Medicare for All Act: Coverage, Funding, and Bill Status

The Medicare for All Act is a proposed federal law that would replace private health insurance, Medicare, Medicaid, and the Children’s Health Insurance Program with a single, government-run health plan covering every person living in the United States. The current version was introduced on April 29, 2025, by Senator Bernie Sanders in the Senate as S. 1506 and by Representatives Pramila Jayapal and Debbie Dingell in the House as H.R. 3069.¹² Under the bill, patients would pay no premiums, deductibles, or copays for covered care.³

What the Plan Would Cover

Every U.S. resident would be enrolled in one federal health plan. Newborns would be signed up automatically at birth.⁴ Coverage would extend beyond what most current insurance plans include: hospital and outpatient care, prescription drugs, mental health services, long-term care, dental, vision, hearing aids, and reproductive health services.⁵

Patients could see any participating doctor or use any participating hospital, with no network restrictions. All out-of-pocket costs for covered services would be eliminated.³

Private health insurers would be barred from selling plans that duplicate the government coverage. They could still offer supplemental policies for benefits the program doesn’t include, but commercial insurance as most Americans know it would be phased out.⁶

How It Differs From Today’s Medicare and From a Public Option

The name is somewhat misleading. Today’s Medicare covers people 65 and older and certain people with disabilities, and it comes with premiums, deductibles, and coverage gaps that beneficiaries often fill using private supplemental policies or Medicare Advantage plans. The proposed program would be more generous than existing Medicare in almost every way: broader benefits (long-term care, dental, vision, hearing) and essentially no cost-sharing.⁷

It also differs sharply from a “public option,” a separate reform idea in which the government would offer a plan that competes with private insurers on the marketplace. Under a public option, people could pick the government plan or keep their employer or individual coverage. The Medicare for All Act does not create a choice: for covered services, the federal plan replaces private insurance entirely.⁷

When It Would Take Effect

Neither version of the bill flips the country to single-payer overnight. Both use a phased rollout, and the House and Senate timelines differ.

The House bill lays out a two-year transition. One year after enactment, children under 19 and adults 55 and older would become eligible for the new program. A year after that, everyone else would join. During the transition, a “transitional buy-in” would let people purchase coverage through the new system before full implementation.⁶

The Senate bill uses a four-year transition. Children under 19 would be covered starting the first calendar year after enactment, and full benefits for all residents would begin on January 1 of the fourth year. In the meantime, the Senate version would lower the current Medicare eligibility age, add dental, vision, and hearing benefits to existing Medicare, eliminate the 24-month waiting period for people with disabilities, and reduce out-of-pocket costs for people already on Medicare.⁸

Once either transition is complete, private insurers would be prohibited from selling coverage that duplicates the program.⁶

How It Would Be Paid For

The bill itself does not lock in a single financing mechanism. Senator Sanders has instead released a menu of revenue options intended, taken together, to replace the premiums, deductibles, and other health care costs currently paid by employers, households, and governments. The main proposals include:

A 7.5% payroll tax on employers, exempting the first $2 million in payroll, projected to raise $3.9 trillion over ten years.
A 4% income-based household tax, with families of four earning under $29,000 exempt, projected at $3.5 trillion over ten years.
New progressive income tax rates ranging from 40% on income between $250,000 and $500,000 up to 52% on income above $10 million, with capital gains taxed as ordinary income, projected at $1.8 trillion.
A 1% annual wealth tax on the roughly 0.1% of households with net worth above $21 million, projected at $1.3 trillion.
Estate tax reform returning to 2009-era exemptions with progressive rates up to 55% and a surtax on the largest estates, projected at $249 billion.
Ending the tax exclusion for employer-paid health insurance premiums and related deductions, projected at $4.2 trillion.

