Taxpayer's Tab: Legislative Spotlight: H.R. 676, the Expanded & Improved Medicare For All Act

Vol. 4 Issue 8 March 2, 2013

Legislative Spotlight: H.R. 676, the Expanded & Improved Medicare For All Act

March 23 will mark the third anniversary of the passage of the Patient Protection and Affordable Care Act (ACA), a comprehensive overhaul of the health care sector that ushered in the largest expansion of federal entitlement programs since the Great Society experiments of the 1960s. Among its provisions, the ACA expanded Medicaid eligibility so that more low-income households could receive government-sponsored health care and created state-based "health exchanges" for Americans who do not qualify for Medicaid but make too little to afford regular insurance. The bill also includes an "individual mandate," which requires all Americans to have some level of insurance or pay a fine.

The expansion of coverage on this scale entails a cost. Based on Congressional Budget Office data last August, NTU Foundation calculated that the program would increase spending by $319.5 billion over the next five years. Total outlays could reach $926 billion over the ten-year period while its tax burden would approach $1 trillion. The Government Accountability Office recently expressed skepticism over ACA's ability to increase quality of care while reigning in health care costs over the long-term. Their fiscal scenarios projected a potential increase in deficit by $6.2 trillion over the next 75 years.

Many legislators believe that ACA does not go far enough to extend health care coverage, nor to control costs. Some have advocated for the establishment of a single-payer national health care system, similar to those already in operation in Canada or the United Kingdom. To that end, Congressman John Conyers (D-MI) has re-introduced H.R. 676, the Expanded and Improved Medicare for All Act. Under the proposal, Medicare, the federal system of health insurance for people over the age of 65 (and certain other individuals with disabilities), would be expanded to include everyone in the United States. Rep. Conyers has offered the bill in each Congress since 2003. In the 112th Congress, the bill had 77 cosponsors. This year's bill, introduced on February 13th, has 40 cosponsors to date.

Implementation of H.R. 676

Under the program, the federal government would become the single-payer for health care services in the country. Private "for-profit" companies would be precluded from offering coverage for "medically necessary" activities. The bill's list of "medically necessary" activities includes:

  • Chiropractic Services;
  • Dental Care;
  • Doctor Visits;
  • Emergency Care;
  • Hearing Services;
  • Inpatient and Outpatient Care;
  • Mental Health Services;
  • Prescription Drug Purchases;
  • Preventative and Nutritional Therapies;
  • Substance Abuse Treatment;
  • Surgeries; and,
  • Vision Care.

Private insurers would still be permitted to exist in the new system but could only provide services deemed not medically necessary. The text of the bill uses cosmetic surgery as an example of this type of procedure. If insurance companies wish to continue providing coverage to consumers, they would have to transition into a "not-for-profit" institution.

The bill permits physicians, clinics, and other health facilities to remain privately operated, but all health-related entities would not be allowed to be investor-owned. Health professionals would be given a choice of how they would receive payments for care:

  • Fee for individual service, which would be determined by a new National Board of Universal Quality and Access and payments would be uniform across the nation;
  • Salaried position within a health institution; or,
  • Salaried position within a group practice.

To replace the for-profit private providers, the bill would entitle "all individuals residing in the United States (including any territory of the United States)" to coverage under a single-payer system. Residents would be required to fill out a short form and would then be given a simple card to be used at participating medical providers. The bill offers no limits to the types or amounts of health care available to those participating in the national health care system.

The bill would eventually consolidate current federal health programs into the new system. The Children's Health Insurance Program, Medicaid, and Medicare would initially be combined, followed by the Indian Health Service over five years and the Department of Veterans' Affairs Health Programs over ten years.

The Costs of a Single-Payer System

NTUF determined the cost of a single-payer system by researching health care forecast reports provided by the Centers for Medicare & Medicaid Services (CMS). CMS estimates that total expenditures on health care will exceed $2.915 trillion in 2013. Of that amount, $802 billion is from the federal government and $538 billion is from state and local governments. The remaining amount, $1.575 trillion is paid by consumers and private entities and represents the amount that would instead be financed by the federal government if H.R. 676 is enacted into law.

