating costs; inability to create stakeholder buy-in; and a failure to address the regressive nature of the plan on low-income residents. Policymakers seeking to address health care coverage in a substantive way must tackle the most challenging and consequential of the three: implementing health care cost controls.

Oregon Accountable Care Organizations

Action Space: State Level

Cost: Since implementation, health care costs have grown 3.4% per member per year

Mechanism: Federal Medicaid Waiver (Waiver Summary)

In 2012, the State of Oregon pioneered one of the early statewide ACO models. To control costs and provide better care, the state pays providers a capitated rate (based on services to a given population) and holds them financially responsible for all of their beneficiaries’ health care services (including dental and mental health). Providers (ACOs) work with community-based organizations to provide supportive services and preventive care to decrease hospitalizations and other costly services.  Payments grow at a fixed rate while providers are held to service outcome benchmarks for their patients.

State Implementation 

Brown, E. and McCuskey E. 2019. Could States Do Single-Payer Health Care? Health Affairs. Accessed April 1, 2021.  

Hunter K; Kendall D. 2019.  Single-Payer Health Care: A Tale of 3 States. Third Way. Accessed March 15, 2021.  

Cost Estimates

Cai C, Runte J, Ostrer I, Berry K, Ponce N, Rodriguez M, et al. (2020) Projected Costs Of Single-Payer Health Care Financing In The United States: A Systematic Review Of Economic Analyses. PLoSMed 17(1):  

Liu, Jodi L., 2016.  Exploring Single-Payer Alternatives for Health Care Reform. Santa Monica, CA: RAND Corporation 

Congressional Budget Office. 2021. How CBO Analyzes the Costs of Proposals for Single-Payer Health Care Systems That Are Based on Medicare’s Fee-for-Service Program. Working Paper Series. Washington, D.C.   

Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Amherst (MA): Political Economy Research Institute, University of Massachusetts Amherst; 2018 Nov 30 [cited 2019 Dec 18]. 

Blahous C. 2019. The Costs Of A National Single-Payer Healthcare System. Arlington (VA): Mercatus Center, George Mason University 

Hellander I. 2019. How Much Would Single Payer Cost? Physicians for a National Health Program;    

Health Care Impacts on Disparities 

Artiga S; Orgera K. 2020. Changes in Health Coverage by Race and Ethnicity since the ACA, 2010-2018. Kaiser Family Foundation.  

Buchmueller, T; Levinson, Z; Levy H; Wolfe B. 2016. Effect of the Affordable Care Act on Racial and Ethnic Disparities in Health Insurance Coverage. Am J Public Health. Aug; 106(8):1416-21.    

Chen, J; Vargas-Bustamante, A; Mortensen, K; Ortega, A. 2016. Racial and Ethnic Disparities in Health Care Access and Utilization Under the Affordable Care Act. Medical Care: February 2016 – Volume 54 – Issue 2 – p 140-146 

Sehgal AR. 2009. Universal Health Care as a Health Disparity Intervention. Ann Intern Med. Apr 21;150(8):561-2.  

Blewett LA. 2009. Persistent disparities in access to care across health care systems. J Health Polit Policy Law. Aug;34(4):635-47.    

Varma T. 2018. The Effect of the Affordable Care Act on Racial Disparities in Health Access and Outcomes 

Tanvee Varma. Honors Thesis in Economics. Wellesley College.  

Caldwell, J. T., Ford, C. L., Wallace, S. P., Wang, M. C., & Takahashi, L. M. (2016). Intersection of Living in a Rural Versus Urban Area and Race/Ethnicity in Explaining Access to Health Care in the United States. American journal of public health, 106(8), 1463–1469. https://doi.org/10.2105/AJPH.2016.303212 

Singh, G., Siahpush, M. 2014. Widening Rural–Urban Disparities in Life Expectancy, U.S., 1969–2009. Volume 46, ISSUE 2, e19-e29 

Cigna, Apr. 2016. “African-American Health Disparities.”www.cigna.com/health-care-providers/resources/african-american-black-health-disparities  

O’Hanlon, C., Huang, C., Sloss, E., Anhang Price, R., Hussey, P., Farmer, C., & Gidengil, C. (2017). Comparing VA and Non-VA Quality of Care: A Systematic Review. Journal of general internal medicine, 32(1), 105–121. https://doi.org/10.1007/s11606-016-3775-2 

Massive Workforce Investment

21st Century Homestead Act