February 21, 2020 | Updates

Reviewing The Research: Medicare For All Comes With Many Costs (Both Known And Unknown)

A recent study published in the journal Lancet, “Improving the prognosis of health care in the USA,” offers unrealistic and misleading figures about the cost of Medicare for All. A growing body of research shows Medicare for All would force Americans to pay more to wait longer for worse care. 

A Number Of Academics, Think-Tanks, And Non-Partisan Organizations Have Found Medicare For All Could Require Tax Increases On Americans And Could Increase Health Care Expenditures For The U.S. Federal Government. 

  • Middle Income Families Would Have to Pay More Taxes Under Sanders Bill. “Sanders does provide a helpful list of possible tax hikes that could be considered: a 7.5 percentage point increase in the payroll tax; an income-based premium paid by all Americans (roughly a 4 percent income tax); significant increases in tax rates for those earning more than $250,000 per year; increased corporate taxes; big increases in the capital-gains tax; and a new wealth tax. Of course, some of the new taxes would be offset by the legislation’s elimination of insurance premiums and out-of-pocket costs. But most middle-income families would likely end up as net losers — and that’s without taking into account the drag on economic growth and job creation that would result from taxing risk-taking and entrepreneurship.” (Michael Tanner, National Review, 4/17/2019)
  • Medicare For All Leads To Massive Tax Increases No Matter What. “Proponents counter that the proposal would reduce federal health-care spending in three main ways—lower drug prices through government negotiations, lower reimbursement rates for medical services, and lower administrative costs by eliminating insurance companies. They also argue the proposal would increase federal tax revenue by repealing the deduction for employer-provided insurance. But these four factors are already built into the previous estimates. However you cut it, Medicare for All would inevitably lead to massive tax increases.” (Robert Pozen, Wall Street Journal, 5/1/2019)
  • According To The Nonpartisan Congressional Budget Office (CBO), “Government Spending On Health Care Would Increase Substantially Under A Single-Payer System Because The Government (Federal Or State) Would Pay A Large Share Of All National Health Care Costs Directly.” (“Key Design Components and Considerations for Establishing a Single-Payer Health Care System,” Congressional Budget Office, 5/1/19)

What’s More, Individual And Corporate Income Tax Increases Still Could Not Finance The Full Cost Of Medicare For All.

  • “Doubling All Currently Projected Federal Individual And Corporate Income Tax Collections Would Be Insufficient To Finance The Added Federal Costs Of The Plan.” (Charles Blahous, The Costs Of A National Single-Payer Healthcare System, Mercatus Center, 2018)
  • “Doubling Federal Individual And Corporate Income Tax Receipts Would Not Cover The Full Cost.” “The latest plan from the Vermont independent would deliver significant savings on administration and drug costs, but increased demand for care would drive up spending, according to the analysis by the Mercatus Center at George Mason University in Virginia.  Doubling federal individual and corporate income tax receipts would not cover the full cost, the study said.”(“‘Medicare For All’ Could Cost $32.6 Trillion, George Mason Study Says,” Associated Press, 7/30/18)
  • Studies Conducted By Urban Institute & Mercatus Center Raise The Question Of The Financial Feasibility Of Senator Bernie Sanders’ (I-VI) Medicare For All Proposal. “According to studies from both the liberal Urban Institute and the conservative Mercatus Center, Sanders’ plan would increase federal spending by $32 trillion over 10 years. Even doubling all federal individual and corporate tax receipts would be insufficient to pay that cost.” (Jim Hartman, Nevada Appeal, 06/06/19)
  • Senior Fellow At The Manhattan Institute Believes Medicare For All’s Tax Increase Will Cause More Harm Than Good. “Sanders has proposed a wealth tax, a bank levy and premiums paid by employers and employees. But that 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. ‘There are likely to be a lot more losers than winners,’ Brian Riedl, a senior fellow at the right-leaning Manhattan Institute. ‘It’s hard to do the tax shift without making most families losers.’” (Laura Davison, Bloomberg, 07/02/19)
  • Health Care Would Not Be Free With Single Payer. “Care would not be free in a single-payer system — it would be paid for differently. Instead of paying insurance premiums, people would pay taxes, which would be collected by a government agency and used to pay for health care on behalf of the population. Some in higher tax brackets might pay more under a single-payer system than under the current system, while others might pay less. Many single-payer proposals, including Sen. Bernie Sanders’ “Medicare for All” proposal, cover a comprehensive range of services with no or very low co-pays and deductibles. While common in many proposals, a single-payer system would not necessarily eliminate all out-of-pocket expenses. In fact, the current Medicare program, which some consider a form of single payer, has deductibles and co-pays.” (Jodi Liu, USA Today, 10/26/2018)

Contrary To The Study’s Claims, Medicare For All Would Increase Taxes But Lower Overall Health Care Costs, Most Americans Would End Up Paying More Under Medicare For All Than Under Their Current, Private Coverage.

