The Costs of a National Single Payer Healthcare System

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1 The Costs of a National Single-Payer Healthcare System Charles Blahous MERCATUS WORKING PAPER All studies in the Mercatus Working Paper series have followed a rigorous process of academic evaluation, including (except where otherwise noted) at least one double-blind peer review. Working Papers present an author’s provisional findings, which, upon further consideration and revision, are likely to be republished in an academic journal. The opinions expressed in Mercatus Working Papers are the authors’ and do not represent official positions of the Mercatus Center or George Mason University.

2 Charles Blahous. “The Costs of a National Single - Payer Healthcare System.” Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, July 2018. Abstract payer health insurance, the The leading current bill to establish single Me dicare for All Act - under conservative estimates (M4A), would increase federal budget commitments by , , 3 2 .6 trillion during its first 10 years of full implementation (2022 – 2031), approximately $ assuming enactment This projected increase in federal healthcare commitments would in 2018. equal approximately percent of GDP in 2022, rising to nearly 12.7 percent of GDP in 2031 10.7 D and further thereafter. oubling all currently projected federal individual and corporate income tax collections would be insufficien t to finance the added federal costs of the plan. It is likely that these estimates, which assume the actual cost of M4A would be substantially greater than significant administrative and drug cost savings under the plan, and also assume that healthcare pr oviders operating under M4A will be reimbursed at rates more than 40 percent lower than those currently pai d by private health insurance. JEL codes: I13, I18 Keywords: ealthcare, health care, single - payer, single payer, Medicare for all, health, health h health spending, costs, health expenditures, federal budget Author Affiliation and Contact Information Charles Blahous J. Fish and Lillian F. Smith Chair and Senior Research Strategist Mercatus Center at George Mason University [email protected] Acknowledgments Helpful edits and comments on the text were provided by Robert Graboyes, Richard Foster, Keith Hennessey, Jason Fichtner, Doug Badger, James Capretta, Mark Warshawsky, Marc Goldwein, Jonathan Keisling, and Jessica Paska. Useful consulta tions with respect to - Eakin, Melissa Favreault, methodology were provided by Katherine Baicker, Douglas Holtz Chris Holt, and Tara O’Neill Hayes. © 2018 by Charles Blahous and the Mercatus Center at George Mason University This paper can be accessed at https://www.mercatus.org/publications/federal - fiscal - policy/costs - - - single - payer national healthcare - system

3 The Costs of a National Single - are System Payer Health c Charles Blahous payer healthcare system is a critical The cost of adopting a national single - factor in assessing - payer whether such a system is desirable or practicable. The leading current bill to establish single s (I - VT) Medicare f or All Act (M4A), would under health insurance, Senator Bernie Sanders’ get commitments by approximately $ 3 2 .6 trillion conservative estimates increase federal bud 1 10 years of full implementation (2022 – 20 31), assuming enactment in 2018 . during its first This projected increase in federal healthcare commitments would equal approximately percent of 10.7 GDP in 2022, risi ng to nearly 12.7 percent of GDP in 2031 and further thereafter. For perspective on these figures, consider that doubling all currently projected federal individual and corporate 2 ts of the plan. The income tax collections would be insufficient to finance the added federal cos federal cost increase would by itself be more than two times all currently projected federal 3 discretionary appropriations, including all defense as well as domestic discretionary spending. It is likely that the actual cost of M4A woul d be substantially greater than has been estimated from its legislative text. That text specifies that healthcare providers including hospitals, physicians and others will be reimbursed for all patients at Medicare payment rates, , roughly 40 percent lower than those paid by private insurers during which are projected to be 4 the first implementation. 10 By assuming these payment reductions years of M4A’s proposed 1 For a summary of the provisions of the Medicare for All Act, see Katie Keith and Timothy Jost, “Unpacking the Sanders Medicare - for - All Bill,” Health Affairs , September 14, 2017. 2 This statement refers to income tax collections only, not to Social Security or Me dicare payroll taxes. 3 Congressional Budget Office (CBO) , The Budget and Economic Outlook: 2018 to 2028 , April 2018, table 4 - 1. In other words, it would be less expensive to the federal government to triple all projected appropriations than to enact M4A. 4 Medicare for All Act of 2017, S. 1804, 115th Cong. (2017); and Centers for Medicare and Medicaid Services (CMS) , Office of the Actuary, Projected Medicare Expenditures under an Illustrative Scenario with Alternative June 5, 2018. Payment Updates to Medicare Providers, 3

4 will be implemented and sustained, these cost estimates essentially represent a lower bound. To ease the interpretation of these estimates, the following simplification of the calculations is t (page 7 ) provides further details able 1, using the year 2022 as an example. Table 2 provided in - year estimates. 10 of the Effects of M4A in 2022 Table 1. I Cost of individual effect ndividual effect of M4A spending $3.859 trillion 2022 currently projected personal healthcare + utilization increase billion $435 + healthcare – payment cuts provider – $384 billion – lower prescription drug costs – $61 billio n = 2022 personal healthcare spending under M4A = $3. 849 trillion 2022 currently projected national health expenditures (NHE) $4.562 trillion $3. – de creased personal health spending ($3. 859 T – billion 8 4 9T , per above) – 10 – – cost savings administrative $8 3 billion = 2022 NHE under M4A $4. 46 9 trillion $4. 2022 federal share of NHE under M4A 244 trillion health – c urrently projected federal – subsidies $1.709 trillion $2. = under M4A = net addition to 2022 federal costs 535 trillion As shown in ta ble 1 , US personal healthcare spending is currently projected to be $3.859 trillion in 2022. Enacting M4A would increase healthcare utilization by covering the - sharing for those already insured , and by increasing previously uninsured, by eliminating cost t he range of health services covered. These effects are estimated to add $435 billion to national healthcare spending. The plan would sharply cut payments to providers, subtracting $384 billion, and has also been credited with $61 billion in lowered prescri ption drug costs. Combining these effects results in projected personal health spending in 2022 of $3. 849 billion. trillion, a slight net de crease of $10 4

5 5 National health expenditures (NHE) are currently projected to be $4.562 trillion in 2022. , as calculated in the previous Subtracting the $10 billion decrease in personal health spending , and crediting the plan with $ 8 3 paragraph billion in administrative cost savings results in an NHE projection under M4A of $4. 9 tr illion. Of this, $4. 244 46 trillion in costs would be borne by the federal government. Compared with the current projection of $1.709 trillion of federal healthcare subsidy costs, this would be a net increase of $2. 535 trillion in annual costs, or rou ghly 10.7 percent of GDP. Performing similar calculations for each year results in an estimate that M4A would add approximately $ trillion to federal budget commitments during the period from 32.6 2022 through 20 31, with the annual cost increase re aching nearly 12.7 percent of GDP by 2031 and continuing to rise afterward. Large though these dollar figures are, they are broadly consistent with those estimated by 6 other experts in advance of the M4A bill’s introduction in September 2017. In 2 016, a n Urban Institute (UI) team projected that Senator Sanders’ s proposal as described during his presidential 2026 campaign would add $32 trillion to federal spending in the years spanning 2017 through , a projection that included a $2.94 trillion federa l cost estimate the plan’s p rovisions for covering of 7 - . Also in 2016 , t he Center for Health and Economy long term supports and services (LTSS) from 2017 through 2026 , the (CHE) projected that proposal would increase federal Sanders 8 by $27.3 s budget deficit The CHE score did not include an estimate of increased LTSS trillion. 5 NHE differs from personal health spending in that NHE also includes expenditures for research, structures and and . equipment, administrative costs 6 Cong. (2017). Medicare for All Act of 2017, S. 1804, 115th 7 John Holahan et al. , The Sand ers Single - Payer Healthcare Plan: The Effect on National Health Expenditures and Federal and Private Spending , tables 1 and 9 . (Washington, DC: Urban Institute, 2016) 8 Center for Health and Economy, “Medicare for All: Leaving No One Behind,” HealthAndEco nomy.org , May 1, 2016, table 6. The $27.3 trillion estimate arises from the difference between the two subtotals provided on table 6 for costs and savings, respectively, under the Sanders plan, excluding the deficit effects embedded in the current - law base line. confirmed this interpretation when reviewing a draft of this paper and in a separate email exchange. CHE authors 5

