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Bernie's ‘Medicare for All’ Would Cost $32.6 Trillion Over 10 Years, Study Says


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Let's have the government collect premiums for health insurance through a payroll deduction on a pre-income tax basis. We could even make it progressive so that as you earn more, you pay more taxes on each marginal dollar.

 

Seriously though. How will we pay for it is fucking simple. It's taxes. Just like with social security and roads and police and firefighters. Maybe we could bump the tax rate for investment/capital gains tax to be equal to the tax rates as regular income for starters.

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How We Think About the Deficit Is Mostly Wrong

 

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When the government spends more than it gets in taxes, a “deficit” is recorded on the government’s books. But that’s only half the story. A little double-entry bookkeeping paints the rest of the picture. Suppose the government spends $100 into the economy but collects just $90 in taxes, leaving behind an extra $10 for someone to hold. That extra $10 gets recorded as a surplus on someone else’s books. That means that the government’s -$10 is always matched by +$10 in some other part of the economy. There is no mismatch and no problem with things adding up. Balance sheets must balance, after all. The government’s deficit is always mirrored by an equivalent surplus in another part of the economy.

 

The problem is that policy makers are looking at this picture with one eye shut. They see the budget deficit, but they’re missing the matching surplus on the other side. And since many Americans are missing it, too, they end up applauding efforts to balance the budget, even though it would mean erasing the surplus in the private sector.

 

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26 minutes ago, Massdriver said:

On 2., it is a legitimate question and anyone that doesn't think so doesn't understand that this is several fold more than the unpaid for DoD increase.

 

How will we pay for something that's cheaper than what we're currently spending? If we as a people are already spending this money, why not use it more wisely?

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7 minutes ago, Ghost_MH said:

How will we pay for something that's cheaper than what we're currently spending? If we as a people are already spending this money, why not use it more wisely?

 

Is this report just assuming that employers would completely pocket what they're currently spending on insurance plans? Because if that's what they're doing...yeah. An obvious place to start would be to simply redirect the money employers are currently spending on insurance plans anyhow to the feds.

 

I'm not having luck finding an overall estimate of what employers are spending on health insurance premiums every year but as a starting point:


Annual premiums for employer-sponsored family health coverage reached $18,764 this year, up 3% from last year, with workers on average paying $5,714 towards the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Education Trust 2017 Employer Health Benefits Survey.

 

So let's call that an average of $13k per employee per year on the part of employers.

 

49% of American "family units" are on employer-provided health insurance plans.

 

Using a "family unit" of 3 (just a guess) 325 million people * 49% of families / 3 people per family ≈ 50 million. Times that by the $13k figure and you're looking at $650 billion per year just from the employer-paid portion of health insurance plans.

 

Obviously this isn't the most rigorous attempt at ballparking this but even if I'm off by a factor of 10 that's still a very significant portion of the new federal revenue that would be needed.

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The deficit in this case would be more than the typical increase in deficit. Deficits and debt do matter if they are large enough. If inflation kicked up, our interest payments will start to swallow the Federal budget and harm the economy. It is reasonable to be concerned about it and making sure we try to finance the government.

 

Assuming a land value tax was taken off the table, we could pay for this with:

 

1) Lifting the payroll tax cap to make it more progressive and raise revenue

2) Increasing payroll taxes by increasing the %

3) Adding a VAT

 

You would need substantial increases to make this happen. I realize the strategy is to rally behind a pure idea because it will get watered down later. I think the optimal plan is something that increases Federal spending a bit less than this proposal, results in more efficient healthcare in general, and still covers everyone. Cost controls are important and we need to get a handle on it since Medicare alone is going to swallow our budget up. Healthcare is also destroying private companies because premiums are going up 10%+ a year and it simply isn't sustainable.

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1 minute ago, Massdriver said:

The deficit in this case would be more than the typical increase in deficit. 

 

Assuming a land value tax was taken off the table, we could pay for this with:

 

1) Lift the payroll tax cap to make it more progressive and raise revenue

2) Increase payroll taxes by increasing the %

3) Adding a VAT

 

Companies could be taxed based on a calculation of how much companies are currently spending on giving their employers private insurance.  Say that on average across the nation, companies have chipped in $3000 per year per employee for heath insurance, then this should be the basis for the new Medicare tax. Individuals would still have to fund the system as well, whether that is through a payroll tax increase, income tax increase, or through premiums and copays, I'm not sure.

 

BUT if we go down this route, all other federal (and most state) healthcare agencies and programs need to be ended.  This includes VA healthcare, medicaid, CHIP, and others.  Hospitals, clinics, and doctors offices should remain privately run and administered.  Only the payments should be centralized. 

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17 minutes ago, mclumber1 said:

 

Companies could be taxed based on a calculation of how much companies are currently spending on giving their employers private insurance.  Say that on average across the nation, companies have chipped in $3000 per year per employee for heath insurance, then this should be the basis for the new Medicare tax. Individuals would still have to fund the system as well, whether that is through a payroll tax increase, income tax increase, or through premiums and copays, I'm not sure.

 

BUT if we go down this route, all other federal (and most state) healthcare agencies and programs need to be ended.  This includes VA healthcare, medicaid, CHIP, and others.  Hospitals, clinics, and doctors offices should remain privately run and administered.  Only the payments should be centralized. 

What about companies that are providing bare bones health insurance plans? Why should they be taxed less than a company that gives employees a very nice health insurance plan plus pay 50% of dependent coverage? If you're going to do some sort of formula, I would just make it the same per employee for any employers above 150 employees. Smaller companies should get some sort of break. 