  • CRFB: Medicare For All Would “Require The Equivalent Of Tripling Payroll Taxes Or More Than Doubling All Other Taxes.” “While any new revenue would in part be replacing current premiums, identifying pay-fors still remains a challenge.  Enacting this type of Medicare for All would mean increasing federal spending by about 60 percent (excluding interest), and financing a $30 trillion program would require the equivalent of tripling payroll taxes or more than doubling all other taxes.” (“How Much Will Medicare for All Cost?” Committee For A Responsible Federal Budget, 2/27/19)
  • CRFB Chairman: “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.” (Dan Diamond, “The Hard Choices Facing ‘Medicare For All,’” POLITICO, 10/29/19)
  • 71 Percent Of All U.S. Household With Private Insurance Today, Would Pay More Under Medicare For All. (Stephanie Armour, “Medicare for All Loses Support Amid Lack Of Detail on Costs to Voters,” The Wall Street Journal, 10/17/19)
  • “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.” (Matt Viser & Sean Sullivan, “Will Medicare-For-All Hurt The Middle Class? Elizabeth Warren And Bernie Sanders Struggle With Questions About Its Impact,” The Washington Post, 10/5/19)
  • Democratic Strategist Cautions That Medicare For All Could Cost People Currently On ACA Medicaid Expansion More Money Than They Currently Pay. “It is concerning that among the financing options floated include higher costs on some families currently covered at no cost under the Affordable Care Act’s Medicaid expansion,’ says one progressive policy strategist who requested anonymity in order to avoid a public spat with Sanders. ‘Growing support for universal health care is through isolating necessary tax increases to the wealthy, not working families, and single-payer proponents have yet to detail how to make that math work.’” (David Cantanese, US News, 4/12/2019)

Medicare For All Would Hurt Access To High-Quality Care — Hurting Communities Who Need It Most.

  • Issue Brief: Medicare For All “Could Have A Significant Negative Impact On The Adequacy Of The Country’s Health Care Workforce, Access To Care, And, Ultimately, Patient Outcomes.” (“Medicare For All And The Future Of America’s Health Care Workforce,” FTI Consulting, 1/13/20)
  • According To The Issue Brief, The Reduction Of Physicians “Would Be Felt Most Acutely In Rural Communities Already Experiencing Access Challenges … Shortages Of Healthcare Workers In Rural Areas Widen Existing Health Disparities And Contribute To Hospital Closures.” (“Medicare For All And The Future Of America’s Health Care Workforce,” FTI Consulting, 1/13/20)
  • Experts Warn That “Some Hospitals, Especially Struggling Rural Centers, Would Close Virtually Overnight,” And “Others … Would Try To Offset The Steep Cuts By Laying Off Hundreds Of Thousands Of Workers And Abandoning Lower-Paying Services Like Mental Health.” (Reed Abelson, “Hospitals Stand To Lose Billions Under ‘Medicare For All,’” The New York Times, 4/21/19)
  • Kate Baicker, Dean Of The University Of Chicago Harris School Of Public Policy: “I’m Not Sure That We Can Lower Overall Health Spending Without Restricting Access To Care In Ways That People Might Not Like, Such As Through Denying Coverage, Or Even Shortages Caused By Cutting Back On Reimbursement Rates It’s Unrealistic To Hope That We Can Insure More People But Spend Less On Health Care Overall Without Substantially Cutting Back On Payments Or Restricting Services, Both Of Which Would Restrict Access To Care For The Insured.” (Jason Millman, “Would ‘Medicare For All’ Really Save Money?,” POLITICO, 11/25/19)
  • Forcing Providers To Lower The Cost Of Care Could Lower Americans’ Access To Care And The Quality Of Care They Receive. (“Key Design Components and Considerations for Establishing a Single-Payer Health Care System,” Congressional Budget Office, 5/1/19)
  • Congressional Budget Office: “… If There Was Little Or No Cost Sharing And Payment Rates Were Substantially Lower Than What Providers Would Receive Under Current Law, CBO Expects That Average Wait Times Would Increase.” (“Answers to Questions for the Record Following a Hearing Conducted by the House Committee on the Budget: Key Design Components and Considerations for Establishing a Single-Payer Health Care System,” Congressional Budget Office, 12/20/19)

Yale’s Analytical Tool Is Misleading And Out Of Touch With The Consensus Reached By A Growing Number Of Think-Tanks, Academics, And Economists.

  • One Red Flag. If You Set Every Parameter In The Authors’ Model To The Most Expensive Possibility, You Still Only Get A Federal Cost Of $1.5 Trillion In The First Year. That Doesn’t Mesh W/ The $25 To $35 Trillion Most Estimate W/ Reasonable Assumptions.” (Marc Goldwein, Committee for a Responsible Federal Budget, 02/17/20)



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