6 costs. rpe estimated the federal financing required for Emory University professor Kenneth Tho 9 not including through 20 2 6, also LTSS. from When the proposal at $24.7 trillion 2017 considering the same years and the same benefit provisions, these other independent estimates quite close to those presented in this paper . are 10 The estimates in this study focus primarily on the year window of 2022 through 2031 - because the M4A bill provides for a four - - in period during which increasing numbers year phase of individuals (phased in by age) would be permitted to buy into a transitional public health plan. Estimating a voluntary take - up rate during this transition period is inherently speculative, and even if that rate could be projected with precise accuracy , the projectio ns would not fully reflect the eventual costs of a national single - - payer system in payer system. Alternatively, if the single the M4A bill were fully effective beginning in 2019, the net additional federal cost would be 10 trillion (co nservatively approximately $ e stimated) during the 27.7 - year window (2019 – 2028) shown in t able 3 (page 22 ) . The details of these and other key assumptions are discussed in the 10 following sections of this paper. 9 Kenneth E. Thorpe, “An Analysis of Senator Sanders Single Payer Plan,” Healthcare - Now.o rg , January 27, 2016. 10 Shifting from private to public financing of medical care would have potentially significant but unforeseeable effects on the allocation of medical goods and services, which this study does not attempt to model. 6

7 T able 2 ns of Dollars . Financial Effects of Medicare for All Act, in Billio 2024 2025 2026 2027 2028 2029 2023 2030 2031 2022 – 2031 2022 ealthcare projected personal h Currently 6,494 3,859 4,077 4,309 4,546 4,824 5,120 5,433 5,766 6,120 a g pendin s + Added i nduced d emand from +435 +459 +485 +5,671 +542 +574 +609 +645 +684 +725 +511 b e i ncreased c overag – A pplying Medicare payment r ates – 384 – 411 − 441 – 473 – – 540 – 577 – 616 – 658 – 702 – 5,307 505 – D rug c ost s avings – 61 – 66 – 70 – 75 – 80 – 86 – 92 – 98 – 105 – 113 – 846 = ealthcare s pending under M4A 3, 849 4, 060 4, 283 4, 509 4, 780 5, 068 H 5, 373 5, 697 6, 041 6, 406 Currently p rojec ted n ational h ealth 7,651 4,562 4,819 5,091 5,370 5,696 6,042 6,410 6,799 7,213 c xpenditures (NHE) e – C hange in h ealthcare spending – 10 – 18 – 26 – 36 – 44 – 52 – 60 – 69 – 79 – 89 – 482 – – A dmin. c ost s avings – 8 3 – 8 8 – 142 – 149 – 158 – 168 – 179 – 190 – 201 1,5 214 – 72 = 4, 469 4, 713 4,923 5, 184 5, 494 5,823 6, 171 6, 541 6,933 7, 348 NHE under M4A d s hare of NHE under M4 A ederal 4, 244 4, 475 4, 67 0 4 , 915 ov’t 5, 207 5, 516 5, 844 6, 191 6, 559 6,950 F g C urrently p rojected n et f ederal h ealth – – 1,833 – 1,709 – 1,770 – – 1,984 – 2,130 2,262 – 2,465 – 2,476 – 2,590 – 2,708 e s ubsidie s 07 A federal b udget c ost under M4A 2, 535 2, 705 2, 837 2,931 3, = 7 3, 254 3, 379 3, 715 3,970 4, 241 32,644 dded A dded federal c ost as a percentage of 10.7 11. 0 % 11. 1 % 11. 0 % 11.1 % % 11.3 % 11.3 % 12.0 % 12.3 % 12.7 % f GD P a , NHE Projections 2017 – 2026 , February 2018, table 2 , extrapolated . The totals calculated here differ slightly from those in the NHE tables (e.g., 3,859 vs. 3,869) because of CMS 19 national aggregates to add inexactly. reconciliation with MEPS data as explained in footnote . In the MEPS data, some small category totals are rounded to 0, causing b actuarial value of insurance by eliminating deductibles and copayments and by expanding coverage categories to This includes effects of covering the uninsured, increasing the include dental, vision, and hearing. c NHE Projections 2017 – 2026 CMS, , extrapolated. , table 1 d This subtracts state “ maintenance of effort ” payments and continued out - of - pocket payments for LTSS, continued private or state funding of research, and capital expenditures from NHE et al. , Sanders Single - Payer Healthcare Plan ; and Medicare for All Act of 2017, S. 1804, 115th . Holahan Cong. (2017). e - provided and ACA marketplace coverage, CHIP, other ACA subsidies and This includes federal Medicaid payments, Medicare outlays net of receipts, tax subsidies for employer , n research funding - mandate penalties and taxes on health insurance plans and providers. See CBO , Federal Subsidies for Health Insurance Coverage et of revenues from employer for People u nder Age 65: 2018 – 2028 , May 23, 2018; CBO , Medicaid Spending and Enrollment — CBO’s April 2 018 Baseline , April 2018; and CBO , Medicare — CBO’s April 2018 Baseline to occur within 2028 because October 1 , April 9, 2018. CBO estimates were extrapolated beyond 2028, with adjustments for the additional Medicare payments projected (the start of the next fiscal year) occur s on a weekend. f , April 9, 2018. 2028 CBO , The Budget and Economic Outlook: 2018 – 7

