Historic tax hikes.
A study by the Mercatus Center at George Mason University predicted that Sen. Bernie Sanders’ “Medicare for All” plan will cost $32.6 trillion over ten years.
One more thing — this is a “conservative” estimate, which means the cost could be a lot higher.
The Plan Includes Historic Tax Hikes
Fox News reported:
The hikes would allow the government to replace what employers and consumers currently pay for health care — delivering significant savings on administration and drug costs, but increased demand for care that would drive up spending, according to the report.
According to the report, the legislation’s federal health care commitments would reach approximately 10.7 of GDP by 2022, and rise to nearly 12.7 percent of GDP by 2031.
But the study, conducted by senior research strategist Charles Blahous, said that those estimates were on the “conservative” side.
The study found that the government would have to raise taxes like never before because even “doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”
- First and foremost, the federal government would become responsible for financing nearly all current national health spending, including individual private insurance and state spending.
- M4A would increase federal health spending on the currently uninsured as well as those who now carry insurance by providing first-dollar coverage of their healthcare expenditures across the board, without deductibles or copayments.
- M4A would expand the range of services covered by federal insurance (for example, dental, vision, and hearing benefits).
- M4A would dramatically expand the demand for healthcare services, consistent with economics research findings that the more of an individual’s health costs are covered by insurance, the more services they tend to buy, irrespective of the services’ efficacy and value.
Sanders has never conducted a cost analysis and criticized this one:
But Sanders blasted the analysis as “grossly misleading and biased,” noting that the Mercatus Center receives funding from the conservative Koch brothers. Koch Industries CEO Charles Koch is on the center’s board.
“If every major country on earth can guarantee health care to all, and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States cannot do the same,” Sanders said in a statement. “This grossly misleading and biased report is the Koch brothers’ response to the growing support in our country for a ‘Medicare for all’ program.”
A spokesman for Sanders said that the senator’s office has not done a cost analysis on the new plan, however the estimates in the latest report are within the range for other cost projections for Sanders’ 2016 plan.
Or maybe the socialist should just accept that Medicare For All would only work on that fantasy island of his where money grows on trees.
States Turned Away From Single Payer When Confronted With Cost
The Washington Examiner mentioned a few states who cheered for this plan, but now that reality has slapped them in the face, officials have started to back away. This includes Vermont, the state Sanders hails from, which developed single-payer in 2011:
Vermont made the mistake of adopting an extraordinarily costly overhaul of the entire healthcare system without waiting for a fiscal estimate or establishing exactly how the state would pay for it. When the estimates came in, they were stratospheric. In a wealthy state with the second-lowest uninsured rate in the country (3.7 percent, compared to a national average of 8.8 percent), the state’s own estimates concluded that single-payer would require a near-doubling of the state’s budget.
Vermont hoped to use federal funding for half of this cost, but to cover its share, taxes would have to go up — a lot. Payroll taxes would have had to rise by 11.5 percentage points. Individual income tax rates could go up by as much as 9 percentage points. Shumlin scrapped the plan, concluding that it would be “unwise and untenable.”
California introduced Healthy California in 2017, but the state’s House leadership pulled it “with the speaker expressing concern that the proposal was too expensive, lacked appropriate funding mechanisms and wasn’t ready for primetime.” California only has a $201 billion budget:
He was right about how expensive it was. The state’s estimates pegged the cost at $400 billion per year, twice the state’s budget. An outside report commissioned by an advocacy group rejected the estimates of the nonpartisan legislative office, concluding that the plan would cost a mere $331 billion.
Colorado had a similar problem:
Voters in Colorado arrived at much the same conclusion when single-payer healthcare went on the ballot in 2016. The price tag (which was arguably low-balled) was enough to tax income at rates as high as 14.63 percent, more than triple the state’s current flat income tax rate.
The electorate balked at the costs. They may have been concerned about the details, too, as it vested authority to adjust benefits and even change tax rates with a board of largely unaccountable trustees. No one operates under the illusion that private insurance is a panacea in this regard, but at least people have options and avenues of appeal. Single-payer strips that away; the government provides what it chooses to provide. In Colorado, that proved a potent concern.
On Election Day, the constitutional amendment establishing ColoradoCare met a crushing defeat, rejected by an astonishing 79 percent of voters.
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