On Jan. 17, just a few hours before the fourth Democratic Debate, Presidential candidate Senator Bernie Sanders released details of his universal health care through a Medicare for All system.
As a fundamental part of his message, he asserts his beliefs that healthcare should be a right and that no one should go bankrupt from receiving medical care. As a result, his fairly detailed proposal to achieve universal healthcare coverage through a single-payer system is a large accomplishment towards showing the legitimacy of his policy position.
The plan comes with the promise of no deductible and no copays, making it free to receive care from your doctor. This plan is paid for through new taxes on all Americans. Despite the new taxes, the elimination of private health care premiums would result in net-savings for most Americans.
The example the Sanders campaign gives is of a family making $50,000 a year. Under his Medicare for All plan, they’d have a tax burden of just $466 a year resulting in net-savings of almost $6000.
Projections predict that his plan will save the United States $6 trillion in healthcare costs over the next decade. His plan costs an estimated $1.38 trillion a year and is paid for by several tax increases and alterations to the current tax code.
Tax increases are a necessity to fully pay for the plan. Under the current proposal, employers would pay a 6.2% income-based tax and employees would pay a 2.2% income-based tax. This income-based tax would raise an estimated $630 billion a year.
For most employees and employers, this would be a smaller expense in comparison to the employer contributions made to employee health plans under the current system. In addition to this, the income tax would be altered to add more brackets for higher amounts of income.
This change to the income tax would raise an additional $110 billion a year. Sanders also plans to tax capital gains and dividends at the same rates as income. This would result in raising an additional $92 billion a year. His plan would also make certain health care related tax breaks and subsidies obsolete which would result in raising $310 billion in revenue a year.
All told, Senator Sanders’ plan is ambitious and it is unlikely that in the current political environment that he would be able to see it passed without alterations.
However, this plan may lay the groundwork for other health care reform leading to universal coverage and a reduction in overall health expenditures.
The benefit to achieving universal coverage in the form of a tax-funded single payer system is that employees could more fluidly move between jobs without worrying about health care benefits lapsing or losing their current level of care.
It could also encourage more people to start their own small businesses because they would no longer have to worry about health insurance. People would also be able to get the healthcare they need without fear of going bankrupt.
In fact, over 60% of bankruptcies are related to medical debt and of those, nearly 78% had health insurance. This is a sad statistic and reflects the state of our healthcare system, which causes people to declare bankruptcy despite having health insurance.
Removing the corporate middle man and making healthcare a not-for-profit, general welfare institution would be a major step forward in improving the quality of life for average Americans.