8 Increased Demand and Utilization M4A would increase healthcare demand and utilization in at least three important ways. First, the plan would provide heal th insurance coverage to all Americans who are currently uninsured, 11 Coverage of the currently uninsured is of healthcare services. greatly increasing their utilization 12 . percent estimated to increase their health service costs by roughly 89 an would expand the range of services covered by existing insurance Second, the pl , 13 and hearing care for all participants. , This , too , would explicitly covering dental, vision utilization of such services in addition to shifting their financing from private to public increase C urrently , only 12 spending, especially for those now reliant on traditional Medicare. percent of all personal healthcare expenses in the United States are paid out of pocket , while 22 percent are . 40 B y contrast , paid by Medicare percent of nationa l dental care expenses are paid out of 14 percent . pocket, while the national share financed by traditional Medicare rounds to 0 This indicates that the addition of dental, vision , and hearing benefits will substantially increase total 15 ce utilization and costs. projected health servi 11 There remain appro ximately 30 million uninsured Americans in 2018. See Centers for Medicare and Medicaid (CMS) , February 2018, table 17. NHE Projections 2017 – 2026 , Services 12 Kenneth Thorpe estimates that covering the uninsured would increase total spending per person by 70 percent, citing research by Jack Hadley and coauthors. Kenneth Thorpe, “Why Sanders’s Single Payer Plan Would Cost More - Than His Campaign Says,” February 29, 2016; and Jack Hadley et al., Covering the Uninsured American Prospect, nation of Current Costs and Sources of Payment, and Incremental Costs of Expanding in 2008: A Detailed Exami (Washington, DC: Henry J. Kaiser Family Foundation, August 2008) . Coverage “assume Hadley and his coauthors that the coverage offered to uninsured people would be broadly si milar to the range of coverage currently held by low - and lower - middle - income people,” rather than the first dollar coverage the M4A bill would provide. Adjusting for increased utilization patterns associated with higher - literature produces an value insurance in recent research estimated utilization increase of 89 percent. Thorpe agrees that 70 percent is “likely low” using the same reasoning. The 89 percent assumption occupies a middle ground between Thorpe’s assumption and the UI team’s projections. I team estimated that spending “for the otherwise uninsured would increase 169.5 percent” after all relevant The U - affecting factors, including utilization increases, were incorporated. See Holahan et al., Sanders Plan cost . 13 Medicare for All Act of 2017, § 101 3. Dental, vision, and hearing services encompassed roughly 5 percent of all US personal health expenses in 2017. See CMS, NHE Projections 2017 – 2026 , table 2. 14 CMS, NHE Projections 2017 – 2026 , tables 5 and 8. 15 The demand increase for these services is est imated at 15 percent, employing the methodology described in the footnotes for the subsequent paragraph. Estimates for vision and hearing services were made with assistance of supplemental data from Berhanu Alemayehu and Kenneth Warner, “The Lifetime Distr ibution of Healthcare Costs,” 42. – Health Services Research 39, no. 3 (2004): 627 8

9 Finally, the plan’s requirement that “no cost - sharing, including deductibles, coinsurance, copayments, or similar charges, be imposed on an individual” would also significantly increase 16 healthcare As a general rule , the greater the percentage of an individual’s healthcare utilization . that is paid by insurance (i.e., the insurance’s actuarial value, or AV), the more healthcare services an individual tends to buy. There is an extensive literature devoted to estimating how much in dividuals increase their use of healthcare as the AV of their insurance increases — which, in the 17 percent . case of M4A, would be to an AV of essentially 100 Providing this first dollar coverage - is estimated to induce 11 percent additional demand for those c urrently covered by private 18 insurance and 16 for those now in traditional Medicare without supplemental coverage. percent 16 Medicare for All Act of 2017, § 202. Minor exceptions are included in the text, including cost - sharing designed to . incent the use of generic drugs cost - sharing for LTSS benefi ts as well as 17 In addition to other references provided with this study, see Robert H. Brook et al. , The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Healthcare Reform Debate (Santa Monica, CA: RAND Corporation, 2006). As the reference no tes, the Rand study was “one of the largest and most comprehensive social science experiments ever performed in the United States,” and “led to over 300 publications, including journal articles, reports, and books.” 18 Estimates of average AV provided by em ployer - sponsored insurance (ESI) include Frank McArdle et al., “How Does the Benefit Value of Medicare Compare to the Benefit Value of Typical Large Employer Plans?: A 2012 Update” (Issue Brief, Kaiser Family Foundation, Menlo Park, CA, April 4, 2012) (86 percent); Thomas G. Moehrle, “Measure of Generosity of Employer Sponsored Health Plans: An Actuarial Value Approach” (Office of Survey Methods Research, Bureau of Labor Statistics, 2015) (88.9 percent) ; Jon R. Gabel et al., “Consumer Cost - Sharing in Market place vs. Employer Health Insurance Plans, 2015,” , December 21, 2015 (83 percent); Commonwealth Fund Analysis of Actuarial Values and Plan Funding Actuarial Research Corporation for the US Department of Labor, vey , May 12, 2017 (84.8 percent); and Linda J. Blumberg, John Using Plans from the National Compensation Sur Holahan, and Erik Wengle, “Are Nongroup Marketplace Premiums Really High? Not in Comparison with Employer Urban Institute , September 2016 (83 percent). Combining and proportionately weighting these estimates Insurance,” for ESI with those for ACA marketplace insurance (see Kaiser Family Foundation, “Marketplace Enrollment by Metal Level,” , June 30, 2016) , cross - KFF State Health Facts referenced with data on the numbers of those enrolled in silver plans receiving cost - sharing assistance, as well as other private insurance (see CMS, NHE Projections 2017 – 2026 , table 17) , produces an aggregate estimate for the AV of private insurance plans of between 82 and 83 percent. The estimate of the induced dema nd increase associated with replacing these insurance policies with single - payer insurance of AV 100 percent was derived on the basis of the HHS Notice of Benefit and Payment Parameters for 2014. See HHS Notice of Benefit and Payment Parameters for 2014, 7 8 Fed. Reg. 15,410 (March 11, 2013). , in Thorpe “Analysis of Senator Sanders Single Payer Plan,” and McArdle et al. estimate the AV for traditional Medicare in the absence of supplemen tal coverage at 80 percent while Daniel W. Bailey, “Actuarial Value and the Actuarial Value of Original A/B Medicare,” In the Public Interest 9, no. 1 (2014): 27 – 34, estimates it at 84 percent. The estimate of the additional demand from those previously enrolled only in traditional Medicare, induced by 100 percent, is a rough midpoint between the estimates that derive from applying the HHS raising Medicare’s AV to Notice factors to these AVs, and Marika Cabral and Neale Mahoney’s estimates of increased utilization observed in Medicare beneficiaries when they acquire Medigap ins urance that covers most expenses. See Marika Cabral and Neale Mahoney, “Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap” . (NBER Working Paper No. 19787, National Bureau of Economic Research, Cambridge, MA, October 2017) 9