Additional revenue would come from a one-time tax on offshore corporate profits ($767 billion), fees on large financial institutions ($117 billion), and closing various tax loopholes ($359 billion combined).⁹

Independent cost estimates vary widely. A December 2020 Congressional Budget Office analysis of several single-payer scenarios estimated new federal costs of $1.77 trillion to $3.0 trillion in 2030 alone, depending on how generous benefits and provider payments were.¹⁰ A 2018 study from the Political Economy Research Institute at UMass Amherst projected that the system would cut total national health spending by nearly 10%, from $3.24 trillion to $2.93 trillion annually.¹¹ A study in The Lancet projected a 13.1% reduction in national health spending, or more than $458 billion in annual savings, driven by lower administrative costs, reduced provider fees, and negotiated drug prices.¹²

The Committee for a Responsible Federal Budget, by contrast, estimated total new federal costs at roughly $30 trillion over ten years. The committee said any realistic financing plan would have to combine several revenue sources, and calculated that if a single mechanism had to cover the whole cost it would take something on the order of a 32% payroll tax or a 42% value-added tax. Taxes on high earners and corporations alone, the committee estimated, could cover only about 35% of the total.¹³

What It Would Mean for Doctors and Hospitals

The bill changes how providers are paid. Hospitals and other institutional providers would receive annual lump-sum “global budgets” negotiated with the government to cover operating expenses. These budgets would be based on past spending, projected service levels, wages, and proposed new programs. Money for expansion or major equipment would be funded separately as capital expenditures.⁶¹⁴

Individual physicians and other non-institutional providers would be paid through a national fee-for-service schedule. The bill also bars institutional providers from using proprietary coding systems to manipulate payments and prohibits hospital executives from holding financial interests in companies that sell products or services to their institutions.⁶

What those rates would mean for provider revenue is contested. A 2018 analysis by Charles Blahous at the Mercatus Center estimated that shifting all patients to Medicare-level payment rates would cut hospital reimbursements for currently privately insured patients by more than 40% and physician payments by roughly 30%, totaling about $5.3 trillion in reduced provider revenue over ten years. Blahous argued that because Medicare rates already sit below many hospitals’ reported costs of care, such cuts could threaten providers’ financial viability.¹⁵

Supporters counter that consolidating hundreds of insurers into one payer would cut administrative waste sharply. A 2020 analysis in The Lancet found private insurance overhead of about 12.4% of spending compared with 2.2% for Medicare, and estimated roughly $225 billion per year in overhead savings from consolidation, plus another $284 billion from simpler provider billing.¹² Physicians for a National Health Program has put administrative savings above $500 billion a year.¹⁶

Where the Bill Stands

As of mid-2025, neither version has advanced beyond committee referral. The Senate bill was sent to the Committee on Finance on April 29, 2025, with no hearings scheduled.¹⁷ The House bill was referred to seven committees: Energy and Commerce, Ways and Means, Education and Workforce, Rules, Oversight and Government Reform, Armed Services, and the Judiciary.¹⁸

At introduction, the House bill had Jayapal and Dingell as lead sponsors and more than 100 Democratic cosponsors; the cosponsor count later grew to at least 114, all Democrats.² In the Senate, Sanders was joined by 17 Democratic cosponsors.¹⁷ No Republican senator or representative has cosponsored the legislation. With Republicans holding the majority in both chambers, the bill is not expected to pass in the current Congress, and no earlier version of Medicare for All has received a floor vote in either chamber. Its sponsors describe it as a long-term goal being built out over successive Congresses.

1
GovInfo. Medicare for All Act, S. 1506
2
GovTrack. H.R. 3069: Medicare for All Act
3
Office of Sen. Bernie Sanders. Sanders, Jayapal, Dingell Introduce Medicare for All
4
Kaiser Family Foundation. Side-by-Side Comparison: Medicare for All and Public Plan Proposals
5
Office of Rep. Pramila Jayapal. Jayapal, Sanders, Dingell Introduce Medicare for All
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U.S. Congress. H.R. 3069 – Medicare for All Act, Full Text
7
Milbank Memorial Fund. Navigating the Shifting Terrain of U.S. Health Care Reform
8
Office of Sen. Bernie Sanders. Medicare for All Act, Senate Bill Summary
9
Office of Sen. Bernie Sanders. Options to Finance Medicare for All
10
Mercatus Center. Understanding CBO’s Medicare for All Cost Estimates
11
PERI, UMass Amherst. Economic Analysis of Medicare for All
12
National Library of Medicine. Improving the Prognosis of Healthcare in the United States
13
Committee for a Responsible Federal Budget. Choices for Financing Medicare for All
14
Physicians for a National Health Program. Hospitals: All-Payer or Global Budgets
15
Manhattan Institute. How Much Would Medicare for All Cut Doctor and Hospital Reimbursements
16
Physicians for a National Health Program. What Is Single Payer
17
U.S. Congress. S. 1506 Cosponsors
18
C-SPAN. H.R. 3069 – Medicare for All Act