9.24.19 / Updates

Setting The Record Straight On The Unaffordable Costs Of Medicare For All

WASHINGTON – The Democratic presidential campaign has so far been dominated by the discussion of new government-controlled health insurance systems, but when it comes to the unaffordable costs of these systems and the higher taxes American families would be forced to pay, some candidates continue to dodge questions or even misleadingly claim they would save Americans money.

For example, on the debate stage earlier this month, Senator Bernie Sanders (I-VT) used misleading numbers to “imply that his plan would reduce health-care spending from $50 trillion over 10 years to $30 trillion, even though most studies predict spending will increase,” as fact checkers from The Washington Post confirm: “All but one of five major studies, from the left to the right, predict the Sanders plan would increase health spending, not reduce it.”  The Post, which rated Sanders’ rhetoric as “mostly false,” reports:

“Bottom line is that it is incorrect to say that the plan is cheaper than current law, even on a national basis,” [Professor Charles] Blahous said.  “Most of the range of possible outcomes would have total NHE increasing under Medicare-for-all.  The increase occurs primarily because of the increase in the numbers of those covered as well as in the generosity of coverage, both of which would spur additional demand and, other things being equal, additional spending.”  The Mercatus study is not the only detailed look at the potential impact of a single-payer plan on federal spending.  In a 2016 report, the Urban Institute said that federal spending would increase by about $32 trillion between 2017 and 2026 and national health expenditures would increase by $6.6 trillion on top of the status quo in that period.  “The increase in federal spending is so large because the federal government would absorb a substantial amount of current spending by state and local governments, employers, and households,” the report said.  Kenneth Thorpe, chairman of the health policy department at Emory University, in a 2016 study also predicted an increase in spending, as did a Rand Corp. study in 2019 led by Jodi L. Liu … “How this impacts national health expenditures depends on a variety of assumptions.  In our RAND report, we projected a 1.8 percent increase in national health expenditures if Medicare-for-All was implemented in 2019.” 

Meanwhile, Senator Elizabeth Warren (D-MA) continues to avoid questions about the higher taxes Americans would need to pay under Medicare for all.  ABC News reports that Warren has refused to say “whether or not the middle-class would see a tax hike” under her new government-controlled health care system.  And this isn’t the first time Warren has avoided answering this question.  “At each of the last two debates, Warren has been pressed on this and declined to directly answer,” The Washington Post reports.  In the past, 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.”
 
The fact is, “[t]here’s no possible way to finance [Medicare for all] without big middle class tax increases,” as Marc Goldwein of the Committee for a Responsible Federal Budget (CRFB) explained to The Washington Post.  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 Sanders expects.  This may be particularly true of low-income folks who get heavily subsidized coverage on the Obamacare exchanges.”

While proponents of Medicare for all routinely claim that their government-run system would save Americans money, Bloomberg reports that “[f]or many Americans, though, that would not be true,” and “higher taxes would exceed any savings … [T]he 181 million taxpayers with employer-sponsored coverage could miss out on the benefits of the Sanders plan, and even those receiving Medicaid could pay more, according to health-care policy experts on both sides of the political spectrum … [Senator Bernie] 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.”

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