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Two things are true about the prospect of switching to a single-payer health care system: It could easily be less expensive than the system we have now, and it would require substantial tax increases.

Expand chart
Data: Peterson-Kaiser Health System Tracker; Chart: Chris Canipe/Axios

Driving the news: The libertarian Mercatus Center made waves yesterday with a report that said Sen. Bernie Sanders' version of "Medicare for All" would require about $32.6 trillion in new federal spending over its first 10 years.

  • Other estimates of Sanders' proposal have landed on roughly the same price tag.

Yes, but: It's still less expensive than what we're projected to spend now. If Mercatus' estimates are correct, Sanders' plan would cost about $2 trillion less, over 10 years, than the status quo.

The difference is where the money comes from. We spend a ton of money right now on health care — about $3.3 trillion in 2016, which comes out to more than $10,000 per person. That’s far more than any other industrialized nation.

  • Those expenses are spread across taxes (to fund Medicare and Medicaid), premiums (from both individuals and employers), and out-of-pocket spending.

Between the lines: Countries with established single-payer systems spend a lot less than the U.S. on health care now, but Sanders' proposal is more generous than some of those systems. That puts it on the most expensive end of the spectrum.

  • Mercatus assumes that Sanders' new federally run program would only pay doctors and hospitals Medicare rates (as his plan calls for). If a future Congress compromised with those powerful lobbies, as Congress often has in the past, the savings would diminish.

Go deeper

World leaders react to "new dawn in America" under Biden administration

President Biden reacts delivers his inaugural address on the West Front of the U.S. Capitol on Wednesday. Photo: Alex Wong/Getty Images

World leaders have pledged to work with President Biden on issues including the COVID-19 pandemic and climate change, with many praising his move to begin the formal process for the U.S. to rejoin the Paris Climate Agreement.

The big picture: Several leaders noted the swift shift from former President Trump's "America First" policy to Biden's action to re-engage with the world and rebuild alliances.

Updated 4 hours ago - Politics & Policy

In photos: The Biden and Harris inauguration

President Biden and first lady Jill Biden watch a fireworks show on the National Mall from the Truman Balcony at the White House on Wednesday night. Photo: Chip Somodevilla/Getty Images

President Biden signed his first executive orders into law from the Oval Office on Wednesday evening after walking in a brief inaugural parade to the White House with First Lady Jill Biden and members of their family. He was inaugurated with Vice President Kamala Harris at the U.S. Capitol on Wednesday morning.

Why it matters: Many of Biden's day one actions immediately reverse key Trump administration policies, including rejoining the Paris Agreement and the World Health Organization, launching a racial equity initiative and reversing the Muslim travel ban.

Republicans pledge to set aside differences and work with Biden

President Biden speaks to Sen. Mitch McConnell after being sworn in at the West Front of the U.S. Capitol on Wednesday. Photo: Erin Schaff-Pool/Getty Images

Several Republicans praised President Biden's calls for unity during his inaugural address on Wednesday and pledged to work together for the benefit of the American people.

Why it matters: The Democrats only have a slim majority in the Senate and Biden will likely need to work with the GOP to pass his legislative agenda.