Replacing private health insurers with a single-payer system will save less on administrative costs than you think:
Moreover, a single-payer system also would have administrative expenses. Not as many, to be sure. The government doesn’t have to advertise or lobby itself. And it doesn’t pay its executives nearly as well as the private sector. Nevertheless, the government’s administrative expenses now equal 2.2 percent of our health care bill. If we expanded Medicare to cover everyone, those administrative expenses would grow. So the savings I achieved by wiping out private insurers could easily fall to just 3.5 percent of our total health care bill.
