Medicare for All - what would it cost?

[stopbush]

Now that discussion of Medicare for All has been revived and is trending, Dems need to draw up plans that present an honest cost/benefit analysis to the American people.

Medicare is currently paid for by taxing 100% of people working in the US. Those tax dollars are barely enough to cover seniors on Medicare, who account for roughly only 19% of the population.

So the question is: how much would payroll taxes need to increase to cover 100% of the population as opposed to the current 19%? The current tax rate is 1.45% for the employee and 1.45% for the employer, or a 2.9% total. When it comes to the percentage of the population now covered v the percentage to be covered, 19% divides into 100% 5 times, so one assumes that one would need to raise the payroll tax five-fold to cover 100% of the population. That would mean that the employee would pay a tax of 7.25% as would the employer, equaling a tax of 14.5%.

Add into this the fact that current Medicare recipients pay monthly premiums of $109 on average, or $1308 a year.

So do the math: if you earn $50,000 a year, your Medicare tax would be $3625 at 7.25%. Add in your premiums of $1308, and you're paying just under $5,000 a year per working person for Medicare for All. Sounds good.

But what if you are a family with a spouse who doesn't work and two young children who don't work? How are they covered in the Medicare for All scenario? Surely, there would be additional premium cost involved. They can't be covered free of charge. That $5000 per year mentioned above covers ONE working person, not their family members. Even if you waive the payroll tax deduction and charge only the average monthly premium per person (as Medicare currently does), you are looking at an additional $3900 per year to cover a non-working spouse and two children. That makes your cost around $9000 per year, and that is equal to 18% of that $50,000 income you are earning (perhaps the Feds could step in and underwrite the cost of covering a non-working spouse and two kids. Sorta doubt it, but maybe.).

And, to cover all bases, let's not forget that you are currently paying 6.2% of your income in Social Security taxes. Add that into the mix, and your combined Medicare for All and SS expenses for that family of 4 with one bread winner described above would be over 25% of your income.

That's still a bargain when compared to the taxes paid in European nations, and it's the true cost of having a truly socialistic approach to things. It is what it is. Let's not downplay the realities involved.

I don't have the answers. I do know that while Medicare for All might well be the best and fairest approach we could take toward universal healthcare, it comes with real expenses and real costs to real people.

So I ask: what do you think it would cost to provide Medicare for All? What other revenue sources outside of the current payroll taxes and monthly premiums that are currently collected to fund Medicare could be tapped to add to the $ funding the program?

If we are going to seriously try to enact Medicare for All, then we need to have real number disclosed in the plan, just like the ACA had real numbers. We cannot act like Rs, promising something great for nothing, only to have no real cost-analysis in place to let people know what it will cost them. We need to be honest and put the numbers out there. Again, let's have the discussion about what the real costs are for enacting socialistic program. My belief is that once people understand the trade offs (lower overall costs per patient, better services, higher taxes v high premiums and deductibles), they will be more than happy to accept the trade offs.

Comments?

[Turbineguy]

1. The tax would have to go up.

Offset by not paying for medical insurance.

[Fast Walker 52]

3. which is what Bernie said, but of course the MSM presented it only as a higher tax

it does end up saving money overall, for most people

[Turbineguy]

9. Well that's how the repubs would characterize it.

When they talk about cutting taxes they leave out the resulting increase somewhere else. And since they invariably cut taxes to privatize services the end cost actually goes up. By inundating people with self-congratulation they hope to smother the truth.

[Fast Walker 52]

20. yeah, the MSM typically follows the Republican lead

that seems to be changing with Trump's craziness

[stopbush]

10. The Dems made a HUGE mistake by not selling the good Obamacare did for

people who get their insurance through their employer. By speaking almost exclusively about all of the poor people who were added to the rolls via Medicaid and the middle class patients who didn't have employer-provided insurance and who got subsidies to purchase on the exchanges, the benefits to the vast majority of Americans got buried.

That allowed the Rs to portray Obamacare as a program that benefitted "those lazy people who won't get a steady job," implying that these others were taking money out of the pockets of the 155-million who have insurance through their employer. Most people are going to be against an expensive program if they think it benefits a select few. They need to realize that it helps them just as much as the person on Medicaid.

[Fast Walker 52]

18. they were terrible on selling the ACA, I agree. They were WAY too defensive.

It's actually such a good law once you understand everything it did.

