A new study shows that expanding Medicare to every American citizen would not only achieve universal coverage and trillions in savings, but it's also feasible to implement based on legislation that has already been proposed.
Gerald Friedman, PhD, a professor of economics at the University of Massachusetts at Amherst, released his study today in Washington, D.C., at a congressional briefing. The basis of Dr. Friedman's research is HR 676 — the Expanded and Improved Medicare for All Act — which is a bill introduced by Rep. John Conyers Jr. (D-Mich.) in February that would establish a single-payer healthcare program. The bill has been proposed for 11 straight years.
In his study, Dr. Friedman said if Rep. Conyers' bill were signed into law, the expansion of Medicare could "paradoxically" save the U.S. healthcare system $592 billion in 2014 alone. The main savings would come from slashing "administrative waste" in the private health insurance industry and using the government's bargaining power to obtain cheaper pharmaceuticals, according to the report. Over the next decade, the study suggested savings could reach $1.8 trillion.
Under HR 676, a single-payer system would be financed through several factors: increasing the personal income tax on the top 5 percent of income earners, instituting a progressive tax on payroll and self-employment, taxing capital gains and other unearned income, instituting a 0.5 percent tax on stock trades and other "progressive tax" financing efforts, according to the study.
The results of implementing the legislation, Dr. Friedman said, would be "expanded coverage, improved benefits, enhanced reimbursement of providers serving indigent patients and the elimination of copayments and deductibles in 2014." The savings would also go toward retraining displaced healthcare workers for new healthcare roles and converting investor-owned, for-profit healthcare organizations into nonprofit systems.
"This analysis shows that it is possible to reform the U.S. health financing system to make it more efficient and equitable," the study concludes. "On top of the enormous administrative savings of single payer, the savings from effective cost-control would make it possible to provide universal coverage and comprehensive benefits to future generations at a sustainable cost."
Single-payer healthcare bills have generally been opposed by Republicans and others in the past. According to a 2008 study in the Annals of Internal Medicine, 59 percent of physicians support legislation to establish a single-payer system. Several industrialized countries have also had established single-payer or universal healthcare systems for at least 30 years, including the United Kingdom, Canada, Australia, Sweden and Norway.
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