Number of the Day: $11 Trillion
Elizabeth Warren says that Americans will spend “about $11 trillion on insurance premiums, copays, deductibles and uncovered medical expenses” over the next 10 years if the current health care system remains in place. Kaiser Health News’ Shefali Luthra took a look at that eye-opening claim and found that it appears to be a reliable estimate.
In fact, the number could be a bit on the low side. Linda Blumberg, an economist at the Urban Institute, crunched the numbers and came up with an estimate of $11.7 trillion.
Warren has used the spending estimate to support her argument that a single-payer health care system would reduce medical costs for most Americans. Her Medicare-for-All proposal would eliminate those out-of-pocket expenses, though it would also require shifting most health care spending onto the federal budget. “Talking about the amount of money we expect households to be spending over time is a very important part of trying to educate people on what single-payer would do, and what the tradeoffs are for them,” said Blumberg.
Those tradeoffs include the big jump in government spending and the new taxes on businesses and the wealthy that would be required to cover it. Warren says federal spending would increase by roughly $20 trillion over 10 years, far less than Urban’s estimate of $34 trillion, with the difference driven by what Warren says will be huge reductions in overhead costs and lower reimbursement rates across the system.
Still, Warren’s cost projection makes one point clear: Under the current system, Americans pay a lot for their health care. “The $11 trillion figure is staggering — and it checks out,” Luthra wrote. “Whether and how to address that issue is fiercely controversial, but on this particular stat, Warren’s statement is accurate.”