The Incomplete Calculation
The most common argument against single-payer healthcare in the United States is that it would raise taxes. That argument is not wrong. Under any credible financing proposal for universal coverage, most Americans would pay higher taxes than they currently do.
What the argument omits is everything else Americans currently pay for healthcare — and whether the net effect of higher taxes minus eliminated premiums, deductibles, copayments, surprise bills, and medical debt is positive or negative for most households.
This part presents the full calculation.
What Americans Currently Pay
The KFF 2025 Employer Health Benefits Survey provides the most comprehensive annual accounting of employer-sponsored insurance costs in the United States.
In 2025, the average annual premium for employer-sponsored family coverage was $26,993. Workers contributed an average of $6,850 of that directly from their paychecks. Employers paid the remainder — a cost that the Federal Reserve Bank of New York documented in March 2026 as having direct consequences for wage growth.
Out-of-pocket costs — deductibles, copayments, and coinsurance paid at the point of care — averaged $1,632 per capita in 2024, not including premium contributions. Total out-of-pocket health spending grew 5.9% to $556.6 billion across the US population in 2024. For a family of four, total healthcare costs including premiums and out-of-pocket expenses averaged $32,066 in 2024.
Family premiums have risen 26% over the past five years, outpacing both inflation (23.5%) and wage growth (28.6%) over the same period.
Employer costs are also rising sharply. Average employer health insurance costs are projected to surpass $17,000 per employee in 2026 — a 9.5% increase from 2025.
The Net Cost Comparison
Under the Sanders Medicare for All Act financing proposal, a family of four earning $50,000 per year would pay a 4% income-based premium of $844 per year. That family currently contributes an average of $6,850 in premiums alone — before deductibles, copays, or any other out-of-pocket costs.
Citizens for Tax Justice, a nonpartisan tax policy research organization, found that middle-class families would see their after-tax income increase by approximately $3,240 per year under Medicare for All when the full cost picture — taxes paid minus premiums and out-of-pocket costs eliminated — is calculated.
The RAND Corporation analysis published in the Journal of the American Medical Association found that the lowest-income households would see their total healthcare payments — taxes plus premiums plus out-of-pocket costs — decrease from 27% to 15% of compensation. The highest-income households would see theirs increase from 27% to 31%.
The current system is regressive: a flat premium represents a far larger share of a $40,000 income than a $400,000 income. The proposed financing structure is progressive: contribution scales with income.
Administrative Waste
One of the least visible but most significant cost drivers in the current system is administrative overhead — the cost of running a fragmented multi-payer system in which every insurer has different rules, different billing codes, different prior authorization requirements, and different reimbursement rates.
The Congressional Budget Office estimates that a single-payer system would reduce administrative costs within the healthcare sector by approximately 1.8% of GDP by 2030 — roughly $500 billion annually in 2026 dollars. Those savings would come from eliminating the parallel administrative infrastructures that hospitals, physician practices, and other providers currently maintain to navigate hundreds of different payers simultaneously.
Taiwan’s National Health Insurance program, operating with one payer and one billing system, runs with administrative overhead of 1.07% of total program expenditures. The US system spends between a quarter and a third of all healthcare dollars on administration — billing, claims processing, prior authorization, appeals, and the management of payer complexity. The difference between 1.07% and 25–30% represents an enormous quantity of resources currently consumed by paperwork rather than patient care.
Wages and Small Business
The Federal Reserve Bank of New York’s Liberty Street Economics blog, published in March 2026, documented a direct relationship between rising employer healthcare costs and suppressed wage growth. Among businesses that experienced health insurance cost increases, average wage growth was 3.8% — but those same employers reported that if healthcare costs had held steady, wage increases would have averaged 4.7%. Rising healthcare costs suppressed wages by approximately one percentage point annually.
The mechanism is straightforward: every dollar an employer spends on healthcare premiums is a dollar not available for wages, hiring, or investment. The average employer cost of family health insurance — projected to surpass $17,000 per employee in 2026 — represents a significant and growing constraint on compensation.
