1. In the United States, insurance companies are legally mandated to pay out at least 85% of premiums as medical expenses. It's called the Medical Loss Ratio if you care to Google it. That stipulation is part of the ACA / "Obamacare". If they spend less than 85%, they are legally required to issue refunds. The 15% that insurance companies get to keep has to cover both administrative costs and their profit.
2. Single-payer systems still have administrative costs. The administrative cost of running England's NHS is not zero. But, even if you created a perfect AI robot that had zero cost to operate (in magic fairytale land) to run your single-payer system, you still couldn't reduce premiums by more than 15%.
3. Realistically, switching to single-payer and doing nothing else would reduce costs by a single-digit percent.
> But, even if you created a perfect AI robot that had zero cost to operate (in magic fairytale land) to run your single-payer system, you still couldn't reduce premiums by more than 15%.
This is only true if you assume that health insurance companies have no influence on the cost of care. That is, however, patently false.
> In the United States, insurance companies are legally mandated to pay out at least 85% of premiums as medical expenses.
Which means, of course, that their main option to increase profit is to increase overall spending on healthcare. Reducing cost is directly against their interests.
"According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of operating expenditures. Defenders of the insurance industry estimate administrative costs as 17 percent of revenue. Insurance industry-funded studies exclude private plans’ marketing costs and profits from their calculation of administrative costs. Even so, Medicare’s overhead is dramatically lower."
> Realistically, switching to single-payer and doing nothing else would reduce costs by a single-digit percent.
I mean, that's a start.
If you chart the US against the rest of the OECD, we're doing something bafflingly expensive versus everyone else. It is certain to be multi-factorial, but our insurance setup absolutely plays a role. https://commons.wikimedia.org/wiki/File:OECD_health_expendit...
2. Single-payer systems still have administrative costs. The administrative cost of running England's NHS is not zero. But, even if you created a perfect AI robot that had zero cost to operate (in magic fairytale land) to run your single-payer system, you still couldn't reduce premiums by more than 15%.
3. Realistically, switching to single-payer and doing nothing else would reduce costs by a single-digit percent.