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Single-Payer System

Written By
Paul Tracy
Updated January 16, 2021

What is a Single-Payer System?

A single-payer system is a health care system in which the government pays for all health care costs.

How Does a Single-Payer System Work?

Though there is considerable debate about how a single-payer system fundamentally works, by many accounts a single-payer system operates much like the Veterans Administration works today in the United States: Hospitals receive a general budget from the government, doctors receive a salary from the hospitals, and the government pays for the cost of care.

However, single-payer systems can also work like Medicare, which allows patients and doctors to operate in the private markets while receiving negotiated payments from the federal and state governments.

Why Does a Single-Payer System Matter?

The theory behind the single-payer option is that it would lower the cost of health care and provide health care to all. The idea was introduced during the legislative process surrounding the Patient Protection and Affordable Care Act but was eventually dropped in favor of a public option.

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