October 9, 2019 | Updates

Experts Warn: Medicare For All ‘Has To Hit The Middle Class’

WASHINGTON – As concern grows over the unaffordable costs associated with Medicare for all, some proponents of the new government-controlled health insurance system “are scrambling to ease concerns that it would create higher costs for many middle-class Americans,” The Washington Post reports.

Although [Medicare for all’s supporters] have frequently stressed that the middle class would see overall costs go down, a wide range of experts … say it is impossible to make those guarantees based on the plans that the candidates have outlined so far.  “Obviously, all of the 180 million people who have private insurance are not going to pay less.  It’s impossible to have an ‘everybody wins’ scenario here,” said Kenneth Thorpe, chairman of the health policy department at Emory University.  “The plan is by design incredibly disruptive.  As a result, you create enormous winners and losers.”  “There’s no question it hits the middle class,” he added.  John Holahan, a health policy expert at the nonpartisan Urban Institute agreed: “Even though high-income people are going to pay a lot more, this has to hit the middle class.”  

The fact is, “[t]here’s no possible way to finance [Medicare for all] without big middle class tax increases,” Marc Goldwein of the Committee for a Responsible Federal Budget (CRFB) explained to The Washington Post – a fact that even the bill’s author acknowledged recently.

And while some proponents try to push the argument that the increase in taxes would be offset by savings, “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 reports.

“Most of the proposals to move to Medicare-for-all would involve substantial tax increases that would affect most people,” said Katherine Baicker, an economist at the University of Chicago who specializes in health policy. “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,” she added.  “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.” 

Bloomberg previously reported  that “for many, 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.”

Fact-checkers for The Washington Post note that “[a]ccording to a study from the Urban Institute (and a follow-up paper), Medicare-for-all would still add $32.6 trillion to national health spending over 10 years.”  And CNN reports that “[t]ax experts … say that you can’t raise enough money from taxing the rich and that the levies on all Americans may exceed the savings for more people than [expected].  This may be particularly true of low-income folks who get heavily subsidized coverage on the Obamacare exchanges.”

Meanwhile, other supporters of Medicare for all, such as Senator Elizabeth Warren (D-MA), have gone out of their way to avoid acknowledging the higher taxes Americans would need to pay under Medicare for all.  The Washington Post reports:

Warren has been pressed in a variety of settings — on debate stages, in interviews, on late-night television shows — but has avoided the question of costs to the middle class.  MSNBC’s Chris Matthews asked her the question in late July several times without an answer, to the point that he said in frustration, “I’m not getting anywhere.”  When asked specifically how she would finance Medicare-for-all, Warren’s campaign said that she is “reviewing the options” suggested by Sanders and is also examining “other options” for how to pay for the plan.  Her campaign would not outline what that entails.

ABC News previously reported that Warren has refused to say “whether or not the middle-class would see a tax hike” under the new government-controlled health care system she proposes.  “At each of the last two debates, Warren has been pressed on this and declined to directly answer,” The Washington Post reports.  Warren has said that she would pay for Medicare for all through taxes on the wealthy and corporations.  But as James Freeman points out in The Wall Street Journal“[e]ven if one believes the Warren math, she’s more than $28 trillion short.”  

Meanwhile, the Kaiser Family Foundation finds that 60 percent oppose Medicare for all when they learn it would require most Americans to pay higher taxes.  And Voter Vitals – a new quarterly tracking poll conducted nationwide and in 2020 battleground states – finds that a majority of Democratic voters are unwilling to pay any more in taxes for universal coverage and a supermajority of Democrats (69 percent) support building and improving on what we have today over new government insurance systems.



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