For small businesses, the burden is disproportionate. Workers at small firms currently face average deductibles of $2,631, compared to $1,670 at large companies. Small businesses cannot negotiate the same rates as large employers, cannot spread risk across the same size workforce, and frequently cannot offer competitive benefits at all — creating a structural disadvantage in talent recruitment relative to large corporations.
Under single-payer, healthcare is no longer an employer-provided benefit. Every employer — a ten-person startup and a Fortune 500 company — competes for workers on identical healthcare terms. The small business disadvantage in benefits disappears entirely.
Medical Bankruptcy
Medical bills or medically related financial events contribute to approximately two-thirds of all personal bankruptcies in the United States, according to research published in the American Journal of Public Health. The Consumer Financial Protection Bureau found in 2024 that 100 million Americans currently carry medical debt, with a combined balance of $220 billion. Thirty-six percent of US households reported carrying medical debt in 2024.
Medical bankruptcy — the loss of financial stability as a direct consequence of healthcare costs — does not exist as a meaningful statistical phenomenon in Germany, France, Australia, Taiwan, Japan, or any other country with universal coverage. It is a uniquely American outcome produced by a system in which even insured patients can face costs that exceed their financial capacity.
The data on who carries medical debt reflects broader patterns of inequality. The burden falls disproportionately on Black and Hispanic Americans, on households in the South, and on people in rural areas with limited provider access — populations that are already more likely to be uninsured or underinsured.
Drug Pricing
A 2022 RAND Corporation analysis of pharmaceutical pricing across 33 OECD countries found that US prices for insulin averaged $98.70 per unit at the manufacturer level, compared to an average of $8.81 across all other OECD countries. US insulin prices were more than ten times higher than prices in France and the UK, nearly nine times higher than prices in Italy, more than eight times higher than Japan, approximately seven times higher than Germany, and more than six times higher than Canada.
The same pattern holds across all pharmaceutical categories. US prices for drugs overall were nearly 2.78 times higher than in comparable countries. US brand-name drug prices were at least 3.22 times higher.
The mechanism behind this gap is the presence or absence of government negotiating power. Every other wealthy country uses its position as a large-scale purchaser to negotiate drug prices with pharmaceutical manufacturers. The United States government was, until recently, legally prohibited from negotiating drug prices in Medicare — a prohibition that has begun to be partially unwound through legislation. The price difference between the US and other countries is the documented, quantifiable cost of that prohibition to American patients.
Under single-payer, the government would negotiate drug prices as the sole buyer for the entire US market — a position of negotiating leverage equivalent to what every other wealthy country already exercises.
Surprise Billing
A KFF and Peterson Center on Healthcare analysis found that four in ten insured nonelderly adults received an unexpected medical bill in the past 12 months, including one in ten who received a bill from an out-of-network provider they did not knowingly choose. Eighty-seven percent of consumers have been surprised by a medical bill at some point. Only 20% of consumers report always knowing what they will owe before receiving care.
Two-thirds of Americans report being very or somewhat worried about their ability to afford an unexpected medical bill — the second-highest financial worry of the American public, behind only retirement savings.
Surprise billing occurs when a patient receives care at an in-network facility but is treated by a provider — an anesthesiologist, a radiologist, an assistant surgeon — who is not in their insurer’s network and who bills separately at rates the insurer may not cover. The patient had no meaningful choice about which providers were present in their care.
Under single-payer, there are no networks. Every licensed provider who participates in the system is covered. The in-network versus out-of-network distinction does not exist. Surprise bills as a category cease to exist.
Sources
KFF 2025 Employer Health Benefits Survey — annual survey of employer-sponsored insurance costs and coverage.
Federal Reserve Bank of New York Liberty Street Economics — “How Has Healthcare Affected Wage Growth?” March 2026.
RAND Corporation — international insulin and pharmaceutical price comparison study, 2022.
Consumer Financial Protection Bureau — medical debt data, 2024.
Congressional Budget Office — administrative cost savings estimate for single-payer system, 2025.
Citizens for Tax Justice — Medicare for All net cost analysis for middle-class households.
RAND Corporation / Journal of the American Medical Association — Medicare for All financing and distributional analysis.
KFF / Peterson Center on Healthcare — surprise billing consumer survey data.
American Journal of Public Health — medical bankruptcy research.
The Complete Single Payer Healthcare Series
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