Healthcare is a hot topic in the United States, and presidential hopeful Bernie Sanders has made Medicare for All a cornerstone of his campaign. One big question on everyone’s minds is how Sanders plans to fund this ambitious plan. In this article, we will explore the various ways that Sanders plans to pay for Medicare for All.
The Cost of Medicare for All
Before we delve into the funding sources, let’s first take a look at the projected cost of Medicare for All. According to a study published in the Annals of Internal Medicine, Medicare for All would cost the federal government $32 trillion over ten years. This may sound like an astronomical figure, but it is actually less than what the current system is projected to cost over the same time period.
Savings from Reduced Administrative Costs
Under the current system, healthcare providers spend a significant amount of time and money on administrative tasks like billing and claims processing. Medicare for All would dramatically reduce these costs by eliminating the need for multiple insurance plans and administrative staff. According to a report from the Political Economy Research Institute, administrative savings from Medicare for All could total as much as $507 billion per year.
Savings from Negotiated Prescription Drug Prices
The United States pays significantly more for prescription drugs than other countries with universal healthcare systems. Medicare for All would allow the government to negotiate directly with drug companies for lower prices. According to the Congressional Budget Office, this could save the federal government as much as $450 billion over ten years.
New Taxes on the Wealthy
While Medicare for All would generate significant cost savings, it would still require additional funding. Sanders has proposed several ways to generate this revenue, including new taxes on the wealthy. His plan would create a new marginal tax rate of 70% on income over $10 million, which is estimated to generate $720 billion over ten years.
Increased Payroll Taxes
Sanders has also proposed an increase in the payroll tax to fund Medicare for All. Currently, employees and employers split the cost of the payroll tax to fund Medicare, which is 1.45% of their respective incomes. Under Medicare for All, this would increase to 4% for employers and 4% for employees. However, this would be offset by the elimination of premiums and deductibles, which could save the average family $2,400 per year.
A Wealth Tax
Another proposal put forth by Sanders is a wealth tax on the top 0.1% of earners in the United States. This would apply to households with a net worth of more than $32 million and would begin at a rate of 1%. Sanders estimates that this tax would raise $4.35 trillion over ten years.
Reduced Military Spending
The United States currently spends more on its military than the next seven countries combined. Sanders has proposed reducing military spending by 5% to help fund Medicare for All. This would generate approximately $200 billion over ten years.
Medicare for All is an ambitious plan that would provide healthcare coverage to all Americans. While the cost of the plan is significant, there are several ways that Sanders plans to fund it, including reduced administrative costs, negotiated prescription drug prices, new taxes on the wealthy and a wealth tax. By exploring these funding sources, we can begin to see how Medicare for All can become a reality.
FAQs: How Will Sanders Pay for Medicare for All?
Q: Will Medicare for All increase taxes for the middle class?
A: While taxes will increase for some, the elimination of premiums and deductibles could save the average family thousands of dollars per year.
Q: How will Medicare for All affect healthcare providers?
A: Providers may see reduced administrative costs, but they will also see a reduction in reimbursement rates.
Q: Has any other country successfully implemented a similar healthcare system?
A: Yes, several countries including Canada and the United Kingdom have successfully implemented universal healthcare systems.
Q: How will Medicare for All affect the federal deficit?
A: While the plan will be expensive, the cost savings from reduced administrative costs and negotiated prescription drug prices could offset a significant portion of the cost.
- “The Financial Case for Medicare for All.” Political Economy Research Institute, University of Massachusetts Amherst, 30 Nov. 2018.
- “How Much Will Medicare for All Cost You?” NPR, 16 Apr. 2019.
- “How Would Bernie Sanders Pay for His Big Health Plan?” The New York Times, 19 Sep. 2017.
- “Medicare for All Act of 2019.” Congress.gov.
- “Options for Reducing the Deficit: 2019 to 2028.” Congressional Budget Office, 3 Dec. 2018.