11.6.19 / Updates

The Wall Street Journal: ‘States’ Attempts At Medicare-For-All Proposals Haven’t Ended Well’

WASHINGTON – As the unaffordable costs of a Medicare for All system are made clear to voters, The Wall Street Journal reports that efforts to implement a similar one-size-fits-all government-controlled health insurance system on the state level “haven’t ended well,” as the “final numbers were too high to sell” taxpayers.  They explain:

Vermont is the closest test case to the candidates’ Medicare-for-All proposals because it went the furthest in pursuing a single-payer health-care approach.The idea found support in the progressive state, where only 29% of registered voters are Republican or lean toward supporting the GOP, according to the Pew Research Center.  Vermont in 2011 elected as governor Democrat Peter Shumlin, who ran on a single-payer campaign … But no specific funding plan was worked out before the legislature passed a bill calling for the launch of a guaranteed health-care system.  State officials eventually in December 2014 released a financing proposal that would have seen businesses pay an 11.5% payroll tax increase and called for a 9.5% jump in income tax.The plan came to a crashing halt.

A recent editorial in the swing state of Nevada reminds readers that the effort to implement a one-size-fits-all system in Senator Bernie Sanders’s (I-VT) home state of Vermont “was a spectacular failure.”  The editorial, from the Las Vegas Review Journalrecounts how the unaffordable costs and massive tax increases associated with a new government-controlled system ultimately led to its demise: “The first step toward implementing it was figuring out how to pay for it.  Despite promises that a state takeover of health care would save money, the required tax hikes proved prohibitive.

And, drawing similar conclusions, Peter Suderman, a columnist for The New York Timesexplains that  Vermont’s failure to implement a Medicare for all style system “demonstrates why any similar project undertaken at a national scale is unlikely to succeed as well.”

… One reason the plan lacked strong support was lawmakers were cagey about how to pay for it.  The 2011 proposal included no specific financing mechanism, because Mr. Shumlin’s team worried that might kill its chances …  [B]y 2014, Mr. Shumlin’s own estimates found that employers would have to pay taxes equal to about 11.5 percent of payroll, while families would have to pay as much as 9.5 percent of their annual income to make the financing work.  The plan would have nearly doubled the size of the state’s budget.  For both political and economic reasons, the cost was deemed too high … Any effort by a Sanders administration to enact a single-payer system at a national level would probably be doomed by similar problems. 

The New York Times editorial board also acknowledged that “[i]n Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.”

When it comes to a one-size-fits-all system, The Journal notes that “[p]aying for it would be equivalent to a 32% payroll tax or a 25% income tax, according to a new report by the nonpartisan Committee for a Responsible Federal Budget.”  CFRB finds that even a low-end cost estimate of $30 trillion over a decade “would mean increasing federal spending by about 60 percent (excluding interest)” and “require the equivalent of tripling payroll taxes or more than doubling all other taxes.”  And the fact is, “[t]here’s no possible way to finance [Medicare for All] without big middle class tax increases,” CRFB’s Marc Goldwein explained to The Washington Post – a fact that even the bill’s author acknowledges.  

And while the bill’s co-sponsors 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 Washington Post reports.

A recent study from the Urban Institute finds that under Medicare for All “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.”

To pay for this unaffordable new system, economists agree that there’s simply “no way to pay for Medicare for all without tax increases … on the middle class.”

A 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.

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.”

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 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 while a supermajority of Democrats (69 percent) support building and improving on what we have today over new government insurance systems.

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