Medicare For All Could ‘Decimate’ The Economy
WASHINGTON – The unaffordable costs, tax increases and negative economic consequences of proposed one-size-fits-all new government health insurance systems – such as Medicare for All, Medicare buy-in and the public option – continue to make headlines. A new analysis from Penn Wharton reveals that Medicare for All could “could shrink U.S. GDP by as much as 24% by the year 2060,” Yahoo Finance reports.
… [T]he model warns, if the plan is deficit-financed – paid for by government borrowing – “the negative effects of larger deficits on labor supply, capital accumulation and GDP would significantly outweigh the positive effects on the economy that come from a larger and healthier workforce.”
… According to studies, the cost of Medicare for all sits at roughly $32 trillion over the next decade. But, as the analysis notes, [Senator Bernie] Sanders’ universal health care plan doesn’t have a built-in financing mechanism … Sanders’ wealth tax would generate $1 trillion less in revenue than he stated … The real trouble comes when Medicare for all is financed by deficits. With government borrowing, universal health care could shrink the economy by as much as 24% by 2060, as investments in private capital are reduced.
The one-size-fits-all government health insurance system “could decimate the economy,” the Washington Examiner adds.
This contributes to the mounting evidence that Medicare for All would burden American families with unaffordable new costs, as 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. The Committee for a Responsible Federal Budget (CRFB) finds that “fully offsetting the cost would require higher taxes on the middle class” and would “require the equivalent of tripling payroll taxes or more than doubling all other taxes.” Senator Sanders previously acknowledged that Americans making more than $29,000 per year would “pay more in taxes” for Medicare for All.
- “No matter how you cut the numbers, there is absolutely no way to pay for Medicare for all without tax increases – or spending cuts – on the middle class,” Marc Goldwein of CRFB told POLITICO. “There’s no question it hits the middle class,” Kenneth Thorpe, Chairman of the Health Policy and Management Department, Emory University told The Washington Post.
- “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 … ‘It’s impossible to have an ‘everybody wins’ scenario here,’ said Kenneth Thorpe, chairman of the health policy department at Emory University … ‘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.’… ‘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.’ … ‘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,” The Washington Post reports.
- 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.
Meanwhile, a study by Tom Church, Daniel L. Heil, and Lanhee J. Chen, Ph.D. of the Hoover Institution with support from the Partnership for America’s Health Care Future reveals that the public option – often branded a “moderate” alternative to Medicare for All – “could require tax increases on most Americans, including middle-income families” and could “add over $700 billion to the 10-year federal deficit, with dramatically larger losses in subsequent years.”
According to the new study, “a politically realistic public option would add over $700 billion to 10-year deficits. By 2049, the plan would increase long-run debt projections by 30 percent of GDP or require tax increases equal to nearly 20 percent of projected income tax revenue. These tax increases may affect even middle-income taxpayers, raising their marginal income tax rates by several percentage points.” This would make the public option “the third largest line item on the federal budget, behind only Medicare and Social Security.”
Economists agree, that the public option would burden American families with unaffordable costs. “The public option would cause premiums for private insurance to skyrocket,” Dr. Scott Atlas of Stanford University writes in The Wall Street Journal. “A single-payer option is not a moderate, compromise proposal. Its inevitable consequence is the death of affordable private insurance … Massive taxation would be needed to expand Medicare, whether optionally or not,” Atlas continues.