Health Care Spending of the U.S. Economy, FY 2013 (projected)
Federal Spending
$802 billion
State and Local Spending
$538 billion
Private-Sector Spending
$1.575 trillion
$2.915 trillion
Source: National Health Expenditure Projections 2011-2021, Centers for Medicare & Medicaid Services (PDF)

It is assumed that these costs would be brought under the federal budget as every U.S. resident is enrolled into the new system, all things being equal. This estimate assumes immediate implementation of the bill: a phase-in cost estimate is not available, nor is a dynamic cost estimate that could take into account possible long-term behavioral or budgetary effects resulting from the bill's enactment. By way of comparison, a 2006 release from Physicians for a National Health Care Program on this version of the bill in the 108th Congress estimated that a national, single-payer system would require funding of $1.86 trillion per year, or $2.12 trillion in current dollars.

According to CMS, private health care expenditures have increased by about 2 percent ($31 billion) since 2012 whereas combined federal, state, and local government health care outlays have risen by 4.5 percent ($60 billion).

Possible Savings within the Single-Payer System

According to advocacy group Single Payer Now, enacting H.R. 676 may reduce federal outlays for some health programs. Any savings would likely be seen in three areas: administrative costs, bulk purchase of drugs, and purchases of medical supplies and equipment. For our cost estimate, NTUF analyzed a 2009 pamphlet on Single Payer Now's website and adjusted the savings projections for inflation.

Public-Sector Health Care-Related Savings in H.R. 676
(dollars in billions)
Bulk Drug Purchases
Non-Durable Medical Supplies
Durable Medical Supplies
Note: Figures are adjusted for inflation
Source: HR676: 35 Questions and Answers, Single Payer Now (PDF)

Under the provisions in Section 205 of the bill, the program's administrators would negotiate the prices of covered medical supplies and equipment, drugs, and pharmaceuticals on an annual basis. Presumably, these would result in additional savings, since the program could purchase necessary drugs & supplies in bulk. According to, those savings could be as much as $117 billion annually. The extent of those savings that might actually be experienced under the new program is uncertain.

The total projected savings -- $415.39 billion per year -- represents about 26.4% of estimated annual costs.

Financing H.R. 676

Section 211 outlines a broad plan to finance the provisions laid out in H.R. 676. In particular, it establishes the "Medicare For All Trust Fund," into which are deposited all revenues derived from various health-related tax increases. The revenue provisions include:

  • Maintain all existing taxes for federally-funded health programs;
  • A tax increase on the top five percent of income earners;
  • A "modest and progressive" tax on payroll and income made from self-employment;
  • A "modest" tax on so-called unearned income; and,
  • A "small tax on stock and bond transactions."

Additionally, the bill requires that all funds previously appropriated for Medicare, Medicaid, and the Children's Health Insurance Program be transferred and deposited into the Medicare For All Trust Fund instead.

The bill itself is not specific about the extent of the tax increases it mandates in order to fund the program. However, some sources at the Philadelphia advocacy group Healthcare-NOW project increases of 4.5 percent to the employer payroll tax and 3.3 percent to the employee payroll tax; a 5 and 10 percent increase on the top 5 and 1 percent of income earners, respectively; and in addition to "closing corporate tax loop-holes," increasing taxes on stock and bond transactions by 1/3 of 1 percent.


The Expanded and Improved Medicare for All Act would significantly increase public spending by fundamentally transforming the health care sector and bringing most health-related spending under federal control. Its $1.16 trillion net price tag represents the most expensive bill tracked in the BillTally program's 20 year history. An increase of this size would boost the FY 2014 federal budget by 30.3 percent. The language in the bill is optimistic regarding the savings it will generate and assumes that these savings will go towards offsetting much of the costs. It cites reduced administrative costs, bulk procurement of medications, and a greater emphasis on preventative medicine as possible sources of savings.

About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

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This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve. Cosponsor information obtained from


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