Why only the single payer model of Medicare for All will work
April 29, 2019
Topics: Quote of the Day
By Matt Bruenig
The New York Times, April 29, 2019
As the national debate about health care kicks off ahead of the 2020 presidential election, we’re going to be hearing a lot about the costs of increasingly popular progressive proposals to provide universal health care, like Bernie Sanders’s Medicare for All plan.
One common refrain on the right and the center-left alike: Since the rich can’t foot the bill alone, are middle- and working-class supporters of a more socialized health care system really ready to pay as much for it as people do in some of the high-tax nations that have one?
The problem is, we already do, and we often pay more.
It’s true that by conventional measures, taxes on workers’ wages in the United States are comparatively very low and even very progressive, affecting the lowest-earning workers the least and taxing those who can afford it more.
But these measures obscure an important fact of American life: Unlike workers in many other countries, the vast majority of American employees have private health insurance premiums deducted from their paychecks.
If we reimagine these premiums as taxes, we’d realize that Americans pay some of the highest and least progressive labor taxes in the developed world.
What this data shows is that lower-income workers, higher-income workers, single workers, and married workers with children all contribute around 40 percent of their pay toward taxes and health premiums. And when those health care costs are taken into account, the less well off no longer pay less than high-earners, as they do in taxes alone.
So, while opponents of comprehensive plans like Medicare for All claim those plans will greatly burden middle-class families, the truth is that we already have an unfair system. Middle-class workers in America are charged the same health insurance fees as upper-class workers despite the vast income differences between the two groups, and pay more of their earnings toward taxes and health care than workers in many wealthy countries.
For instance, according to this analysis, American families that earn around $43,000, half of the average wage, pay 37 percent of their wages to taxes and health care premiums. In high-tax Finland, the same type of family pays 23 percent of their compensation in labor taxes, which includes taxes they pay to support universal health care. In France, it’s 2 percent. In the United Kingdom and Canada, it is less than 0 percent after government benefits.
For instance, according to this analysis, American families that earn around $43,000, half of the average wage, pay 37 percent of their wages to taxes and health care premiums. In high-tax Finland, the same type of family pays 23 percent of their compensation in labor taxes, which includes taxes they pay to support universal health care. In France, it’s 2 percent. In the United Kingdom and Canada, it is less than 0 percent after government benefits.
Although the financing details of Medicare for All remain provisional at the moment, a RAND report on a more concrete single-payer proposal for New York State found that the plan would cut health care costs dramatically for the lowest income group, while increasing them by about 50 percent for the highest income group. Middle-class people would also experience net savings on health care equal to around 10 percent of their income, with only those earning 10 times the federal poverty line or above — that’s $134,000 for an individual or $276,000 for a family of four — paying more than they do now.
If we don’t move toward a European-style health program, we’ll remain stuck in a system where Americans, regardless of their incomes, pay ever larger amounts out of their paychecks to fund health care. The fact that we don’t call these payments “taxes” doesn’t change that fact, so it shouldn’t blind us to the best solutions.
If policymakers in America want to boost the fortunes of the middle class, and especially middle-class families with children, shifting the health insurance burden up the income ladder while bringing down overall health care costs, as Medicare for All would, is one of the surest ways to do that.
Matt Bruenig is the founder of People’s Policy Project, a think tank funded by small donors.
NYT Reader Comment:
By Don McCanne, M.D.
Matt Bruenig’s explanation of why progressive financing of health care is essential is precisely why we need the single payer model of Medicare for All (Jayapal, Sanders). Merely expanding the Affordable Care Act or adding a public option (even if mislabeled Medicare for All) leaves too great of a burden on working individuals and their families.
Comment:
By Don McCanne, M.D.
It’s simple. Read my brief comment above.
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About the Commentator, Don McCanne
Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.
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