Health care in the United States already represents one of every five dollars in our economy. The box below shows where all of those dollars are expected to come from next year.

U.S. health care spending in 2020









Right now, the federal government pays for a big chunk of the nation's health care bill. But families and employers do, too. A “public option” plan would probably not change total spending much, and it would preserve the current system’s basic structure. Medicare for all could increase total spending. But the much bigger change would be where the money comes from. It shifts nearly all the money in the system into the federal budget.

The charts above compare two leading sets of health care proposals advocated by Democrats running for president. The first, a “public option” plan, is similar to proposals from Joe Biden, Pete Buttigieg and other candidates. It would allow most Americans to buy insurance from the government and make other changes that would enable fewer people to go without coverage, but it would preserve much of the existing health insurance system.

The second, a “Medicare for all” plan introduced by Bernie Sanders and endorsed by Elizabeth Warren, would replace most Americans’ current health insurance with a generous government-run plan that covers more benefits. (Kamala Harris wants to replace the existing system with a mix of new public and private options, but there are not yet rigorous cost estimates for such a plan.)

When critics say that a single-payer system will be expensive, they are usually talking about the increase in federal spending — the size of the red box above. When Medicare for all enthusiasts say it would not increase spending much, they are talking about the size of the entire chart.

That’s why it could be true both that Medicare for all would require substantial tax increases and that it would leave many or most American families better off financially.

A number of economists have closely examined the possible costs of Medicare for all. Some estimate that such a system would increase the nation’s total health bill, and some find it would decrease it — but all of them see a huge increase in the amount the federal government would spend. The increase in federal spending represents more than triple all spending on the military, or about 80 percent of all government spending on things other than health care.

The numbers in our charts come from the Urban Institute, a Washington research group with a lot of experience estimating the costs of health policy proposals. Its estimated cost is on the high side of various published scores. We showed how several cost estimates varied here.

Ms. Warren is right in saying that such a plan could also lower the costs borne by many middle-class Americans, who currently pay for health care in numerous ways: federal taxes, state taxes, premiums, and cash when they go to a doctor or fill a prescription at the pharmacy. Under Medicare for all, those other ways of paying would effectively disappear.

Democratic candidates favoring a more moderate approach, which would allow more Americans to buy public health insurance coverage while preserving much of the private system, often criticize Medicare for all for being expensive. But their approach would also be expensive. The United States pays a larger share of its G.D.P. on health care than any of its peer nations, and that would still be true under a public option plan. Federal spending would not go up by as much, but Americans would continue to pay for health care in the other ways, including premiums and deductibles. Many people would continue to pay directly for some things, like dental work, eyeglasses and nursing home care.

The difference is that the public option plans require less reorganization of how all that money gets spent.

Under Medicare for all, companies and individuals would be free of health insurance premiums. People wouldn’t have to spend much money on hospitalizations, doctors’ visits or medications. And states would spend far less on Medicaid and state employee benefits — a reduction that could lower state taxes.

But for the federal government to spend so much on health care, it would have to make big changes, too.

A recent paper from the Center for a Responsible Federal Budget, a fiscally conservative research group, finds that a federal expansion in line with the Urban estimates would mean either large tax increases or cuts in other government spending — or both. The paper said Medicare for all could be financed with a new 32 percent payroll tax, on top of existing rates, among other possibilities. Bernie Sanders, who has gone further than Ms. Warren in suggesting financing for a Medicare for all plan, has suggested a mix of funding sources, including a payroll tax and an income tax increase for high earners. But an analysis from the Urban Institute in 2016 found that his proposals would not raise enough to pay for the full cost of his plan. In a recent interview with CNBC, Mr. Sanders said that he had no plan to release a more detailed financing proposal.

Ms. Warren, who has built her political brand around having a plan for everything, has announced that she will release her financing proposal soon.