10 Provider Payment Reductions To offset the substantial cost increases created by stimulating additional consumer demand for and ation of healthcare, the M4A bill would constrain expenditures by subjecting healthcare utiliz 19 including hospitals, physicians to Medicare payment rates. and others — — providers Under , , Medicare reimburses healthcare providers at much lower rates than p rivate health current law insurance does. In 2014, Medicare hospital payment rates were 62 percent of private insurance payment rates and are currently projected to decline to below 60 percent by the time M4A would be implemented, and to decline further afterward. Med icare physician payment rates were 75 of private insurance rates in 2016 and , per the terms of the Medicare Access and CHIP percent , are projected to decline sharply in relative terms in Reauthorization Act of 2015 (MACRA) 20 60 percent within the first full decade of M4A. future years, also falling below The M4A Act as introduced specifies that provider payment amounts are to be consistent 21 with those paid under current Medicare law. The adoption of Medicare payment rates would represent a substantial reduct ion in provider reimbursements for care provided to everyone now covered by private insurance (though it would also be a temporary increase in physician payments for those now covered by Medicaid, which currently pays physicians at lower rates 19 The methodology for estimating cost increases arising from greater utilization is as follows. Estimates of national personal healthcare spending, total healthcare consumption, and NHE were taken from CMS, NHE Projections 2017 – 2026 . Estimates for years beyond 2026 were made by extrapolating the projected rates of – 2026 period. The share of expenditures financed by different growth for these aggregates at the end of the 2017 , “Medical Expenditure sources was determined by data from the US Department of Health and Human Services AHRQ: Agency for Healthcare Research and Quality Panel Survey,” , accessed April 8, 2018. Discrepancies between NHE and MEPS aggregates were resolved with assistance of insights in Didem Bernard et al. , “Reconciling Medical Expenditur e Estimates from the MEPS and NHEA , 2007 ,” Medicare and Medicaid Research Review 2, no. 4 (2012). Fortuitously, the ratios of the discrepancies in that article almost analyzed exactly matched those the 2014 NHE and MEPS data, making it straightforw ard to scale the reported between results in the MEPS to the NHE aggregates. This in turn enabled estimates of the shares of national health spending financed by different insurance sources as well as out of pocket. Utilization changes were calculated for differen t populations according to their current sources of health coverage, and the resulting spending projections for each population were assembled to create aggregate personal healthcare spending projections under M4A. 20 CMS , Office of the Actuary, Projected M edicare Expenditures under an Illustrative Scenario with Alternative Payment Updates to Medicare Providers, June 5, 2018. 21 Medicare for All Act of 2017, § 611. 10

11 22 of their For example, in 2014 , hospitals were reimbursed just 89 percent than does Me dicare). costs of treating Medicare patients and 90 percent of their costs of treating Medicaid patients — losses that were offset by hospitals collecting private insurance reimburseme nt rates equaling 23 percent of their costs. 144 It is unclear whether current - law Medicare provider and physician payment schedules would be upheld even in the absence of M4A’s enactment. For example, the schedule for Medicare physician payment growth const raints recently enacted in MACRA replaced other constraints under the previous Sustainable Growth Rate (SGR) formula, which were repeatedly 24 It remains to be seen overridden in periodic legislation before more recently being eliminated. whether MACRA will effectively restrain Medicare physician payment levels where SGR did not, as well as whether Affordable Care Act (ACA) provisions will effectively restrain Medicare provider costs over the long term. Furthermore, it is not precisely predictable how hospita ls, physicians , and other healthcare providers would respond to a dramatic reduction in their reimbursements under M4A, well below their costs of care for all categories of patients combined. The C enters for M edicare and Medicaid S ervices (CMS) Office of t he Actuary has projected that even upholding current - law reimbursement rates for treating Medicare beneficiaries alone would cause nearly half of all 25 The same study found tha t by 2019, hospitals to have negative total facility margins by 2040. — cent of hospitals will lose money treating Medicare patients over 80 a situation M4A would per extend, to a first approximation, to all US patients. Perhaps some facilities and physicians would be 22 CMS, Projected Medicare Expenditures . 23 TrendWatch Chartbook 2 016: Trends Affecting Hospitals and Health Systems , American Hospital Association, 2016, appendix 4, table 4.4. 24 Stan Veuger and Jeffrey Clemens, “Repeal of the Medicare Sustainable Growth Rate: Direct and Indirect Consequences,” AMA Journal of Ethics 17, no. 11 (2015): 1053 – 58. 25 CMS, Projected Medicare Expenditures . Also see CMS , Office of the Actuary, Simulations of Affordable Care Act Medicare Payment Update Provisions on Part A Provider Financial Margins , June 5, 2018. 11

12 able to generate heretofore unachieved cost savings that would enable t heir continued functioning without significant disruptions. However, at least some undoubtedly would not, thereby reducing the supply of healthcare services at the same time M4A sharply increases healthcare demand. It is h the confluence of these factors would reduce individuals’ impossible to say precisely how muc timely access to healthcare services, but some such access problems almost certainly must arise. some other studies have Anticipating these difficulties, assumed that M4A payment rates must exceed current - law Medicare payment rates to avoid sending facilities into deficit on average 26 or to avoid triggering unacceptable reductions in the provision and quality of healthcare services. These alternative payment rate assumptions substantially increase t he total projected costs of M4A. Specifically, they would mean payment rates being set higher than under current Medicare they are and lower than those now paid by private insurance. Even with a higher payment rate law at “not all increased demand could be met because provider assumption, the UI team determined th 27 i nsufficient . ” This constraint is reflected in their final cost estimates. capacity would be ’s In contrast with Thorpe and the UI team’s earlier estimates , t he estimates in this study are based i nstead on the language of the M4A bill as subsequently introduced, imposing Medicare payment rates on all providers and thereby substantially reducing national average provider 28 tot Had this study assumed instead that payment rates relative to current law. al provider payment rates under M4A would be set to remain equal on average to the current - law blend of higher 26 Holahan et al., Sanders Plan . 8, 13, and 16; and Thorpe, “Ana lysis of Senator Sanders Single Payer Plan,” 2 and 6. 27 Sanders Plan , 8. Holahan et al., 28 Medicare for All Act of 2017, § 611. Again, this also includes an offsetting increase for physicians currently treating Medicaid patients. First, NHE data were used to divide projected personal healthcare expenditures into shares for hospital care, professional or physician services, home healthcare, nursing care, and other healthcare. Then, NHE tables 6, 7, 10, 13, and 14 were used to determine the share of each of t hese expenditures paid by private insurance under current law. Provider payments for costs now incurred by private insurance in each of these areas were reduced d by John D. Shatto according to the projected ratios of Medicare payment levels to private payment levels specifie and M. Kent Clemens in CMS, Office of the Actuary, Projected Medicare Expenditures under an Illustrative Scenario with Alternative Payment Updates to Medicare Providers, June 5, 2018. Projected physician payments under Medicaid were inc reased to Medicare levels according to the percentages specified in CMS, Projected Medicare Expenditures . The resulting aggregate payment reductions were then reconciled with MEPS data. 12

