The Middle-Class Cost of Medicare for All
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
The concept of "Medicare for All" is getting a lot of attention in the 2020 presidential race. Senator Elizabeth Warren’s promise that it will not cost the middle-class "one penny" has much appeal.
While most Americans support providing free medical care to those who need it most, not imposing an additional cost on the middle class has never been accomplished by any country that has universal health care. The middle class in those countries pay income taxes of up to 40% and a national sales tax equivalent to 15% to 25% of income.
Recently, Senator Warren revealed how she will finance her plan. She estimates the cost over a decade at $20 trillion in new federal spending. Estimates by six independent financial organizations are higher, ranging from $28 trillion to $36 trillion.
Here are some of the general provisions of her plan:
- She would tax both employers and employees an amount equivalent to what they currently pay in health insurance premiums. This will bring in $11 trillion.
- She would increase taxes on the top 1% of individuals and large corporations to generate $7 trillion.
- The balance of the money needed, $2 to $18 trillion (depending on whether you believe Ms. Warren’s numbers or the other six independent estimates) would come from new-found efficiencies, tax enforcement, and reductions in wasteful spending.There is widespread doubt that this is even remotely possible.