ICYMI from Reason: “After 40 Years, No One Has Produced a Workable Single-Payer Health Care Plan”

ST. PAUL, Minn. – In case you missed it, in a recent op-ed published in Reason, Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, examines why decades of efforts to establish government-run health care systems have repeatedly failed to produce a workable model capable of delivering on promises of lower costs and expanded coverage.

The article highlights a critical point Minnesota policymakers should seriously consider. Citing Jessica Riedl, an economist with the Brookings Institution, de Rugy notes that supporters of government-run health care have not identified either “a provider payment system that actually saves money” or “a financing mechanism” capable of funding expanded coverage without shifting costs elsewhere in the system. As de Rugy writes, “Despite hundreds of legislative proposals and multiple presidential campaigns built around the issue, no one has met the challenge.”

De Rugy further points to several state-level examples that illustrate these challenges. In 2014, Vermont lawmakers abandoned its single-payer effort after determining the payroll and income taxes required to sustain the program would be “politically unsurvivable.” In 2016, Colorado voters rejected a single-payer

initiative after the legislature stated it would raise taxes by $25 billion to fund the system. And, in 2022, a California legislative analyst reported that the proposed single-payer system would cost between $494 billion and $552 billion annually.

These lessons should serve as warning signs as Minnesota policymakers consider reviving the MinnesotaCare public option in the 2027 legislative session. That proposal would open a state government-run health plan to Minnesotans well beyond the population MinnesotaCare was designed to serve.

Minnesotans should be alarmed by the cost. An analysis prepared by Milliman for the Minnesota Department of Human Services found that a MinnesotaCare-based public option would cost more than $800 million in its first year and more than $1.1 billion by its third year. Even after accounting for enrollee premiums and federal dollars, the state would need to find more than $725 million over the first three years through sources such as a premium tax or general tax.

Much of that money would not go toward covering the uninsured. According to Milliman’s analysis, most enrollees, and most of the state’s new spending, would go to Minnesotans who already have private coverage. The plan would move those Minnesotans onto a taxpayer-funded plan rather than close coverage gaps.

Further, Milliman’s analysis predates federal policy changes that have already reduced funding available to Minnesota. The Minnesota Management and Budget estimates that the One Big Beautiful Bill Act will reduce federal pass-through funding for MinnesotaCare by approximately $8 million in 2026 and $30 million in 2028. While those estimates apply to the existing MinnesotaCare program rather than the proposed public option, Milliman similarly relied on federal pass-through funding to offset hundreds of millions of dollars in projected public option costs. With less federal funding available, Minnesota could be left responsible for an even greater share of the cost than Milliman originally projected.

That is a risky commitment for a state already under financial strain. Federal policy changes are expected to cut nearly $2 billion from Minnesota’s state budget over four years. Lawmakers spent the 2026 session directing stabilization funding to struggling hospitals and pushing difficult budget decisions into 2027. Adding a new government-run health plan on top of those pressures would create new financial risks for taxpayers, patients and providers.

Instead of repeating mistakes that have already played out in other states, policymakers should carefully consider whether proposals that expand government’s role in health coverage would ultimately create new financial risks for taxpayers, patients and providers without addressing the underlying drivers of health care costs.

Read the full Reason op-ed HERE.

Read the full Milliman analysis HERE.