11.5.19 / Updates

Economists Agree: Medicare For All Would Hit Hard-Working Families

WASHINGTON – As presidential candidates continue to promote proposals for unaffordable, one-size-fits-all government health insurance systems they claim won’t cost middle class families more, economists agree that there’s simply “no way to pay for Medicare for all without tax increases … on the middle class.”

  • Jim Kessler, Executive Vice President for Policy, Third Way: “The gap between what she says it will cost and what it will really cost is in the trillions of dollars, and the middle class will be on the hook to fill that gap … My guess is that with accurate numbers, she’s somewhere between $5 trillion and $10 trillion short.  [Her plan taps] the rich and corporations as much as possible.  Who’s left?  The middle class.”
  • Katherine Baicker, Economist, University of Chicago: “Most of the proposals to move to Medicare-for-all would involve substantial tax increases that would affect most people …These are going to be big tax increases.  The tax brackets may have to shift.  You may have to do more than just dialing up the top tax bracket in a realistic accounting.  I think it seems likely under most proposals taxes would have to go up substantially unless you dramatically cut the health care you’re getting … And I don’t think most proposals envision substantially cutting back on care.  And most envision expanding care which means you’re spending more unless you dramatically cut the price per service.”

Last week, presidential candidateSenator Elizabeth Warren (D-MA) releaseda proposal to pay for Medicare for All that experts agree “significantly [underestimate] the costs,”  The Washington Post reports.  The Wall Street Journal editorial board adds that Warren’s proposal counts “on ideas for cost-savings and new revenue that are a fiscal and health-care fantasy.”

Her Medicare for All proposal will pay for the new one-size-fits-all system by raising $9 trillion by taxing employers which would burden American workers with the unaffordable new tax. “[E]conomists predict that this will get passed onto workers through reduced wages,” Axios reports“[P]ayroll costs of this sort are essentially middle-class taxes on employees.  Fixing per-employee business costs at some future date would also be an incentive for companies to reduce their coverage now to reduce future costs.  So employees would get worse coverage than they have now,” The Wall Street Journal adds.

And as The Washington Post reports“[s]ome analysts have warned that companies would have strong incentives, in the years before such a law’s enactment, to make it appear their health-care costs are low.  Businesses may be encouraged to split off into two entities, one of which might be able to avoid the required health-care contributions because it had none the year before the program kicked off.”

new analysis from the nonpartisan Committee for a Responsible Federal Budget (CRFB) warns that Medicare for All “would require aggressive changes in taxes, spending or borrowing,” adding that “the middle class would be forced to shoulder some of the burden,” Axios reports.  “These policies would have massive economic impacts, reverberating far beyond health care,” Axios adds.  This tracks with a previous analysis released from CFRB which warns that “fully offsetting the cost would require higher taxes on the middle class.”

“[Medicare for All] is extremely difficult if not impossible to pay for by taxing the rich alone, according to both liberal and conservative economists,” The Washington Post confirms.  That’s because “analysts on both the political right and left have estimated [Medicare for All], which [Senator Elizabeth] Warren has said she wholly backs, could cost more than $30 trillion over a decade.  By comparison, the overall federal government spent about $4 trillion last year,” The Post reports.

Shedding additional light on some of these new unaffordable costs, a recent study from the Urban Institute finds “that federal spending on health care would increase by roughly $34 trillion under a single-payer plan similar to Medicare for All,” CNN reports.  Ronald Brownstein of The Atlantic notes that the “eye-popping” cost is “more than the federal government will spend over the coming decade on Social Security, Medicare, and Medicaid combined.”

Bloomberg previously reported that “for many [Americans], higher taxes would exceed any savings … [T]he 181 million taxpayers with employer-sponsored coverage could miss out on the benefits of [Medicare for All], and even those receiving Medicaid could pay more, according to health-care policy experts on both sides of the political spectrum … [A] wealth tax, a bank levy and premiums paid by employers and employees … only raises about half of what is needed, meaning that payroll taxes and income tax increases would necessarily have to be part of the plan.”

And, “economists say that most taxpayers would pay more in taxes than they would save from having the federal government absorb the cost of health-care premiums,” The Post also reports.  Additionally, “71% of households with private insurance would wind up paying more than they would under the current system,” Kenneth Thorpe, chairman of the health policy and management department at Emory University, told The Wall Street Journal.

The simple fact is, “[t]here’s no possible way to finance [Medicare for All] without big middle class tax increases,” Marc Goldwein of CRFB previously explained to The Washington Post.

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