Al Owski’s Reviews > Medicare for All: A Citizen's Guide > Status Update

“The Sanders approach to financing M4A bears many similarities in terms of the kitchen table budget. Families would save on insurance premiums and out-of-pocket costs; in exchange, they would pay a 4% income-based premium for M4A. Because private insurance is financed regressively, this change is likely to produce savings for middle-class and low-income families, while high-income families would likely pay more... ”

“In essence, employers would spend about the same under the Warren Medicare for All plan as they would spend in the status quo, and federal and state governments would shift their current healthcare spending into M4A. But nearly $11 trillion in healthcare costs would be shifted from American families onto large corporations and the wealthy.”

“M4A could also be financed through new progressive taxes that are not meant to replace existing healthcare spending but are designed to bring in money from new sources... a wealth tax on the richest Americans, raising the marginal income tax rate on the highest earners, reforming the corporate tax code, a financial transactions tax, taxing income from investments at the same rate as income from work... ”

“A reasonable policy goal would be to have any new taxes on middle-class or low-income families be lower than what these families currently pay for healthcare.”

“Family spending on premiums and out-of-pocket costs could be replaced by an income tax, a payroll tax, a Medicare for All premium (standardized or income-based to make it progressive)... options could be designed to be progressive, thereby saving money for the middle class and the poor.”

“Today, employers might send a portion of payroll each month to Aetna or Blue Cross to fund insurance premiums for workers. Under a Medicare for All payroll tax, employers would continue to send a portion of payroll each month to fund insurance for workers—but the check would be sent to Medicare.”

“But there are two basic elements likely to serve as the foundation to any M4A financing plan: repurposing existing public funds, and replacing private healthcare spending with progressive taxes. The primary way to pay for M4A is to use money the government is already spending on healthcare. The federal government already finances almost half the nation’s healthcare spending.”

“the federal government also spends a considerable sum of money subsidizing private health insurance, including subsidies on the ACA marketplace and the tax break for employer-based insurance. Indeed, in 2017 the federal government spent nearly $280 billion subsidizing employer insurance—the largest expenditure in the entire tax code, worth about $1,800 for each person with job-based coverage.”

“If national health spending stays about the same under M4A but we spend trillions less on administration, that means more total dollars will be spent on medical services: hospital care, physician services, nursing facilities, home healthcare, prescription drugs, and more. M4A does not starve the healthcare system of funds; instead, it redirects more of what we’re spending already into actual care.”

“This shift toward patient care is reflected in the ledger of the costs and savings under Medicare for All. One of the largest sources of savings under M4A is administrative efficiency: streamlining insurance overhead, and also reducing the administrative costs of providers. In contrast, virtually all the new costs under M4A represent new spending on clinical care... ”