The Pros and Cons of Single-Payer Health Plans

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October 19, 2022

Single-payer health plans offer some benefits, but they come with a price. For starters, they are much more expensive than other health insurance options, and patients have less control over their healthcare. Another pro of single-payer health plans is that doctors and hospitals have the ability to negotiate contracts with the government. Many countries, including Canada, Taiwan, and South Korea, have single-payer health plans.

Increased costs of health plans

The cost of health care continues to rise rapidly, and many experts argue that a single-payer system would lower costs. National health spending reached $3.8 trillion in 2019, up 4.7% from the previous year. This is enough money to provide medically necessary care to every resident in the U.S. However, a single-payer system does not eliminate out-of-pocket costs, and the cost to enroll in a plan would be higher initially.

The CBO reports that federal subsidies for health care under single-payer health plans will increase between $1.5 trillion and $3 trillion in 2030. That figure is still a very conservative estimate. It assumes that the sponsors achieve their goals of dramatically cutting payments to health providers, drug prices, and administrative costs. In fact, even doubling projected federal income tax collections would not be enough to finance the added costs, and the federal government would be responsible for almost all of the nation’s health spending.

Reduced reimbursement

Reducing provider payments is a controversial topic in health care. It is a complicated issue because it will not happen quickly, and the savings would come mainly from better productivity and paying workers and suppliers less. Nonetheless, there is a good chance that the costs of single-payer health plans could be lower than what is currently being paid, even if providers and the government have to make some sacrifices.

One of the advantages of a single-payer health plan (S.P.) system is that the government can buy drugs and medical devices in bulk. The Department of Veterans Affairs, for example, pays half of the retail price for drugs and negotiates with doctors and hospitals to ensure adequate reimbursements and fair profits for everyone. The S.P. system can also improve pharmaceutical prices because it can allow federal regulators to negotiate lower prices.

Doctor shortage

The current fee-for-service healthcare model in the United States has led to a physician shortage. This system pays physicians for each patient visit, creating incentives for unnecessary procedures, long clinic appointments, and mountains of paperwork. While this model may have helped reduce healthcare costs, it’s also responsible for the shortage of primary care doctors.

If single-payer health plans are adopted in all states, however, the shortage will become even more acute. The National Health Service reports that approximately 60 percent of its workforce works unpaid overtime every week. This is far higher than the average physician’s salary in the U.S., which is about $313,000 a year. This situation will only exacerbate America’s physician shortage, as the country is forecast to be short 120,000 doctors by 2032.


Single-payer health plans are a complex proposition. They would require a new set of taxes, including payroll taxes, income taxes, and sales taxes. But this is not an insurmountable barrier to single-payer healthcare. Top consulting firms advise corporate clients to add value to the solution and position for systemic change.

One example of a single-payer health plan is Tenn Care, the state-run Medicaid program in Tennessee. When first proposed, Tenn Care was widely hailed as a way to cover most of the state’s residents and keep costs under control. Unfortunately, the program’s implementation fell victim to mismanagement and unrealistic fiscal planning.

Political prospects

Single-payer health plans are gaining popularity among Democrats. In a recent survey, more than half of Democrats said that they support such plans. This includes very liberal and conservative Democrats. It also includes a growing percentage of Democrats who identify as “liberal.” However, despite widespread support, there are still concerns about the political prospects of single-payer.

Although single-payer health care plans have many advantages, they also pose serious political problems. Among the major stumbling blocks to the adoption of such a system are powerful interests. The medical care industry, insurers, and organized medicine all stand to lose by introducing such a system. Besides, the up-front costs of such plans are politically unpopular.