What This Plan Really Costs, And How We Get There

A national health plan sounds huge. The real surprise is that we are already paying for it. We are just paying badly.

In 2024 the United States spent about 5.3 trillion dollars on health care. That was about 18 percent of the entire economy and roughly 15.5 thousand dollars per person. [NHE Fact Sheet - CMS][1]

That money is split across a chaotic mix of programs and bills.

• Federal programs like Medicare and Medicaid, plus ACA subsidies, together account for about 2.1 to 2.4 trillion dollars per year. [NHE Fact Sheet - CMS][1]
• Private health insurance, mostly employer plans and ACA plans, adds roughly 1.6 trillion dollars. [NHE Fact Sheet - CMS][1]
• Out of pocket spending by families accounts for more than 550 billion dollars per year.

On top of that families are sitting on a growing pile of medical debt. Recent estimates put unpaid medical bills at roughly 195 to 220 billion dollars spread across about 100 million people. [The Heavy Burden of Medical Debt][2]

So five big facts.

• We already spend over 5 trillion dollars per year.
• Almost one dollar in five in the economy goes to health care.
• Families still go bankrupt from "covered" care.
• Around 200 billion dollars in old medical debt is hanging over households.
• We get worse outcomes than peer countries that spend less. [Health System Tracker][3]

The United States runs health care through hundreds of payers with different rules, networks and codes. That has a measurable price.

- Studies of "ineffective administrative spending" find that 7.5 to 15 percent of total health spending is pure administrative waste. For 2019 that worked out to about 285 to 570 billion dollars. [JAMA Network: Administrative Expenses][4]

• More recent work on administrative complexity and billing points to roughly half a trillion dollars per year burned on paperwork, denial games and duplicate overhead. [People's Policy Project][5]

Compare that to the administrative overhead for big public programs.

• Private insurers typically spend around 12 to 18 percent of premiums on administration. [JAMA Network: Administrative Expenses][4]

• Medicare’s core programs run at roughly 1 to 2 percent overhead, even once you adjust for accounting tricks.

The key point. We are not "saving money" with private middlemen. We are paying several hundred billion dollars a year for billing puzzles and prior authorization fights.

The SAFECARE Plan is designed to claw that waste back. It does not wish it away. It replaces parallel billing systems with one claims pipe and one set of rules.

The plan does three big things on cost.

• It collapses most existing public programs and private basic coverage into one SAFECARE Plan.
• It replaces premiums and deductibles with a payroll swap: 8.0% employer payroll contribution, and a 3.5% base personal contribution on Modified Adjusted Gross Income (collected mostly by wage withholding with annual reconciliation), plus a personal high-income surtax up to an 8.0% marginal rate above 500,000 dollars, with Social Security, VA benefits, and up to 100,000 dollars of retirement distributions excluded, the 199A deduction preserved, and the Net Investment Income Tax repealed on the main implementation date.
• It cuts administrative waste and medical debt instead of cutting care.

Here is a simple way to think about it in today’s dollars.

Current pattern:

• Total national health spending: about 5.3 trillion dollars.
• Federal and state health spending: about 2.3 to 2.4 trillion dollars.
• Employers and households through premiums, out of pocket, and state budgets: roughly 2.9 to 3.0 trillion dollars.

Illustrative SAFECARE pattern once mature:

• Total national health spending: around 4.9 to 5.1 trillion dollars.
• Federal SAFECARE budget: about 3.3 to 3.6 trillion dollars (folds in Medicare, Medicaid, ACA, etc).
• Employers and households combined: roughly 1.5 to 1.8 trillion dollars.

So the federal line goes up. The household and employer line goes down even more. The total line for the country stays roughly flat or a little lower.

Per person that looks like this:

• Today: about 15.5 thousand dollars per person.
• Under the SAFECARE scenario: about 14.7 to 15.0 thousand dollars per person once fully in place.

It is not cheaper because care magically costs less. It is cheaper because you stop paying several layers of middlemen to fight over the same bill.

Right now the system bakes workforce shortages into the price.