13 private and lower public reimbursement rates, the resulting cost estimates would be substantially larger: $ 0 trillion from 2022 38. 20 31, or $ 32. 1 trillion if M4A were fully implemented through 29 2019 through 20 28. of GDP in 2031, The federal cost increase would approach 14.8 percent from the last of the initial 10 years of proposed full implementation. This altered assumption would t in these estimates, on an annual basis, being within the range of estimates spanned by resul 30 , and the UI team, all working in advance of specific legislative text. Thorpe, CHE Drug Costs This analysis credits the M4A proposal with approximately $846 billion in additional savings over the 2022 20 31 period from negotiating lower prices for prescription drugs. This is an – aggressive assumption reflecting the intent of the bill to empower the s ecretary of Health and Human Services (HHS) to negotiate lower drug pri ces on behalf of beneficiaries and specifically 31 to “promote the use of generic medications to the greatest extent possible.” There are limits to the potential effectiveness of this approach to lowering healthcare costs. Generics have prices 75 to 90 perce nt lower than those of brand - name drugs, but they already make up roughly 85 32 percent of all prescription drugs sold. 29 The average of current - law reimbursement rates is a function of a bl end of private insurance rates (which are higher) and public sector rates (which are lower). In other words, the alternative assumption described in this rates so that paragraph specifies that M4A’s universal payment rates would be set between current public and private national average reimbursement rates do not change relative to current law. 30 – 32. 1 A $ 2028 would be approximately equivalent to a $ 28.9 trillion cost over trillion federal cost estimate over 2019 2017 – 2026 if fully effective during t hat time, a number within the range of estimates produced separately by the Center for Heath and Economy, Kenneth Thorpe, and the Urban Institute. Those estimates, like those in this study, project the effects of adopting public fin ancing along the lines stipulated by the text of the M4A Act. It should be noted that fiscal outcomes could vary significantly if the private sector retains a substantial role in healthcare financing, as has remained the case in several European nations. S ee Sarah Thomson, Thomas Foubister, and Elias Mossialos, Financing Healthcare in the European Union: Challenges and Policy Responses (Copenhagen: World Health Organization, 2009). 31 Medicare for All Act of 2017, § 614. 32 – Medicare Payment Advisory Commissio n, Report to the Congress: Medicare Payment Policy , March 2017, 409 10. Also see Statista, “Proportion of Branded Versus Generic Drug Prescriptions Dispensed in the United States from 2005 to 2016,” Statista , May 2017. Other estimates of current generic dr ug penetration are higher. For 2017 Generic Drug Access and Savings in the U.S. , 2017. example, see Association for Accessible Medicines, 13

14 A dditionally, p rescription drugs account for only 10 percent of total national health 33 virtually This analysis assumes expenditures. perfe ct - name success for M4A in replacing brand drugs with generics, both for those now on Medicare as well as for the population as a whole; 34 therefore, actual savings are likely to be less than assumed under these projections. It is a matter of wide speculati on whether granting negotiating power to the HHS s ecretary could 35 produce savings beyond these aggressive assumptions with respect to generic drug penetration. such a grant of power achieved greater savings , however, such additional savings are Even if ely to be offset by imperfect success in eliminating brand - name drug purchases in favor of lik 36 These cost estimates do not reflect other potential effects of the proposed policy, such generics. as lessened pharmaceutical innovation. Administrative Savings Th private generated by replac ing is analysis assumes substantial administrative cost savings insurance with national single - payer insurance , specifically a reduction of seven percentage points (from an estimated 13 percent to 6 percent) in the administrative cost of covering those 37 Again, this is an aggressive estimate of administrative savings now holding private insurance. that is more likely to lead to M4A costs being underestimated than overestimated. 33 CMS, NHE Projections 2017 – 2026 , table 2. This figure does not include drugs dispensed in an inpatient setting. 34 Spe cifically, the assumption is that the approximately 15 percent of prescription drugs that are now brand - name drugs will all be replaced by generics with an average cost savings of 80 percent per prescription, reducing total prescription drug costs by 12 pe rcent. 35 See Committee for a Responsible Federal Budget, “Fact Sheet: How Much Money Could Medicare Save by Negotiating Prescription Drug Prices?,” CRFB.org , April 11, 2016. 36 For example, the fact that prices are not now negotiated by the federal governme nt may be a factor currently contributing to the already high levels of generic penetration of the drug market. 37 See page 5 of the PDF version of Center for Health and Economy, “Medicare for All: Leaving No One Behind,” HealthAndEconomy.org , May 1, 2016. 14

15 Current administrative cost rates for Medicare as a whole are cited as being roughly 4 38 It is unlikely that the population percent, though closer to 6 percent for Medicare Advantage. now privately insured could be covered by M4A with administrative costs as low as 4 percent. Administrative cost rates are ca lculated as a percentage of total insurance costs, and these total costs per capita under private insurance are currently less than half of what they are in 39 In other words, one reason Medicare’s administrative cost rates appear to be so Medicare. much low er than private insurance rates is that they are expressed as percentages of Medicare’s overall per capita costs, which are much higher. These higher Medicare costs exist primarily because Medicare serves an older population that consumes more healthcare s ervices than the generally younger population now served by private insurance. Moreover, even if administrative cost rates could be lowered by more than seven percentage points, there would be offsetting cost increases. A further reason private insurance a dministrative costs are relatively higher is the necessity of policing fraudulent or other improper payments to ensure an insurer’s continued solvency and to provide competitive value to its customers. Although government also polices fraud within its heal th insurance programs, financial survival and business competitiveness are concerns from which government - provided insurance is generally exempt. The Government Accountability Office found approximately 38 For the 4 percent citation, see page 5 of the PDF version of Center for Health and Economy, “Medicare for All: HealthAndEconomy.org Leaving No One Behind,” , May 1, 2016. For the 6 percent figure, see Kip Sullivan, “How to Think Clearly about Medicare Adm inistrative Costs: Data Sources and Measurement,” Journal of Health Politics, Policy and Law – 504. Holahan and his coauthors conclude that 6 percent is “the appropriate 38, no. 3 (2013): 479 figure for estimating proposals that build upon the entire Medicar e program.” Holahan et al., Sanders Plan , 9. 39 US Department of Health and Human Services, “Medical Expenditure Panel Survey,” AHRQ: Agency for Healthcare Research and Quality , accessed April 8, 2018. Also see Robert A. Book, “Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance” Heritage Foundation , June 25, 2009. Book notes that Medicare’s “administrative costs are spread over a larger base of actual healthcare costs.” MEPS data substantiate Book’s assertion. For example, the ME PS data show that in 2014, individuals younger than 65 making claims on private insurance had an average of $4,421 in expenses per person, whereas those over 65 making claims on penses per person for those carrying Medicare alone had average expenses of $9,221 per person, with still higher ex Medicare in addition to other private or public insurance. 15

16 $96 billion in improper Medicare and Medicaid payme the nts in 2016, by itself more than twice 40 total government expenditures on health insurance administration. One apparent consequence of government’s lesser investment in insurance administration 41 Considering the various is a substantial additional cost associated with improper p ayments. factors acting in combination, it is unlikely that total savings arising from less expensive administration could exceed the seven percentage point reduction assumed here. Beyond this, other policy and political dynamics o f federally administered insurance should tend to increase total costs. This is evident in the text of the M4A bill, which , among its other provisions , includes a line item authorizing expenditures of up to 1 percent of the total national health budget dur ing its first five years for “programs providing assistance to workers who perform functions in the administration of the health insurance system and who may 42 experience economic dislocation as a result of the implementation of this Act.” The policy and po litical dynamics that gave rise to this proposed spending program would likely give rise to others in the course of enacting and implementing M4A, reducing net savings from lower ed administrative costs. The M4A bill provides for a national health budget th rough which the federal government would finance additional health - related spending in a number of areas, including 43 health professional education, innovation , and capital expenditures. It is impossible to predict precisely the extent to which private - sect or investments would be crowded out by increased 40 Government Accountability Office, “Medicare — High Risk Issue,” , accessed April 11, 2018; and GAO.gov Government Accountability Office, “Medicaid — High Risk Issu e,” accessed April 11, 2018. Government administration costs are from CMS, NHE Projections 2017 – 2026 , table 2. 41 As another example, see Office of Inspector General, Department of Health and Human Services, California Made Medicaid Payments on Behalf of Ne wly Eligible Beneficiaries Who Did Not Meet Federal and State Requirements , February 2018. The OIG found that in a sample of 150 beneficiaries, Medicaid payments were made on behalf of 38 individuals who were either ineligible or potentially ineligible for coverage under the program. 42 Medicare for All Act of 2017, § 601. 43 Medicare for All Act of 2017, § 601. 16

