The U.S. has the most costly healthcare system in the world. Private insurers employ vast numbers of people for marketing, billing, claims denial, and provider negotiations. Providers (hospitals, doctors) also have massive billing departments to deal with hundreds of different insurers, each with its own rules, codes, and forms. A single-payer system simplifies this enormously. There is one payer, one set of rules, one claims form. Estimates are that M4A could reduce administrative costs by $150-$500 billion annually. This savings alone could fund coverage for all the uninsured.
Galvani, A. P., Parpia, A. S., Foster, E. M., Singer, B. H., & Fitzpatrick, M. C. (2020). Improving the prognosis of health care in the USA. The Lancet, 395(10223), 524-533. DOI: https://doi.org/10.1016/S0140-6736(19)33019-3
Pollin, R., Heintz, J., Arno, P., Wicks-Lim, J., & Ash, M. (2018). Economic Analysis of Medicare for All. Political Economy Research Institute (PERI), University of Massachusetts Amherst. https://peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all
Woolhandler, S., & Himmelstein, D. U. (2017). Single-Payer Reform: The Only Way to Fulfill the President's Pledge of More Coverage, Better Benefits, and Lower Costs. Annals of Internal Medicine, 166(8), 587-588. DOI: https://doi.org/10.7326/M17-0302
As the sole payer for nearly 330 million people, the federal government would have monopsony power (sole purchasers) and could negotiate lower prices for prescription drugs, hospital services, and medical equipment, similar to how the VA and current Medicare get lower prices than private insurers. This is the single biggest source of cost containment.
A huge amount of resources in the private insurance market is spent on "risk selection” (figuring out how to avoid sick people and attract healthy ones). This is economic waste that does not contribute to actual healthcare. By covering everyone in a single, national risk pool, this entire layer of inefficiency disappears. The system's goal shifts from profit and risk avoidance to health outcomes.
Coverage is tied to employment for most, creating "job lock" (people staying in a job for the insurance) and administrative churn as people switch plans when they change job. With a single payer system, coverage is lifelong, universal, and portable, regardless of employment status. This reduces administrative friction and improves continuity of care.