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Medicare for All and Increased Taxes for All As Well

The number one issue in the 2020 Presidential campaign is health care.  This has been an ongoing debate for many years.  Liberals want to move to a universal health care system funded and run by the federal government.  This is consistent with their belief that the government can do things better than the private sector and allows them to cater to people who believe that these things would be free for them.

Warren

Elizabeth Warren had passed Joe Biden in most polls and is now the front runner for the Democrat nomination.  She is proposing a Medicare For All health care system and has dodged repeated questions about how she proposes paying for the system.  The key question being asked to her regards raising taxes on the middle class.  Chris Matthews (liberal commentator on MSNBC) posed this question to her repeatedly in an interview and she refused to answer the question, deflecting it with vague comments about how it will save money.

There is a reason why she won’t directly answer this question.  Announcing in the middle of a campaign that you intend to raise taxes on the middle class would be disastrous and her opponents, both on the left and right, would pounce on her with a ferocity that send her plummeting in the polls.  Experts have been looking at these proposals and two independent studies have estimated the cost would add $32 Trillion to the federal deficit over the next 10 years.  That is on top of the $23T we already have in deficits. (Mercatus Center – George Mason University and Urban Institute). I have linked these two studies at the end of this post.

Elizabeth Warren has been saying that she will shortly announce how she will pay for her health care plan.   Front and center will be a proposal to tax the “wealthy” in this country at higher and higher rates.  But every economist looking at this has said that taxing the wealthy will not cover the trillions of dollars in cost.  Others will have to be taxed.  And remember, Warren has proposed tuition free college and free childcare, and both will be funded by taxing the wealthy.  She obviously believes that the wealthy people in this nation have a lot more money than reality suggests they do.  The “wealthy” in this country are already paying a significant amount of the federal income tax base and she believes they can pay more.  The top 1% in this country paid 37.3% of the federal income taxes and the top 10% paid 70% of the taxes.

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Bernie Sanders has been pushing a similar program but at least he has been honest about how to pay for it.  He admits that taxes for everyone will have to go up, but he disguises that comment by saying that people will make up for the increased taxes by not having to pay for health insurance.  That argument fell flat with many unionized workers in this country who have negotiated pretty good health care benefits in their contracts and they will not give them up willingly.  Starts to sound like that other famous quote “you can keep your doctor.”

The second argument she makes in paying is that there will be savings since administrative costs will go down.  Now I may be a cynic, but I have never seen a program run by the government be more efficient than one run by the private sector.  Last year administrative costs in Medicare and Medicaid increased by 4.6% which is higher than inflation.  She states that costs will go down since employers will not be paying for health care for employees and the employee share will also go away.  But then she counters by saying they would have to raise the payroll tax for Medicare.  She tries to wiggle on the middle-class tax cut issue by saying it would only apply to employers and not employees.  Currently both pay 1.45% towards Medicare.  If you increase that on employers, you can be sure they will pass that cost along to employees in the form of lower wages.  If you increase it on employees, then the middle class will be getting a tax increase.

I should also mention that the majority in the middle class are employed and getting some form of health insurance from their employer.  This would go away and they would be stuck with the increase in taxes without the coverage they have been used to having.

When you look at the real facts there are many reasons to avoid a Medicare for All plan.  Comparing us to Canada and some European nations is like comparing apples to oranges.  We have a much more diverse population and therefore many different health care issues.  The best example of how this would work would be to look at Medicaid.  This is the program for the needy in this country and is administered by the states with federal assistance in funding.  Medicaid spent an average of $6500 per enrolled patient and those number increase significantly as the population ages.  Those under Medicaid that are over 50 but not old enough to be covered on Medicare (age 65) show costs of nearly $21,000 per enrollee.  Medicare is already the third item in the budget by expenditures and if you include all federal health care spending it is second only to Social Security.  As the nation ages these costs are only going to rise.

Then we have to look at fraud in Medicare.  It is rampant.  Insurance companies are often criticized because they scrutinize bill sent to them for payment.  In some cases, they should be criticized for refusing to pay legitimate costs.  But in Medicare that scrutiny is significantly less, and fraud has continually risen.   James Cosgrove, who reviews health care expenditures for the GAO, told a House committee that fraud and overpayments had risen to $16.2 billion.  That data was for 2016 and you can bet it has only increased.

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In summary, if we were to move to a universal health care system you can expect your taxes to increase no matter where you fall on the economic ladder and you can expect those cost to rapidly increase because every study has shown that once there is no longer a cost to visiting the doctor more people will be scheduling appointments for the most simple of maladies.  I have not even touched on the reimbursement policies for doctors and hospitals and if you have friends that are on Medicare ask them how easy it is to get a general practice doctor to accept you as a patient.  The reimbursement rates have been driven so low that doctors must limit the number of Medicare patients they can see.

But all of this is of little value to liberals such as Warren and Sanders.  They are pandering to voters by promising them that the government will take care of everything in their lives and it they cannot or don’t want to work that is fine.  We can just take some money from someone else and use it to make sure that you are comfortable.  After all, it is free.

 

https://www.urban.org/sites/default/files/publication/80486/200785-The-Sanders-Single-Payer-Health-Care-Plan.pdf

 

https://www.mercatus.org/system/files/blahous-costs-medicare-mercatus-working-paper-v1_1.pdf

 

 

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