© Josh Sager October 29, 2019
Medicare for All is a very simple program that would have an extremely large positive impact on the health and wealth of the American people. It would bring the USA in line with the rest of the developed world, ensuring that all Americans have access to vital healthcare at a price they can afford. No American would face bankruptcy simply because they developed an expensive disease (e.g. cancer) and millions of Americans would no longer be reliant on their employers for their healthcare.
In totality, M4A would benefit all but the richest Americans and the insurance companies that profiteer off of the current system. Unfortunately, public policy can be confusing and many Americans simply don’t have the time to do in-depth research on the subject, thus can be taken in by lies propagated by these wealthy interests.
The three most persistent attacks on Medicare for All are:
- It will raise the taxes of middle class Americans, which will hurt the average American family
- It will cost trillions of dollars and so we can’t afford it
- It will take away Americans’ ability to choose the insurance coverage that works best for their needs
Insurance companies spend millions of dollars each year to spread these disingenuous attacks. For example, in 2016, Blue Cross Blue Shield alone spent nearly $35 million on lobbying and political contributions to politicians running for office. This money has a real impact on shaping the establishment narrative on health policy and pro-corporate politicians, including Democrats like Biden and Buttigieg, are all too willing to magnify these false narratives in order to hurt their more liberal political opposition (i.e. Bernie and Warren).
Here are some quick facts that will help inoculate you from all three of these talking points and let you address the disinformation on this subject floating around social media:
Higher Taxes, More Money in Your Pocket
It is true that Medicare for All will require tax increases for not only the wealthy, but also the middle class. However, these taxes will REPLACE the premiums, deductibles and copayments that Americans currently pay. Effectively, under M4A, the middle class will end up paying less for coverage than they are now, but payments will be called taxes and go to the government, rather than being called premiums and go to a private company. Additionally, patients will pay nothing out of pocket (e.g. deductibles, copayments, and coinsurance) when you decide to use your coverage.
In 2015, the average American family with employer coverage paid 10.1% of its income on health insurance premiums and deductibles—this doesn’t take into account copayments and coinsurance for care. Under the Medicare for All plan proposed by Bernie Sanders, a middle class family would only pay a 4% income tax, with the remaining costs being paid for through a 7.5% employer tax and redistribution from several tax increases aimed at millionaires and billionaires (e.g. a 1% wealth tax with a $21 million exemption).
In addition to reducing coverage costs, M4A eliminates coinsurance and copayments, so the real financial benefits for families that rely on expensive care would be far greater than the average. For example, if you get cancer and require medicine that costs $100,000/year, you would end up paying $20,000 out of pocket if your plan requires the average 20% coinsurance. Under M4A, you would just pay the 4% tax for coverage and would pay $0 out of pocket when accessing care.
Here is an estimate from a study by the Political Economy Research Institute on the impact of M4A on select demographics—as you can see, every middle and working class group benefits while wealthy individuals will experience moderate increases in costs:
If the government were to subsidize your income by $1000 in cash if you pay $300 more in taxes, would you take it? Of course you would, because, while nobody wants to pay more in taxes, accepting the tax increase would put $700 more in your pocket at the end of the day.
Medicare for All Costs Trillions, but is Less Expensive than Doing Nothing
It is undeniably true that expanding Medicare to cover all Americans will cost the government trillions of dollars each year. Media pundits, politicians, and insurance lobbyists throw out these large numbers as a reason why the policy is unreasonable, but they neglect to mention that we will spend more by doing nothing and staying with the status quo.
Even researchers who oppose M4A can’t deny that it will save money. According to a study by the Mercatus Center, funded by the Koch family, Bernie’s Medicare for All plan would cost the US government $32.6 trillion in its first ten years. This number sounds enormous until you realize that this same study estimated that we will spend over $2 trillion MORE under the current system over the same time period, while still leaving 30 million uninsured.
The Mercatus Center’s projections are based in very conservative assumptions and other analyses of M4A predict significantly higher savings. For example, a study by the Political Economy Research Institute found that it would reduce costs by 9.6%, which amounts to $5.1 trillion in cost savings.
We are facing a choice between two paths, both of which will cost us tens of trillions of dollars over the next decade: Medicare for All costs less and provides every American with comprehensive coverage, while maintaining the current private system costs more and leaves millions uninsured or underinsured. Looking at the costs of just one path without factoring in the alternatives is inherently disingenuous and exploits the ignorance of the American public to deny them a policy that would improve their health and save them money.
Does Medicare for All Destroy Your Ability to Choose Your Insurer?
Put simply, the idea that Americans benefit from having a “choice” between insurers that lets them shop around for the best deal is fallacious because most Americans already don’t have a real choice between different insurers.
If you obtain your insurance through an employer or union, odds are that your insurer is already decided for you. For example, if your employer has a contract with Aetna for group insurance coverage, you won’t have the “choice” to obtain your coverage through BCBS.
If you decide to purchase individual insurance, your choices aren’t much better. Individual health insurance markets in the USA are extremely consolidated and Americans living in many states have no real choice of insurers under the current system. In ten states (and D.C.), one insurer controls over 80% of the individual market and, in 30 states, over half of the private insurance market is controlled by a single insurer. At best, Americans living in a majority of states have the ability to choose between two insurers that dominate the state market; at worst, they are at the mercy of a single private monopoly (e.g. 100% of the individual market in Delaware is controlled by Highmark). Medicare for All eliminates the illusion of choice enjoyed by the people living in these states, but it replaces it with high quality comprehensive coverage.
While real insurer choice is often an illusion, people still desire it in the current system because they want to choose a plan with the coverage and costs that fit their means. Under M4A, there are no out of pocket costs, premiums are replaced with an income tax, and coverage is comprehensive, so choice loses its utility. Our system would join the rest of the developed world in ensuring universal access to care, at an affordable price, with no need to shop around for a deal.