Universal HealthcareBy NextBestFit
Phase 2: Wave 1: seniors, near-seniors, and children · Step 2.1

Upgrade Medicare enrollees into UHP

Year 1, Day 1 · UHADiscuss this step

Pros & cons of this step

Pros
  • +Seniors immediately save their premiums Part B alone was $185 a month in 2025, or $2,220 a year per person.
  • +Ends the Medigap market, where premiums can rise with age and underwriting can deny coverage after the open-enrollment window.
  • +Adds dental, vision, and hearing, which traditional Medicare excludes.
Cons
  • −About 33 million MA enrollees lose plans with high reported satisfaction, care coordination, and extra benefits (gym memberships, OTC allowances, transportation).
  • −Plans' disease-management and home-visit programs end; UHP and providers must replace them.
  • Ending MA saves about 20% per enrollee relative to the MA payment premium (MedPAC), but removes a product many seniors chose.
medium confidence

Efficiency: what private insurance does well, and what is lost

Private insurers do provide services: utilization management, network negotiation, care management, fraud control, customer service, and product innovation. Single payer removes them and must either replace them or accept losing them. The evidence on whether they save more than they cost is mixed to negative.

Today
Private insurers' net cost (administration + profit) is $176.5B of $1.64T in premiums (10.7%). Medicare's administration is about 1.4% of spending (Trustees), though it does far less care management and fraud prevention.
Under the plan
Insurer and plan overhead falls from $306.0B to $26.4B; UHP administration costs $96.5B. Net administrative saving $238.2B a year, before provider-side billing savings.
Who gains
  • Providers (one set of rules, no prior authorizations)
  • Patients (no denials, appeals, or network surprises)
Who loses
  • Insurer employees and shareholders
  • Patients who valued plan-level care management (some MA enrollees)

Magnitude: About $238.2B a year in insurer-side savings.

  • Private insurance: prior authorization
    Insurers argue prior authorization reduces low-value care. Physicians report it delays necessary care; Medicare Advantage plans denied about 6% of prior-authorization requests in 2023; few denials were appealed, but about 80% of those that were got overturned (KFF).
  • Medicare Advantage
    Coordinated care and extra benefits are popular, but MA costs about 20% more than traditional Medicare for similar enrollees, largely from coding intensity and favorable selection.
    Sources: Medicare Payment Advisory Commission (2025)
  • Price negotiation
    Private insurers' 'negotiation' yields hospital prices at about 254% of Medicare on average. Fragmented buyers have little leverage against consolidated health systems.
    Sources: RAND Corporation (2024)
  • Customer service
    Competition gives insurers some incentive for service quality; a monopoly public payer has none except politics. Medicare's 1-800 line and appeals are slower than the best private plans but faster than Medicaid.
  • Canada vs U.S. administration
    Researchers estimate total administrative costs (payers + providers) at about 34% of U.S. spending vs 17% in Canada. These are advocacy-aligned authors, so treat this as an upper bound.
    Sources: Himmelstein, Campbell & Woolhandler, Annals of Internal Medicine (2020)
Mitigations
  • Program integrity funded at 2.5% of benefits, above Medicare's 1.4%.
  • Integrated care organizations keep care management inside provider systems.
  • Health Technology Assessment Institute replaces prior authorization with evidence-based coverage rules.
Risk that remains: A public monopoly can become complacent; customer-service failures have no competitor to absorb dissatisfied patients.

Trade-off behind each cost item

Trade-off behind each system change