Politics

In Charts, How ‘Medicare for All’ Would Make Most Families Poorer

medicare-for-allUnder “Medicare for All,” three quarters of Americans would be worse off financially, according to new research from The Heritage Foundation.

Here’s the bottom line: Most Americans, even many of those not making much right now, would pay more in new taxes than they would save from no longer paying for private health care.

That is the reality—but it’s not the story Medicare for All advocates are telling. Sen. Bernie Sanders promises most people will be better off with Medicare for All, and that’s why it’s worth it to make such a massive change to our health care system. The plan would abolish private coverage and force everyone onto a government-run plan.

“Are people going to pay more in taxes?” Sanders asked at a Fox News town hall in April. “Yes. But at the end of the day, the overwhelming majority of people are going to end up paying less for health care because they aren’t paying premiums, co-payments, or deductibles.”

Heritage Foundation scholars Ed Haislmaier and one of us, Jamie Hall, took a hard look at this claim, and found that the politicians are promising more than they can deliver.

In fact, it turns out Medicare for All would cost some working families more than their budget for electricity; others, their gasoline budget; and others, even more than their food budget.

As a result, 73.5% of Americans will have less money in their pockets under Medicare for All. The cost of the new taxes they have to pay will be more than what they save on health care costs.

Households that receive employer-sponsored coverage would be particularly hard hit. Their income after taxes would shrink by an average of $10,554, and 87% of them would be financially worse off.

Even lower-income working families, which currently get health care through government programs like Medicaid and the Children’s Health Insurance Program, would be worse off.  Their average household income after taxes would decline by $5,592 per year.

That’s because fully paying for these programs requires taxes to go up—a lot.

Those pushing for Medicare for All have left out some essential details. No legislative sponsor of this plan has offered a way to fully pay for its promises. Instead, Sanders and Sen. Elizabeth Warren, D-Mass., have put out plans that don’t fully pay for what they’ve promised to provide, and they dramatically overestimate the revenue that new taxes on the rich could raise.

Our study uses the same means to pay for government health care as basically every other developed country uses: payroll taxes.

We ran the numbers and found that Medicare for All would require an additional tax of 21.2 cents on every dollar that every American earns. (Right now, most workers and their employers pay 15.3 cents on the dollar in payroll taxes.)

Adding that on top of other existing taxes would mean the average American would see almost half their income taken by the government.

In real life, we know that if Americans faced that kind of tax increase, some would cut back on work hours or quit working altogether. But we decided not to include that speculation in our study.

Instead, we assumed that all Americans would continue to work just as much as beforehand, while their employers convert current health insurance spending into additional taxable wages.

Under these conditions, here’s how several sample families would fare with Medicare for All.

Olivia Williams: an unmarried mother of two earning $31,000 a year. She would be worse off by $1,547.

Under Medicare for All, Olivia would lose almost exactly the amount she spends on electricity every year.

Today, she gets her health coverage through her job, and her children get their coverage through the Child Health Insurance Program. Under Medicare for All, her current health costs go away—but she’ll still lose $1,547, or 5.3%, of her disposable income.

The Suarezes: a median-income married couple earning about $98,000, with two kids and employer health benefits. They would be worse off by $9,201.

Today, the Suarezes get their health coverage from dad’s employer. Under Medicare for All, their health costs go away, but they’d still lose $9,021, or 13.3%, of their disposable income—about as much as they spend on food today.

The Joneses: a lower-middle-income married couple earning nearly $50,000, with two kids and employer health benefits. They would be $1,619 worse off.

Today, the Joneses get health coverage through mom’s job. Under Medicare for All, their health costs would go away, but they would still lose $1,619, or 4.4%, in disposable income. That’s about as much as they spend today on gasoline.

John Johnson: a median-income unmarried man without dependents. He would be $3,542 worse off.

Today, John earns about $41,000 and gets health coverage through his job. Under Medicare for All, his health costs would go away, but he’ll still lose $3,542, or 13%, of his disposable income. That’s about as much as he spends today on car insurance and maintenance.

Less Money for Most People

Medicare for All would make most Americans worse off financially, not better.

