Two approaches to achieving universal health insurance coverage and greater control over health care costs are the focuses of CBO's latest study, Universal Health Insurance Coverage Using Medicare's Payment Rates.
Both approaches would apply Medicare's payment rates to all covered physician and hospital services, while extending health insurance to those who are now uninsured.
One approach would make these changes under an "all-payer" system that would retain the current multiplicity of private and public insurers. The other approach would introduce a "single payer" that would insure everyone for specific services.
Under a single-payer plan, the potential for reducing health care costs would be greater than under an all-payer scheme, but a single-payer plan would also require more fundamental changes from the present system.
CBO's illustrative estimates indicate that:
If an all-payer system had been in place in 1989, the change in national spending on health care would have ranged between a decrease of $17.3 billion, or 2.9 percent of national health expenditures (NHE), and an increase of $30 billion, or 5 percent of NHE, depending on the assumptions used. These estimates assume that uninsured people would be covered by an extension of Medicare, but that restrictions would prevent others who now have insurance from switching to Medicare as well.
If a single-payer system had been in place in 1989, the net effect on spending would have been more favorable. In this case, the change in spending would have ranged from a decrease of $58.1 billion, or 9.6 percent of NHE, to an increase of $7.4 billion, or 1.2 percent of NHE. Individuals would have less freedom to choose their insurance packages, however, and high-income people would probably pay more for coverage that might be less comprehensive than their current plans.