[stuffmatters]

30. Ignoring the middle class in all their "pitches" constantly a Dem failure

Completely agree the Dems seem determined to sell themselves and their policies as though only a small segment of the population benefits. With Medicaid squarely in the headlights, Dems couldn't even repeatedly educate that Medicaid provides the nursing home care that most American will need for their parents and THEMSELVES someday. And most frustratingly, as you mention, Trumpcare, , would have hobbled the 155M employees via employer insurance programs as well. Yet that massive,powerful message was absent.

Dem politicians seem to have a hard time emphasizing how our politics and policies benefits the whole "forest" for their fixation on a smaller fraction of "trees". Sure we fight like hell for the more vulnerable and less empowered, but we are the majority party demographically for this whole country.

Dem messaging has been terrible for a long time.. eg.they still say fighting for "regulations" to companies rather than preserving "protections" for the lives of all Americans.

Maybe the new leadership at the DNC could spend s little money and hire a professional "framer" to teach regularly our Dem politicians how to effectively frame and message and stop this frustrating ineptitude.

.

[stopbush]

7. Yes. The questions are

1. How much would taxes have to go up, and

2. How much is the offset from not having to pay high insurance premiums?

My feeling is that the more money one saves in the deal, the easier the sell, and the better the reality. Americans' aversion to paying taxes even when it helps them directly will be a major hurdle in getting people to accept any increase, let alone getting ideologically opposed Rs tongo along with such an increase.

[elleng]

2. 'CHEAP,' as costs of insurance companies are ELIMINATED!

Some real numbers crunchers could do a good job to answer your question, I'm sure.

[Heartstrings]

4. Just an FYI....

As of 1-1-2017 Medicare premiums rose to $135.00 per month for any one turning 65 after that date. Those who were 65 before 1-1-2017 are "grandfathered" with only a $2.00 premium increase.

[stopbush]

8. Yes. My number was the average based on 2015 data.

[ismnotwasm]

5. I believe It would need to be done over time

One of the reason I support the ACA is because it opened the door to the ultimate goal--universal healthcare. A public option--whatever that looks like, as there a different ways to approach it, is the simplest way to get there. Medicare is a huge complex system, intertwined with private insurances-- with many rules. In order to apply it to all, it takes more than just "expanding". If the healthy young, who are making less money to live on, object to paying taxes for the chronically ill or old, we have a problem. We see this already with the ACA.

[Heartstrings]

6. Also worthy of mentioning

is the revenue from all other programs such as VA, Medicaid, etc., would be pooled into the fund. Not a huge amount but, hey, everything counts.

[OneBlueDotBama]

11. Toss in the fine work from the NAS

The NAS, National Academy of Sciences, that speaks to the cost to the US and the GDP due to the uninsured. It's not pocket change, it's billions.

This is from 2003, I'm sure the numbers are higher, but plateaued after the ACA was implemented.

FOR IMMEDIATE RELEASE

U.S. Loses up to $130 Billion Annually as Result of Poor Health, Early Death Due to Lack of Insurance

WASHINGTON -- The value of what the United States loses because of the poorer health and earlier death experienced by the 41 million Americans who lack health insurance is estimated to be $65 billion to $130 billion every year, according to a first-ever economic analysis of the costs of uninsurance for society overall. This lost value is a hidden cost that could be recouped by extending health coverage to all, says a new report from the Institute of Medicine of the National Academies.

http://www8.nationalacademies.org/onpinews/newsitem.aspx?recordid=10719

[FloridaBlues]

12. I believe most people pay $202.00 per month not 109.00

Plus another 200 for secondary insurance
The longer people wait to sign up after age 65 it payment goes up.

[PoindexterOglethorpe]

13. I suspect that at present, the majority

of those on Medicare are only paying the $104/month and are grandfathered in.

And not everyone pays additional for secondary insurance. I have an Advantage Plan which takes the $104 and covers everything Medicare A&B cover plus some. And other supplemental plans can be a lot less than $200/month.

However, if we do get a Single Payer system (Medicare for All) will probably cover certain basics and supplemental plans will be available for purchase. Nonetheless, such a system will be cheaper in the long run than our current system.

[trof]

21. I'm 76. I pay $110/mo. for Medicare, PLUS...

$27/mo. for prescription drugs after a $400 deductible.
$140/mo. for supplemental 'medigap' policy.