What’s more, Americans would be getting a lower quality product, based on what we’ve seen in other countries with government-run health care. For example, wait times to receive care in Canada are longer than those in the U.S., and in Britain, morale among doctors is often low, since they face bureaucratic hurdles and larger workloads.

However, the status quo in America is not the solution, either. Costs here are too high and choices are too few—and too many Americans feel that special interests and big government benefit from the current system, rather than them.

Congress should work toward real solutions that address these concerns at their root causes. But Medicare for All won’t accomplish that, no matter what its advocates say. It needs to come off the table.

Reprinted with permission from - The Daily Signal - by Marie Fishpaw and Jamie Hall

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Kim

As many of us have written in these pages before, socialists like Sanders, the Fraud Squad, and other progressives are content only when entire industries and their power are concentrated in their “Washington binders”. If they win in 2020, say “Good-bye” to the freedom to go the doctor of your choice at a time before your affliction kills you. I don’t know of any doctors who are looking forward to working for the federal government at a greatly reduced salary. I suppose we’ll have to pay for their education as well, as an incentive to get ANYone to sign up for medical school. The price of a doctor’s diploma will certainly rise….because the FEDS are footing the bill! They are totally inept when it comes to negotiating better prices for anything–remember $500 hammers and $600 toilet seats? Drug prices going up? Well, then, so will our taxes. Why bother working?… Read more »

Hope

I don’t think there’s a socialist program out there that doesn’t leave the citizens in worse shape than they were in before it started. How scary that our school system was able to create a whole generation that doesn’t think things through enough to come to the logical conclusion that everything that’s promised for “free” ends up costing a lot more both in dollars and in freedom. Hopefully they won’t have to learn the hard way.

MIKE

If Medicare for all is so good let ALL government employees and dependents cancel their health insurance for two years. No private visits to doctors, only whatever medicare for all gives them. See how quickly hey come up wit a new program for health care.

Greg Snyder

Do none of these politicians realize that a person still pays a premium for Medicare? Obviously it is less but you still pay, it is not free. The part A (hospitalization) is covered by the funds which are withheld by the payroll tax but you still need the parts B & D if you want your Doctor and medications to be covered or at least partially covered. The ignorance radiating from those discussing this issue is overwhelming.

W A snyder

Do they even realize (or care) the effect on the medical community? Physicians, hospitals, et al, already receive reduced payments from Medicare. (Use to be 60 cents on the dollar when I was active, don’t know what it is now.) Plus, do to increasing restrictions /government guidelines, more clerical staff is needed to complete the appropriate documentation for reimbursement. Additional costs to be absorbed by MDs/hospitals, etc.
Also, wake up call, medicare does NOT approve all medical treatments that commercial carriers allow. They also put limits on care. Check out Medicare guidelines now, that’s what everyone will deal with (not just seniors) in the future. And just watch new restrictions come about ’cause not enough money to cover all care now!

Dale Hammond

I don’t think the pushers of Socialism really believe what they are saying. They are only SPEWING OUT ANYTHING they hope will DECEIVE enough voters for their EVIL intent.

Linda Walter

My thoughts?? I say “You first” to all of the proposals the Liberals & Democrats are proposing. They want us to be on Government Health Care? They should be required to be on the SAME exact plan as the rest of us. They can wait forever to see a doctor as well. They want us law abiding citizens to give up our guns? They can give up their’s along with their armed security details as well FIRST. If we can’t have the right to defend ourselves, they shouldn’t be able to either. Why is it all of these crazy ideas should be embraced by us, but none should apply to them?
We are supposed to have a government of the people, for the people and by the people. Now we have government leaders(not), who think they are The Elite, and we are just sheep. Sheep no more!!

Richard Patterson

Hell, All you have to do is look at what seniors pay to know Medicare for all will hurt everyone’s bottom line. Healthcare has been made so unaffordable by government that it’s a sin. Hey kiddies, remember this, you get what you pay for in this world except when it comes for the government. When it comes to government, you get way way less. I’m about to turn 65 and it is going to cost me $144 for Medicare and then I have to pay for a supplement which will cost anywhere from $90 to $400. If you get the cheaper supplement you will have to pay$45 for dental, $45 for Rx, another $49 or so for an insurance to pay for chemo like services. They nickel and dime you to death. If you opt to not get a supplement and go with an advantage plan, you get denied for… Read more »