CBO analyst tests single-payer healthcare system concepts

What do you want to know

  • The CBO analyst assumes any new program would be based on Medicare’s fee-for-service program.
  • If a program was already in place, it could reduce GDP by 1-10% by 2030, according to the analyst.
  • An option that provides long-term care benefits could hurt GDP more, but also increase non-health consumption further.

The economic effects of the United States moving to a single-payer health care financing system would depend on the details, according to an economist with the Congressional Budget Office.

CBO economist Jaeger Nelson examines the possible impact of five different government-run health financing system options in a new CBO working paper. A working paper is a scientific article that has not yet been fully peer reviewed.

n The CBO is a nonpartisan office that helps members of Congress understand proposals, laws, and programs that affect the federal budget.

Nelson assumed when he wrote the paper that any new US single-payer health financing system would be based on Medicare’s current fee-for-service program.

He proposed the five different single-payer options by applying the following choices:

  • Whether plan participants’ premium payments would be high or low.
  • Whether patients who used the system to pay for care would pay a high share of bills or a low share of bills.
  • Whether the plan would pay for long-term care.

If the U.S. had implemented any of the five options in 2021 and used income taxes or payroll taxes to pay for the new system, the adopted system could have reduced U.S. gross domestic product by 1 % to 10% by 2030, estimates Nelson. .

But Nelson notes that part of the decline would be due to workers having more time to relax. He believes that lower spending on health and private health insurance would allow some workers to work less.

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