Sanders’ 10-year Medicare-for-all plan costs three times more than what the U.S. spent in every war, combined
Yes, that’s adjusted for inflation
Bloomberg published a story Thursday going into a little bit more detail about the sorts of middle class tax hikes would be required to fund the Medicare-for-all plan Bernie Sanders’ has been touting since his last presidential run. Those middle-class tax hikes would be in addition to tax hikes on the wealthy and an increase of the payroll tax from 15 percent to 45 percent.
Though Sanders has not explicitly called for a payroll tax hike, it’s nearly impossible to see how Medicare-for-all finds funding apart from tripling the income and corporate tax rate for virtually every tax bracket.
The report mentions that in 2017 Sanders released options for funding the program including “a wealth tax, a bank levy, and having employers and employees pay premiums”. This list amounted to $16.2 trillion, half the cost of the program over 10 years. The $32 trillion figure the Urban Institute estimates includes additional costs required for the existing Medicaid and Medicare systems.
The U.S. federal budget sits at $4.4 trillion. The government would need to find $3 trillion per year to fund the single-payer program. It would be mathematically impossible for the cost to land on only the upper-class and corporations — even if one set those tax rates at 100 percent. The cost would likely require tax hikes across the income spectrum starting at 50 percent, if paired with the same 30-percentage point increase in the payroll tax.
Of course, all of this doesn’t factor in the economic fallout that would ensue after such hikes particularly with the 2-year phase in that Rep. Pramila Jayapal has introduced in the House.
Advocates have insisted alongside the widely discredited Modern Monetary Theory proposal that the government can pay for part of the program through deficit-spending. While deficit-spending can be beneficial during a recession as a means toward a calculated recovery, the notion that a program with recurring ballooning costs over multiple decades can be sustainably funded via deficit-spending is dubious at best.
Advocates also contend that we’re already spending this money on health care and what we need to do is simply convert this into a tax. A conversion on this scale has never been done before by any country, and as discussed, would an average tax hike of $24,000 per year per household. That number is far from the average $10,000 American households spent as of 2016. It’s also worth pointing out that 5 percent of the population drives 50 percent of all health care spending.
To really try and put the cost of this into perspective: Medicare-for-all would cost three times more than every U.S. war combined.
It would also cost more than all corporate profits combined between 2000 and 2017.
What’s the most likely policy scenario: Perhaps an inching toward a public option that forces competition, and hopefully, better distributes the cost of healthcare. Trump or a future president negotiating down drug prices and even investments in AI which could dramatically reduce the killer costs of administrative work would be the future of genuine cost-cutting health care reform. At that point, we may very well be able to afford a plan like the one Sanders has proposed. Until then, it’s unlikely to become law even with a unified Democratic government with Sanders as president.
Sources:
American Revolution to Persian Gulf estimates , Naval History and Heritage Command. Daggett, Stephen. 2008.
Iraq and Afghanistan estimates, Watson Institute at Brown University. Crawford, Neta. 2018.
Medicare-for-all estimates. Urban Institute. Holahan, John; Blumberg, Linda. 2018