[csziggy]

14. The average cost of medical care per American is over $10,000

$10,345 per person: U.S. health care spending reaches new peak
BY Ricardo Alonso-Zaldivar, Associated Press July 13, 2016 at 6:20 PM EDT

WASHINGTON — The nation’s health care tab this year is expected to surpass $10,000 per person for the first time, the government said Wednesday. The new peak means the Obama administration will pass the problem of high health care costs on to its successor.

The report from number crunchers at the Department of Health and Human Services projects that health care spending will grow at a faster rate than the national economy over the coming decade. That squeezes the ability of federal and state governments, not to mention employers and average citizens, to pay.

Growth is projected to average 5.8 percent from 2015 to 2025, below the pace before the 2007-2009 economic recession but faster than in recent years that saw health care spending moving in step with modest economic growth.

National health expenditures will hit $3.35 trillion this year, which works out to $10,345 for every man, woman and child. The annual increase of 4.8 percent for 2016 is lower than the forecast for the rest of the decade.

http://www.pbs.org/newshour/rundown/new-peak-us-health-care-spending-10345-per-person/

If we could take out the for profit insurance industry, and reduce the profits for hospitals, medical devices and drups we could reduce that amount.

[thecrow]

15. Mind the Gap...

Medicare only pays for 80% of medical costs. This is ok if you are rich enough to cover it, but what about that family with one working spouse and two kids?
It's all fun and good until someone gets really sick. My dad had two bypass operations, each costing well over $100K. Fortunately they had great insurance, but it would have been devastating for a young couple with not much to spare.

I have Medigap insurance, which runs another hundred or so per month in addition to the 105 taken out of my SocSecurity... and then of course, there are still copays and prescription costs. But the SS isn't enough to live on, and the medical costs are still going up.

[stopbush]

16. Execellent points. We need to address all of these facets head on.

Too many Dems believe that Medicare for All will be a FREE program that will provide 100% coverage of everything, paid for by taxing the wealthy. Or maybe not even paid by anyone because it's "a right."

[jeffreyi]

17. A tiny fraction

Of what all the recent wars have cost.

[stopbush]

19. That's a bad argument, because it links the affordability of universal healthcare

to our ability to stay out of wars, which is never going to happen.

[dawg]

22. It would be very expensive. More so than what you are considering.

Medicare is heavily subsidized from general revenues. The Medicare taxes and premiums that people currently pay are not enough to pay for the whole program.

Some expensive things are worth it, though.

[stopbush]

23. Agreed. I'm trying to get a conversation started.

I ran some numbers during the primaries and figured that Americans would need to pay out 43% of their salaries in taxes to have the kind of universal healthcare other countries enjoy plus SS benefits. That would be in line with many European countries, BTW.

[dawg]

24. It would probably be cheaper in the long-run, but getting there is the hard part.

I think we do it by offering a "patch" to the ACA.

We offer a public option, but only in counties that have limited competition from private insurers. Only one insurer, or (gasp) none? Public option goes in.

From there, we have our foot in the door. And if we are able to run the public option cheaper than the private insurers, expanding it nationwide would be the logical next step when it comes time to try and wring more costs out of the system.

[stopbush]

25. The big savings that seldom get mentioned come in the form of

preventative care. People avoid seeing doctors for years, not because they fear bad health news, but that they fear getting bad health news with a huge price tag attached. Of course, the longer they avoid seeing a doctor, the more potential there is for a health catastrophe.

How many heart attacks etc could be avoided if people were diagnosed with having potential to get sick and were treated with medications, exercise plans, lifestyle changing regimes etc?

If a doctor visit is affordable or even cheap, people will take care of themselves.

[vlyons]

26. medicare and social security taxes should be progressive taxes

which would mean raising the caps on the wealthiest individuals. take the for-profit insurance companies completely out of the healthcare business. Americans pay about $900 a year for the administrative costs of insurance companies that add no healthcare values or services at all. Perhaps allowing for-profit insurance companies to sell a bundle policy that included auto/home/healthcare insurance, provided the healthcare insurance was as good as medicare for all. Plus cutting the Dept of Defense budget should also help a lot too..

[PoliticAverse]

27. Note that only about 38% of Medicare expenditures come from payroll taxes.

And about 13% from Medicare premiums.

[Hoyt]

28. Did you add in amounts for cover uninsured? Whatever it costs,

we need to do it. But it's going to cost a lot more than most expect.

[vlyons]

29. Medicare for All campaign

There's a web site for the Medicare for All campaign which has not yet started. But you can get on their mail list to get notifications from/about the campaign.

http://www.medicareforall.org/pages/Home