17 federal activity in these areas. These projections incorporate rough estimates of these health spending constitutes less than 5 percent of all movements, but because this subcategory of 44 NHE, ine vitable errors of estimation will not qualitatively affect the aggregate projections. - Term Services and Supports Long contains a “ maintenance of effort ” provision requiring states to continue their The M4A bill LTSS expenditures under Medicaid current - law levels, automatically indexing the growth of at 45 these commitments going forward. Lacking a model that permits an independent estimate of this provision’s effects , this study incorporates projections of state Medicaid spending on LTSS under curren t law published by the UI team , interpolating and extrapolating from the UI team’s of continuing state expenditures published figures to arrive at estimates conforming to the effective dates in the M4A bill. the resulting Consistent with the assumptions employed throughout this paper, implicit estimates of national and federal spending on LTSS should be regarded as conservative. Although the M4A bill does not explicitly provide for new LTSS coverage, its broad er expansion of health insurance coverage would likely increase the numbers of individuals utilizing LTSS authorized under current law. This study’s assumption of no net increase in LTSS benefits s “maintenance of effort” provision benefit utilization, in addition to the assumption that M4A’ is an additional factor successfully binds state governments, ’ contributing to these projections being more likely to underestimate costs than to overestimate them. 44 CM S, NHE Projections 2017 – 2026 , table 2. It is assumed that the federal share of healthcare research would remain essentially unchanged but that the federal government would finance a preponderance of new capital expenditures, based on a rough interpretation of the Medicare for All Act text. Alternative assumptions would cause only very minor changes to the aggregate cost projections. 45 Medicare for All Act of 2017, § 204 and § 901. This “ maintenance of effort ” requirement does not apply to the state Medicaid spending. law rest of curren t - 17

18 Effects on National Health Expenditures and the Federal Budget 2 summarizes the financial effects of the M4A bill over its first 10 years of full Table through implementation, which would be 2022 20 31 if enacted in 2018 . One striking finding evident in the table is that , even under the assumption that provider payments for treating patients now covered by private insurance are reduced by over 40 percent , aggregate health expenditures remain virtually unchanged: national personal healthcare costs by less decrease than 2 percent , while total health expenditures decrease by only 4 percent , even after assuming substantial administrative cost savings. The additional healthcare demand that arises from eliminating copayments, providing additional categories of benefits, and covering the currently uninsured nearly offsets potential savings associated with cutting provider payments and achieving lower drug costs. Thus, the essential expenditure change wrought by movement to a single - with government payer system would be to replace private spending on healthcare 46 nanced by taxpayers. spending fi At the same time, more generous healthcare insurance would be provided to everyone at the expense of healthcare providers, who would face reimbursements substantially below their service ould sustain costs. As noted previously, whether providers c such losses and remain in operation, and how those who continue operations would adapt to such dramatic payment reductions, are critically important questions. While these estimates show little net change in NHE, the same cannot be said of the projected effects on the federal budget. Table 2 includes an estimate for the net increase in , is federal health budget commitments of $ trillion from 2022 through 20 31, which, by itself 32.6 more than all federal individual and corporate income taxes projected to be collected during that 46 Again, the assumption of public financing is retained throughout this study pursuant to the language of the M4A bill text. International experience has been that private financing often re tains a substantial role. See Thomson, . Financing Healthcare in the European Union Foubister, and Mossialos, 18

19 47 time period. This net increase in federal budget commitments was calculated by comparing M4A with Congressional Budget Office (CBO) estimates of projected federal obligations under current - law federal subsidies, inclu ding not only direct spending on Medicare, Medicaid, the , and ACA marketplaces, but also subsidies Children’s Health Insurance Program (CHIP) , provided through the tax code such as the tax exclusion for employer - provided coverage as well - related tax credits. Some of these current subsidies are scored under budgeting as ACA conventions as federal revenue losses rather than spending outlays, but they all contribute to f sidy ederal commitments for healthcare under current law. Netted against the current federal sub totals are certain revenue collections that would presumably be obviated in the course of enacting single - payer healthcare, including penalties on employers for failing to provide health insurance, taxes on health insurance providers, and the so - calle d Cadillac plan tax on high - premium health 48 insurance plans. It should be noted that M4A’s elimination of employer - sponsored insurance, including the federal tax preferences now accorded to it, should increase worker wages net of employer - provided health b enefits. These estimates incorporate the increased federal revenues CBO projects to arise from subjecting these higher expected wages to federal taxation. Thus, at the same time 47 Budget and Economic Outlook , table 3 - 1. For purposes of this and other calculations, this study assumes CBO, egard to the balance of funds in the M4A’s Universal Medicare Trust Fund. full benefits will be paid without r M4A’s legislative text provides that such a trust fund will be established and will receive funds that would otherwise be appropriated to finance payments for Medicare, Medicaid, and other federal health programs, as well as revenues arising from changing the tax treatment of private insurance. The trust fund revenue resources For enumerated in the M4A text could fall well short of the amounts necessary to finance full promised benefits. example, under current law the revenues allocated to the Medicare Hospital Insurance (HI) Trust Fund are insufficient to finance Medicare HI benefit payments, with the result that after HI Trust Fund depletion (now be inadequate to fully cover costs” and therefore “payments would be projected for 2026), “revenues would reduced.” See Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2018 Annual Report , June 5, 2018, 2 and 26. Although M4A would establish a trust fund that is analogous to Medicare’s HI trust fund in some respects, the legislative language has been interpreted herein as a federal commitment to pay full benefits irrespec . tive of trust fund asset levels 48 CBO , Federal Subsidies for H ealth Insurance Coverage for People u nder Age 65: 2018 – 2028 , May 23, 2018; , April 2018; and CBO Medicaid Spending and Enrollment — CBO’s April 2018 Baseline , CBO , Medicare — CBO’s April 2018 Baseline , April 9, 2018. 19

20 that M4A would dramatically increase federal spending, it would increase taxab le worker wages provided benefits, while also relieving individuals, families net of employer and employers of the , - substantial health expenditures they would experience under current law. It would also relieve as ns are transferred to the federal government. states of such Medicaid expenditure obligatio These offsetting effects should be considered when weighing the implications of requiring federal taxpayers to finance the enormous federal expenditure increases under M4A. od as projecting the added federal cost commitments These estimates should be understo under M4A, as distinct from its net effect on the federal deficit. To the extent that the cost of , or other revenue increases, the net M4A is financed by new payroll taxes, premium collections 49 he federal budget deficit would be substantially less. effect on t t able 2 are enlarged by encompassing the 2022 Because the dollar figures presented in presents a hypothetical alternative t able 3 31 window for full implementation, 20 through the plan’s benefit provisions are fully effective by 2019. In this scenario in which all of , the 10 - year (2019 – 20 28) net federal budget cost would be $2 7.7 trillion, hypothetical scenario 11.3 10.4 percent of GDP annually in 2019 to rising from roughly percent in 2028. , respectively) Tables and 5 (pages 23 and 24 present alternative scenarios in which 4 provider payment levels are not reduced to Medicare rates ; i nstead , provider and physician reimbursement rates remain unchanged from current projections on national avera ge. Under this scenario , the net added federal costs of M4A would be $ 38.0 trillion from 2022 through 20 31, percent rising from approximately percent of GDP in 2022 to nearly 14.8 of GDP in 2031 12.3 and continuing to rise afterward. If the be nefit provisions of M4A under this higher payment scenario were fully effective by 2019 instead , then added federal costs would be $ 32.1 trillion by 49 Beyond the transition period, the text of the Medicare for All Act does not specify what premiums might ultimately be assessed. 20

