Justin Haskins: How much would 'Medicare-for-all' REALLY cost the middle class? The answer is shocking
During the most recent round of Democratic presidential debates, nearly all the leading candidates reiterated their commitment to transition the U.S. health insurance industry to a "Medicare-for-All," government-run model. Some promised to do it more quickly than others, but in the end, the result would be the same: the federal government would control health care within a decade.
Single-payer health care systems are plagued by countless problems that should make them an unattractive option for lawmakers—including rationing, service shortages, and bureaucratic inefficiencies. But perhaps the question most important to many 2020 voters, especially those with full-time jobs, will be how Democrats plan to pay for a gargantuan government takeover of health care, one that would include paying for nearly all health care services, reproductive care, and even pharmaceuticals.
Many of the leading presidential candidates—from Bernie Sanders and Cory Booker to Kamala Harris and Elizabeth Warren—have repeatedly and adamantly denied their single-payer plans will raise health care costs for the middle class. In fact, they have promised it will save middle-income earners thousands of dollars.
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However, my new analysis of the costs of single-payer health care, which is based on well-established existing studies from think tanks on both sides of the aisle, shows that tens of millions of American families would end up paying significantly more for health care under a model similar to the "Medicare-for-All" plan proposed by Sanders and endorsed or slightly modified by most of the other leading presidential candidates.
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My analysis is straightforward. Using IRS data, I calculated how much in additional taxes each IRS income bracket would need to pay to cover the costs of "Medicare-for-all" in 2022, the first year of full implementation under the legislation previously proposed by Sanders. I assumed Democrats would require tax filers to cover roughly the same proportion of the costs for "Medicare-for-All" as they paid for total federal income tax revenues prior to the passage of the Tax Cuts and Jobs Act. I also assumed businesses would pay $400 billion in new taxes in the first year of implementation, a figure that’s in line with Sanders’ own estimates.
If "Medicare-for-All"’s total cost for the first 10 years is in line with projections produced by the American Action Forum, Mercatus Center, and Urban Institute—roughly $32 trillion to $38 trillion—I estimate 40 million to 60 million households would end up paying more in new taxes than they would receive in health care benefits. Millions of these households would lose more than $10,000 annually, even if it is assumed they would otherwise need to pay a full health insurance deductible and some out-of-pocket expenses under a private health insurance model.
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Contrary to the claims made by the leading Democratic candidates, millions of middle-class earners would be hit particularly hard under "Medicare-for-All." For example, filers earning $50,000 to $75,000 would likely need to pay on average $7,773 to $9,171 more in new taxes. Those families earning $75,000 to $100,000 would pay $12,612 to $14,880 more. Most households with more than $100,000 income would pay close to or more than $20,000 in additional taxes.
In many cases, these costs far outweigh the projected average employee contribution for employer-provided health insurance—about $1,965 for individuals and $6,752 for families.
Although some proposals would offset these costs by imposing wealth taxes and additional business taxes not included in my analysis, I found that these would have a relatively small effect on the tax burden imposed on individuals and families. The wealthy and businesses simply do not have enough money to cover the massive costs of single-payer health care.
To illustrate this reality, consider the following: Even if the federal government were to confiscate every penny belonging to every single one of the richest 400 Americans—including billionaires like Bill Gates and Jeff Bezos—it would only amount to less than $3 trillion, which is less than 10 percent of the cost of single-payer health care in the first 10 years alone, even under the most optimistic scenarios.
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"Medicare-for-All" wouldn’t only create significant problems for the health care industry, it would financially decimate millions of middle-class households, many of whom already have access to health insurance plans they like.
So, why would Democrats support such a disastrous policy? The answer should be obvious to anyone who has been paying close attention to the Left’s array of recent radical policy proposals: because they are primarily concerned with increasing the power of the elites in Washington, D.C., not providing people with affordable health care.
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