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New study finds Medicare for all generates overall savings of more than $5 trillion

Written by Diane Archer

Health economists from the University of Massachusetts at Amherst just released a report, which finds that Medicare for All generates national health care savings of more than $5 trillion over ten years. Those savings come with insuring every American, providing excellent benefits, including vision, hearing, dental and prescription drugs, and no premium, deductibles or coinsurance.

The economists project a 19.2 percent savings in national health spending, even assuming a 12 percent increase in use of health care services. In short, improved Medicare for All would bring down annual health care spending to $2.93 trillion from its current level of $3.24 trillion. They found significant savings from lower administrative costs, lower provider rates and lower prescription drug costs. In total, they found that overall spending could fall by about 10 percent.

They estimated that overall spending would decrease by 9 percent from administrative savings; 5.9 percent from lowering prescription drug costs by 40 percent; 2.8 percent savings by putting in place uniform doctor and hospital rates and finally, 1.5 percent savings from a reduction in fraud and waste in the current system.

The biggest winners are middle class households, Your typical middle income family should see its net health care spending fall between 2.6 and 14 percent of their income.

How does the federal government pay for improved Medicare for all? The economists explain that the public sector already pays 60 percent of all health care costs. They suggest one way to pay for the remaining costs is to impose a sales tax of 3.75 percent on non-necessities. They also propose imposing a wealth tax of 0.38 percent on the top 12 percent of households. And they propose treating long term capital gains as short term gains for tax purposes.

They propose that businesses pay an 8 percent payroll contribution; still, they estimate that businesses would see an average of 8 percent savings on employee premiums. People with Medicaid would get a tax credit.

The economists recognize that the transition to Medicare for all needs to address the 1.8 million jobs lost from the transition away from commercial health insurance. And, they propose guaranteeing people’s pensions and providing them two years full pay if they are retiring. For those remaining in the workforce, they propose 100 percent wage insurance for one year and job retraining. The total projected cost is $120 billion over the course of the transition, which is covered by the savings and new sources of proposed revenue.

If you support Medicare for all, please sign this petition to Congress.

Here’s more from Just Care:



  • “impose a sales tax of 3.75 percent on non-necessities”. – This would pose a double taxation on seniors who have already paid for their Medicare through a lifetime of payroll taxes. It would be like a bank charging you a mortgage AFTER you paid off your mortgage. This is a non-starter.

  • “Medicare for all” may sound good, but keep in mind that the cost of monthly premiums will be raised dramatically. The main reason for the horrendously high charges for prescription drugs and corporate medical care (as well as private insurance), is due to the unspeakable greed of corporate CEOs, etc. No human can perform enough true work, nor add personal value, to warrant such annual income. Since their greed will never stop, there is no hope for “affordable” and competent health care in the USA.

    • You must have missed the part about NO PREMIUMS. “Those savings come with insuring every American, providing excellent benefits, including vision, hearing, dental and prescription drugs, and no premium, deductibles or coinsurance.”

  • This article proposes bold strokes to modify an industry unique to the USA set up to “pay off” politicians to propose Laws to continue to Rip away wealth and health from Millions in the USA !
    Health “systems” set up to “skim” $Billions with unnecessary paperwork and made up regulations is replaceable with today’s computerization.
    Read and try to understand the article before making comments.
    This proposes an average savings $5 billion per month per state. The article includes re-training people in the industry, which is much more generous than what will happen if the industry is left to its own devices. This industry will computerize, and will use robots while laying off thousands of people and keep in the profits for themselves- that will even give them more ammunition and money to pay off politicians in the USA will never have adequate health care as it slipping below many other countries worldwide.
    Maybe we used to be the “greatest health care in the world,”but not anymore! That was just a marketing slogan put out by the insurance industry years ago!

    We can do this, however, we have to get it started rather than scream at each other about how I cannot!

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