• Median medical student debt is often reported around 200 thousand dollars, with many new doctors carrying 250 to 300 thousand or more. [Education Data Initiative][6]
• Nurses and other clinicians carry their own heavy loan loads relative to income. That debt pushes people into high paying specialties and away from primary care and rural practice. It is not just unfair. It is expensive.

The plan changes the math.

• Tuition caps for medical and nursing programs that participate in SAFECARE funding (e.g. 15k/year for MD).
• Grant plus service programs for new students.
• Structured "Workforce Relief" for existing doctors and nurses.

Estimated cost range:

• Tuition caps and grants for new cohorts: roughly 15 to 20 billion dollars per year.
• Loan relief for the existing workforce: about 20 to 30 billion dollars per year at peak.

Call it 35 to 50 billion dollars per year. That is about one percent of current national health spending in exchange for a repaired workforce pipeline.

Medical debt is a byproduct of system design. Not a moral failure by patients. Recent work puts unpaid medical bills in the 195 to 220 billion dollar range. [AP News: Medical Debt][9]

The SAFECARE framework uses the fact that these debts trade for pennies on the dollar.

• The plan creates a time limited "Debt Redemption Facility" funded at roughly 5 billion dollars per year for about a decade.
• That public buyer purchases old medical debt portfolios in bulk, verifies them, and then cancels them.

At the end of that window roughly 200 billion dollars or more in medical debt would be erased. The recurring cost falls to zero because the new system no longer creates this kind of debt in the first place.

Even with a strict legal membership rule, there are tourists, short term visitors and illegal aliens physically present in the country. Epidemics do not check visas.

• Hospitals must treat emergencies, childbirth and serious contagious disease for anyone inside US borders.

• A dedicated "Safety Net Fund" pays for this care so it does not quietly get shifted into local premiums or hospital debt.

Based on current uncompensated care estimates, a reasonable working number is 15 to 25 billion dollars per year. [Center for American Progress][10]

The SAFECARE model is not naive about fraud. It is actually better positioned to fight it. Today fraud is fragmented. Under a single national claims pipe you can do something different.

• All claims go through one national data lake.

• Modern analytics can flag impossible patterns in real time.

• Systemic fraud above a clear threshold is treated as a federal felony with asset seizure.

Budgeting 5 to 10 billion dollars per year for this combined analytics and enforcement arm is realistic.

None of this happens overnight, but a rough ten year comparison looks like this in constant dollars.

Status quo path:

• Federal health spending rises to 3.5 - 4.5 trillion range. Total spending drifts toward 6.5 - 7 trillion.

SAFECARE path:

• Federal health spending rises to 3.3 - 3.6 trillion but absorbs private cost. Total spending levels off around 4.9 - 5.1 trillion.

Across a decade, the federal government spends more, but employers and households spend significantly less. The country as a whole saves trillions, while covering everyone.

| Metric | Status Quo 2024 | SAFECARE Scenario (Mature) |

| Total health spending (national) | 5.3 trillion dollars | 5.0 trillion dollars (approx) |

| Share of GDP | 18 percent | About 17 to 18 percent |

| Federal health spending | 2.3 to 2.4 trillion dollars | 3.3 to 3.6 trillion dollars |

| Employer plus household spending | 2.9 to 3.0 trillion dollars | 1.5 to 1.8 trillion dollars |

| Per capita spending | about 15.5 thousand dollars | about 14.8 thousand dollars |

| Administrative waste | 300 to 500 billion dollars | mostly recaptured within SAFECARE |

| Medical debt stock | 195 to 220 billion dollars | bought out and erased over ~10 years |

| Education / loan relief cost | not systemically addressed | 35 to 50 billion dollars per year |

| Safety net for non members | scattered, cost shifted locally | 15 to 25 billion dollars per year |

| Fraud analytics / enforcement | fragmented across payers | 5 to 10 billion dollars per year |

The headline is simple. The plan does not explode total health spending. It moves who pays, cuts structural waste, and treats education and debt as part of the health system.