21 - 2028 11.9 percent of GDP to 13.3 percent of GDP over th at 10 , rising from roughly year period . For perspective on these estimates, consider that all of the various current law federal health - subsidies tabulated earlier in this paper currently total approximately 6.6 percent of GDP, to which the costs above would be added. As noted earlier, the feder al cost of enacting the M4A Act would be such that doubling all federal individual and corporate income taxes going forward would be insufficient to fully , even under the assumption that provider payment rates are reduced by over 40 finance the plan percen for treatment of patients now covered by private insurance. Such an increase in the scope t of federal government operations would precipitate a correspondingly large increase in federal 50 taxation or debt and would be unprecedented if undertaken as an endur ing federal commitment. There should be a robust public discussion of whether these outcomes are desirable and practicable before M4A’s enactment is seriously considered. 50 rily upon US entry into World War Federal expenditures as a percentage of GDP rose dramatically but tempora II, as distinct from the ongoing spending commitments associated with M4A. 21

22 Appendix: Additional Data Tables Table 3. Financial Effects of Medicare for All Act if Benefits Were Fully Effective in 2019, in Billions of Dollars 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019 – 2028 2019 a 3, 458 3,655 3,859 4,077 4,309 3,276 4,546 4,824 5,120 5,433 Currently projected personal healthcare spending b +370 + Added induced demand from increased coverage +412 +435 +459 +485 +511 +542 +574 +609 +4,787 +390 – Applying Medicare payment rates – 314 – 337 – 360 – 384 – 411 – 441 – 473 – 505 – 540 – 577 – 4,342 – Drug cost savings – 50 – 54 – 57 – 61 – 66 – 70 – 75 – 80 – 86 – 92 – 692 4, = Healthcare spending under M4A 281 3, 457 3, 650 3 , 849 4, 060 3, 283 4, 509 4, 780 5, 068 5, 373 c health expenditures (NHE) 3,868 4,091 4,322 4,562 4,819 5,091 Currently projected national 5,370 5,696 6,042 6,410 + – Change in healthcare spending + 5 – 0 – 5 – 10 – 18 / – 26 – 36 – 44 – 52 – 60 – 246 – – Admin. cost savings – 70 – 74 – 78 – 83 – 88 – 142 – 149 158 – 168 – 179 – 1, 190 = NHE under M4A 802 4, 016 4, 239 4, 469 4, 713 4,923 5, 184 5, 494 5,823 6, 171 3, d 67 3, 6 11 3, 8 15 4, 0 26 4, 244 4, 475 4, Federal gov’t share of NHE under M4A 0 4,915 5, 207 5 , 516 5, 844 e – 1,406 – 1,475 – 1,573 – 1,709 – 1,770 Currently projected net federal health subsidies – 1,833 – 1,984 – 2,130 – 2,262 – 2,465 – = Added federal budget cost under M4A 2, 2 05 2, 3 40 2, 454 2, 535 2, 7 05 2, 83 7 2,931 3, 077 3, 254 3, 379 27,716 f Added federal cost as a percentage of GDP 10. 4 % 10. 6 % 10.7 % 10.7 % 11. 0 % 11. 1 % 11. 0 % 11. 1 11. 3 % 11. 3 % % a CMS, Projections 2017 – 2026 , February 2018, table 2, extrapolated. The totals calculated here differ slightly from those in the NHE tables (e.g., 3,859 vs. 3,869) because of NHE 19 reconciliation with MEPS data as explained in footnote category totals are rounded to 0, causing national aggregates to add inexactly. . In the MEPS data, some small b This includes effects of covering the uninsured, increasing the actuarial value of insurance by eliminating deductibles and c opayments and by expanding coverage categories to include dental, vision, and hearing. c NHE Projections 2017 2026 , table 1, extrapolated. CMS, – d effort ” This subtracts state “maintenance of and continued out - of - pocket payments for LTSS, continued private or state funding of research, and capita l expenditures payments Sanders Single - Payer Healthcare Plan ; and Medicare for All Act of 2017, S. 1804, 115th Cong. (2017). from NHE. Holahan et al., e - provided a nd ACA marketplace coverage, CHIP, other ACA subsidies and This includes federal Medicaid payments, Medicare outlays net of receipts, tax subsidies for employer - mandate penalties and taxes on health insurance plans and providers. See CBO, Federal Subsidies for Health Insurance Coverage research funding, net of revenues from employer for People under Age 65 : 2018 – 2028 , May 23, 2018; CBO, Medicaid Spending and Enrollment — CBO’s April 2018 Baseline , April 2018; and CBO, Medicare — CBO’s April 2018 Baseline , April 9, 2018. CBO estimates were extrapolated beyond 2028, with adjustments for the additional Medicare pa yments projected to occur within 2028 because October 1 (the start of the next fiscal year) occurs on a weekend. f , April 9, 2018. CBO, The Budget and Economic Outlook: 2018 – 2028 22

