Medicare for All: Who’s going to pay for it?
“Elizabeth Warren is being fundamentally dishonest about Medicare for All,” said Peter Suderman in Reason.com. Like fellow Democratic presidential candidate Bernie Sanders, Warren supports a government-run, single-payer health-care system that would theoretically cover all Americans. But unlike Sanders, Warren has refused to admit that her plan would require most people to pay higher taxes—including the middle class. It’s estimated that a single-payer health-care system that covered all Americans would cost the government an extra $3 trillion per year—or about $32 trillion to $34 trillion over a decade, depending on the study. By comparison, the current size of the U.S. budget is $4.4 trillion. If federal spending is to grow by more than 60 percent, it will require major tax increases. But during the last Democratic debate, Warren repeatedly dodged questions about whether she would raise taxes on the middle class, insisting that Americans will pay less for health care overall. After being called out by her moderate Democratic rivals during the debate for her evasions, said John Hirschauer in NationalReview.com, Warren now says she’ll release a detailed plan for paying for Medicare for All. It will inevitably require the middle class to pay more in taxes, just as they do in Europe. “If you want a Scandinavian-style welfare state, you’ll need a Scandinavian-style tax code to pay for it.”
Americans already pay sky-high taxes for health care—we just don’t call them that, said Eric Levitz in NYMag.com. The insurance premiums taken out of your paycheck are “de facto taxes” that go to private insurance companies instead of the government. If you add insurance premiums to payroll taxes, the average American worker with two kids effectively paid a 43.2 percent tax rate in 2017. According to the conservative Mercatus Center, Americans will spend $34.6 trillion on health care over the next decade under the current system, which leaves 30 million people uninsured. That’s more than Medicare for All is expected to cost. Unfortunately, Democrats have come to accept “Republican anti-tax ideology,” said Paul Waldman in The Washington Post. It’s absurd to insist that “it would be somehow worse to pay more in taxes while paying less in premiums and co-pays.” Warren has been dodging and weaving because she doesn’t want to show up in a GOP attack ad saying “I will raise taxes.”
Even if Warren is elected president, said Ronald Brownstein in TheAtlantic.com, Medicare for All would not be politically feasible. None of the taxes Warren has already proposed would come close to raising $32 trillion over the next decade. Her proposed wealth tax on personal fortunes exceeding $50 million would raise just $2.75 trillion over that period. Repealing the recent GOP tax cuts would raise only about $2 trillion. To cover the cost of single-payer, federal revenues would have to increase from 16.6 percent of the economy to nearly 30 percent by 2029. Barring a political revolution, a taxing-and-spending binge of that magnitude would never get through Congress.
There’s also the problem of what to do about private insurance, said Paul Krugman in The New York Times. If we were building a health-care system from scratch, Medicare for All might be the way to go. But as it stands, more than half of Americans are already covered through private insurance, mostly through their employers. Many of them don’t love their insurance companies, which charge, on average, more than $20,000 a year for an employer-sponsored family plan. “But that doesn’t mean that they’re eager to trade the coverage they know for a new system they don’t.” While polls show that support for Medicare for All is slipping, 73 percent of Americans support a “public option” in which people can opt into Medicare if they want to—or keep their private insurance if they prefer. By insisting on eliminating private insurance, Warren “may have painted herself into a corner.” She should quickly pivot to something “politically doable.”
The question is, will she? said William Saletan in Slate.com. Or does Warren have the uncompromising “soul of an ideologue”? The Massachusetts senator has run an impressive campaign so far, with a compelling message about economic fairness that has her vying with former Vice President Joe Biden for front-runner status. But on a critical issue, Warren has “nailed herself to a coercive and unpopular position”—taking away private health insurance from 150 million Americans. Perhaps if she wins the nomination, she’ll “modify Medicare for All and repackage herself as a sensible progressive who can unite the country.” If she doesn’t, there is a real risk she hands a winnable election to President Trump. ■