Study: Medicare For All Would Require Huge Tax Hikes On The Middle Class
Several studies estimate Sen. Bernie Sanders’ recently released Medicare for All (M4A) plan would cost approximately $30–$40 trillion over the next decade.
Several studies estimate Sen. Bernie Sanders’ recently released Medicare for All (M4A) plan would cost approximately $30–$40 trillion over the next decade. When most Americans hear massive projections like this, their eyes gloss over—or roll into the back of their heads. It is difficult for a person to grasp how much $30 trillion actually is.
Yet when huge government plans that cost giant sums are calculated to accurately reflect how much average households would have to pay, things become much clearer. Fortunately, in a new study Justin Haskins, a research fellow at The Heartland Institute, provides a much-needed breakdown of just how much Americans (across all income brackets) would have to pay in additional taxes if Bernie’s health care plan becomes the law of the land.
In “Estimating the Income Tax Hikes Required to Pay for Bernie Sanders’ Medicare-for-All Plan,” Haskins provides Americans a glimpse of roughly how much more they would be required to pay Uncle Sam every year. Additionally, it briefly addresses whether the 180 million Americans with private insurance would be better off with Bernie’s plan or with their employer-sponsored plan.
As Haskins reveals, if the federal government is going to fully fund Medicare for All, the middle class and wealthy would likely need to bear nearly all of the increased tax burden required to cover its costs. In many cases, tax burdens would double, and for tens of millions of families, the increased taxes would far outweigh the financial benefits gained by not needing to pay for health insurance premiums and out-of-pocket costs.
For example, in 2022, Haskins estimates Americans earning $50,000–$74,999 would likely need to pay on average $7,773 to $9,171 more in new taxes every year. Those earning $75,000–$100,000 would likely pay an astounding $12,915–$14,880 in increased federal taxes. That means Bernie’s plan would financially decimate many in the middle class.
Of course, Sanders would like you to believe that his M4A plan would be fully funded by the millionaires, billionaires, and corporations he so often derides. However, this is simply not practically possible. As Haskins notes, “Even if the federal government were to confiscate every penny belonging to every person on Forbes’ ‘400 Richest Americans’ list, it would only amount to $2.9 trillion, much less than one-tenth of the 10-year cost of Medicare for All.” And then the money would be gone.
Further, Sanders’ own Senate office basically admitted it couldn’t fund Medicare for All by only raising taxes on the wealthy and businesses in its “Options to Finance Medicare for All” paper. Despite offering numerous proposed tax increases, Sanders’ own estimates—which are undoubtedly rosy, to say the least—only account for about half of the lower-end estimates for Medicare for All. Where is the rest of the funding coming from?
Since Sanders’ bill has been released, he has been forced—most recently during a Democratic presidential debate—to admit that the middle class would face tax increases as a result of Medicare for All. But Sanders claimed then, and still claims now, those tax increases would be completely offset by the fact people wouldn’t need to pay other health care costs.
Although Sanders’ Medicare for All plan doesn’t include details outlining exactly how it would be paid for, his claim—which has been repeated by numerous others, including Sen. Elizabeth Warren—that everyone in the middle class would end up saving money as a result of Medicare for All is almost certainly a lie.
According to Haskins’ analysis, “millions of middle-class individuals and families would need to pay thousands of dollars more every year for health coverage than they do now, and it’s likely the quality of the health care they would receive under M4A would be substantially worse.”
How did Haskins come to this conclusion? By taking the additional expected cost to the federal government for Medicare for All, subtracting a variety of business tax revenues expected to be collected under the program, and then dividing those new costs among all tax filers, in proportion to how much they have been paying for all other federal programs.
The result is stunning. “It’s likely at least 40–60 million American households would pay more for their health coverage in 2022 under Medicare for All than they otherwise would,” Haskins notes—and that figure does take out-of-pocket costs, like health insurance deductibles and copays, into account. This means tens of millions of American households would likely have to pay thousands more every year for substandard government-run health care if Bernie’s plan ever sees the light of day.
The bottom line is Bernie’s M4A plan would be a debacle. It would upend one-seventh of the U.S. economy. Even worse, it would put the government in charge of handling the nation’s health care system, arguably the most vital and complex economic sector.
As history has repeatedly shown, top-down, one-size-fits-all systems like Sanders’ M4A plan are recipes for disaster. These draconian approaches almost always fail to deliver effective and efficient services. Moreover, huge government programs nearly always create bloat, corruption, cost overruns, and all sorts of unintended consequences.
Further, Americans should be skeptical when politicians tout government-run health care. Just remember the assurances made by President Obama while promoting the so-called Affordable Care Act. Obama promised Americans (37 times), “If you like your health care plan, you’ll be able to keep your health care plan.” As we now know, this was false. Indeed, PolitiFact named it the Lie of the Year for 2013.
Obama also said health care insurance deductibles and premiums would decrease after Obamacare became law. In case you missed it, the exact opposite has happened.
Of course, some Americans—generally those who earn more than the cut-off for Medicaid but less than what is needed to comfortably pay for an expensive Obamacare plan—would benefit from Bernie’s M4A program, as Haskins notes in his analysis. However, they would only benefit at the expense of tens of millions of other households, and everyone would be subjected to inferior medical services.
There are much better ways to improve the health-care market than robbing Peter to pay for Paul’s medical bills. Let’s try those instead.
[Originally Published at The Federalist]