23 Table 4 t without Provider Payment Cuts, in Billions of Dollars . Financial Effects of Medicare for All Ac 2022 – 2029 2025 2026 2027 2028 2030 2031 2023 2024 2022 2031 a p e r sonal h ealthcare s pending 3,859 4,077 4,309 4,546 4,824 5,120 5,433 5,766 6,120 6,494 Currently p rojected b +5,671 d emand from i ncreased c overage i +435 +459 +485 +511 +542 +574 +609 +645 +684 +725 + Added nduced Provider ayment c hanges 0 0 0 0 p 0 0 0 0 0 0 0 – Drug c ost s avings – 61 – 66 – 70 – 75 – 80 – 86 – 92 – 98 – 105 – 113 – 846 5,950 = Healthcare under M4A 4, 233 4, 471 4, 724 4,982 5, 286 5, 608 pending 6, 313 6, 699 7, 107 s Currently rojected n ational p ealth e xpenditures h 7,651 4,562 4,819 5,091 5,370 5,696 6,042 6,410 6,799 7,213 c (NHE) + Change in h ealthcare s pending + 374 + 394 + 415 + 436 + 462 + 489 + 517 + 547 + 579 + 613 + 4,824 – – Admi n. c ost s avings – 8 3 – 8 8 – 142 – 149 – 158 – 168 – 179 – 190 – 201 – 214 1, 5 72 = NHE under 4, 852 5, 125 5, 364 5, 657 5,999 6, 363 6, 748 7, 157 7, 590 8, 050 M4A d 712 gov’t M4A 4, 628 4,886 5, 111 5, 388 5, s 6, 056 6, 421 6,807 7, 217 7,651 Federal hare of NHE under e Currently p rojected n et f ederal h ealth s ubsidies – – 1,709 – 1,770 – 1,833 – 1,984 – 2,130 – 2,262 – 2,465 – 2,476 – 2,590 – 2,708 f b udget c ost under M4A 2,919 3 ,117 3, 278 3, 404 ederal 3, 582 3,794 3,956 4, 33 1 4,627 4,943 37,950 = Added f f ederal c ost as a p ercentage of GDP Added 12.3 % 12.7 % 12.8 % 12.8 % 13. 0 % 1 3 .2% 1 3 .3% 14.0 % 14.4 % 14.8 % a NHE Projections 2017 – 2026 , February 2018, table 2 , extrapolated . The totals calculated here differ slightly from those in the NHE tables (e.g., 3,859 vs. 3,869) because of CMS , . In the MEPS data, some small category totals are rounded to 0, causing national aggregates to add inexactly. 19 reconciliation with MEPS data as explained in footnote b actuarial value This includes effects of covering the uninsured, increasing the by expanding coverage categories to of insurance by eliminating deductibles and copayments and , vision, and hearing. include dental c NHE Proj – 2026 , table 1, extrapolated. ections 2017 CMS, d state “ maintenance of effort ” payments and continued out - of - pocket payments for LTSS, continued private or state funding of research, and capital expenditures This subtracts . Holahan et a l. , Sanders Single - Payer Healthcare Plan ; and Medicare for All Act of 2017, S. 1804, 115th from NHE Cong. (2017). e - ot her ACA subsidies and This includes federal Medicaid payments, Medicare outlays net of receipts, tax subsidies for employer provided and ACA marketplace coverage, CHIP, , net of revenues from employer research funding mandate penalties and taxes on health insurance plans and providers. See CBO , Federal Subsidies for Health Insurance Coverage - for People u nder Age 65: 2018 – 2028 , May 23, 2018; CBO , Medic aid Spending and Enrollment — CBO’s April 2018 Baseline , April 2018; and CBO , Medicare — CBO’s April 2018 October 1 Baseline to occur within 2028 because , April 9, 2018. CBO estimates were extrapolated beyond 2028, with adjustments for the additional Medicare payments projected (the start of the next fiscal year) occur s on a weekend. f , April 9, 2018. CBO , The Budget and Economic Outlook: 2018 – 2028 23

24 Table 5. Financial Effects of Medicare for All Act in 2019 , without Provider Payment Cuts if Benefits Were Fully Effective in Billions of Dollars 2019 – 2022 2023 2024 2025 2019 2027 2028 2020 2021 2026 2028 a p ersonal h ealthcare s pending 5,433 3,276 3, 458 3,655 3,859 4,077 4,309 4,546 4,824 5,120 Currently p rojected b nduced emand from i ncreased coverage i +370 +390 +412 +435 +459 +485 +511 +542 +574 +609 +4,787 d + Added ayment c hanges 0 0 0 0 0 0 0 0 0 0 0 p Provider Drug c ost s avings – – – 54 – 57 – 61 – 66 – 70 – 75 – 80 – 86 – 92 – 692 50 = Heal s pending under M4A 3, 595 3, 794 4, 010 4, 233 4, 47 1 4, 724 4,982 5, 286 5, 608 5,950 thcare rojected ational h ealth e xpenditures n Currently p 3,868 4,091 4,322 4,562 4,819 5,091 5,370 5,696 6,042 6,410 c (NHE) h eal thcare s pending + 319 + 336 + 355 + 374 + Change in 394 + 415 + 436 + 462 + 489 + 517 + 4,096 + – Admin. c ost s avings – 70 – 7 4 – 7 8 – 8 3 – 8 8 – 142 – 149 – 158 – 168 – 179 – 1, 1 90 = NHE under M4A 4, 117 4, 353 4, 598 4, 852 5, 12 5 5, 364 5, 657 5,999 6, 363 6, 748 d Federal s hare of NHE under M4A gov’t 3,925 4, 15 2 4 ,386 4, 628 4,886 5, 111 5, 388 5, 712 6, 056 6, 421 e p rojected n et f ederal h ealth s ubsidies – 1,406 – 1,475 – 1,5 73 – – – 1,770 – 1,833 – 1,984 – 2,130 – 2,262 – 2,465 Currently 1,709 = Added ederal b udget c ost under M4A 2, 519 2, 67 7 2, 813 2,919 f , 117 3, 278 3, 40 4 3, 582 3,79 4 3,956 32,059 3 f f ederal c ost as a p ercentage of GDP 1 11.9 % 1 2. Added % 12.3 % 12.3 % 1 2.7 % 1 2.8 % 1 2.8 % 13. 0 % 1 3 .2% 1 3 .3% a NHE Projections 2017 – 2026 , February 2018, table 2 , extrapolated . The totals calculated here differ slightly from those in the NHE tables (e.g., 3,859 vs. 3,869) because of CMS , . In the MEPS data, some small category totals are rounded to 0, causing national aggregates to add inexactly. 19 reconciliation with MEPS data as explained in footnote b expanding coverage categories to of This includes effects of covering the uninsured, increasing the by actuarial value insurance by eliminating deductibles and copayments and include dental, vision, and hearing. c NHE Projections 2017 2026 , table 1, extrapolated. – CMS, d state “ maintenance of effort ” payments and continued out - of - pocket payments for LTSS, continued private or state funding of research, and capital expenditures This subtracts . Holahan et al. , Sanders Single - Payer Healthcare Plan ; and Medicare for All Act of 2017, S. 1804, 115th from NHE Cong. (2017). e dicare outlays net of receipts, tax subsidies for employer provided and ACA marketplace coverage, CHIP, other ACA subsidies and This includes federal Medicaid payments, Me - , net of revenues from employer - research funding See CBO , Fe deral Subsidies for Health Insurance Coverage mandate penalties and taxes on health insurance plans and providers. for People u nder Age 65: 2018 – 2028 , May 23, 2018; CBO , Medicaid Spending and Enrollment — CBO’s April 2018 Baseline , April 2018; and CBO , Medicare — CBO’s April 2018 Baseline apolated beyond 2028, with adjustments for the additional Medicare payments projected to occur within 2028 because October 1 , April 9, 2018. CBO estimates were extr (the start of the next fiscal year) occur s on a weekend. f , April 9, 2018. 2028 CBO , The Budget and Economic Outlook: 2018 – 24

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Final Reports of Technical Review Of Costing Tools Commissioned by an Inter-agency Steering Committee and the Partnership for Maternal, Newborn and Child Health This package contains the final reports...

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ppacacon

111 TH C ONGRESS " ! LEGISLATIVE COUNSEL P RINT 111–1 2d Session COMPILATION OF PATIENT PROTECTION AND AFFORDABLE CARE ACT [As Amended Through May 1, 2010] INCLUDING P ATIENT P ROTECTION AND A FFORDAB...

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E:\PUBLAW\PUBL031.115

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Untitled

Untitled

Harmoniz ed vision 4 hedule of the United States (2019) Re Tariff Sc Annotated f poses ting Pur or Statistical Repor GN p .1 GENERAL R ATION ULES OF INTERPRET inciples: wing pr ollo y the f verned b i...

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