 

For simplicity, it would be easier just to throw it on the payroll tax and having reasonable copays and deductibles. I agree that medicaid and chip should be eliminated. I'm not sure about the VA. I also wouldn't care if public hospitals and clinics existed along side private ones if it helped control costs. We pay far too much for healthcare in America and it isn't all just administrative. We pay more for the same thing.

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20 minutes ago, Massdriver said:

What about companies that are providing bare bones health insurance plans? Why should they be taxed less than a company that gives employees a very nice health insurance plan plus pay 50% of dependent coverage? If you're going to do some sort of formula, I would just make it the same per employee for any employers above 150 employees. Smaller companies should get some sort of break. 

 

For simplicity, it would be easier just to throw it on the payroll tax and having reasonable copays and deductibles. I agree that medicaid and chip should be eliminated. I'm not sure about the VA. I also wouldn't care if public hospitals and clinics existed along side private ones if it helped control costs. We pay far too much for healthcare in America and it isn't all just administrative. We pay more for the same thing.

 

Yeah, I guess I wasn't clear.  What I was trying to say is that all companies should pay the same amount in taxes based on what the average employer pays right now for employee insurance premiums.  So whether a company right now is offering a plan (such as a big tech company) or not (such as Burger King) they would see a $300 (or whatever) per month Medicare tax per employee. 

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2 minutes ago, mclumber1 said:

 

Yeah, I guess I wasn't clear.  What I was trying to say is that all companies should pay the same amount in taxes based on what the average employer pays right now for employee insurance premiums.  So whether a company right now is offering a plan (such as a big tech company) or not (such as Burger King) they would see a $300 (or whatever) per month Medicare tax per employee. 

That makes sense.

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A per employee tax by employers is the dumbest funding mechanism I've ever heard.

 

You're taxing companies for employing people. To minimize taxes....cut payroll, squeeze remaining employees, and make automation an even more attractive and cost effective option. Increase efficiency. Kill jobs. Politically stupid.

 

Just tack on x% to the corporate tax rate, in addition to capital gains taxes being increased, and employee payroll taxes increasing on a progressive scale (employee hike being less than corporate rate increase) and then increase top marginal rates.

 

If we're increasing taxes, and you still have to pay a fucking deductable, it's a worthless system, and dead politically. I can already hear it: if I'm still on the hook for some ivory tower decided "reasonable" deductible, how exactly is this a better system for the average person? Deductibles are probably the biggest reason people fucking hate the system we have now!

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18 minutes ago, b_m_b_m_b_m said:

A per employee tax by employers is the dumbest funding mechanism I've ever heard.

 

You're taxing companies for employing people. To minimize taxes....cut payroll, squeeze remaining employees, and make automation an even more attractive and cost effective option. Increase efficiency. Kill jobs. Politically stupid.

 

Just tack on x% to the corporate tax rate, in addition to capital gains taxes being increased, and employee payroll taxes increasing on a progressive scale (employee hike being less than corporate rate increase) and then increase top marginal rates.

 

If we're increasing taxes, and you still have to pay a fucking deductable, it's a worthless system, and dead politically. I can already hear it: if I'm still on the hook for some ivory tower decided "reasonable" deductible, how exactly is this a better system for the average person? Deductibles are probably the biggest reason people fucking hate the system we have now!

A payroll tax is a form of taxation on employing people. Employers get taxed for hiring people. I saw mclumber's idea as basically a payroll tax, and yes you're right, it isn't ideal, but it is convenient and employers are already having to pay for each employee's health insurance and are trying to minimize the payroll and taxes. As for your hatred of deductibles and copays, Switzerland and Japan both use them if I'm not mistaken. Singapore also used copays and coinsurance to control demand. It should lower the price tag and make healthcare spending more efficient.

 

 

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1 hour ago, Massdriver said:

A payroll tax is a form of taxation on employing people. Employers get taxed for hiring people. I saw mclumber's idea as basically a payroll tax, and yes you're right, it isn't ideal, but it is convenient and employers are already having to pay for each employee's health insurance and are trying to minimize the payroll and taxes. As for your hatred of deductibles and copays, Switzerland and Japan both use them if I'm not mistaken. Singapore also used copays and coinsurance to control demand. It should lower the price tag and make healthcare spending more efficient.

 

 

Just because they do it, doesn't mean we should. As a counterpoint, Canada largely doesn't have user fees, and is far cheaper than Switzerland, and health expenditures are growing at roughly the same rate.

 

Adding costs via copays and deductibles doesn't decrease demand for health care, it just prices the poor out.

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27 minutes ago, b_m_b_m_b_m said:

Just because they do it, doesn't mean we should. As a counterpoint, Canada largely doesn't have user fees, and is far cheaper than Switzerland, and health expenditures are growing at roughly the same rate.

 

Adding costs via copays and deductibles doesn't decrease demand for health care, it just prices the poor out.

I would need to see evidence that copays and deductibles only decrease demand by pricing the poor out. My guess is they also decrease demand from the middle class and I also would guess that they would cut unnecessary healthcare visits.

 

There are other ways to control costs, but I don't know if the U.S. has the stomach for it.  The government can step in and can further control the number of physicians and their pay, prevent expensive new equipment from being bought, negotiate drug prices down, etc. Some of this may require a public healthcare delivery system to stand next to our private one, or it could just mean a  lot more regulation.

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I think the point I have tried to convey but failed miserably at is Bernie's plan is unlike other universal systems around the world. The costs are greater. From Vox:

 

Quote

 

Eventually, though, they would all end up in the same plan, which includes an especially robust set of benefits. It would cover hospital visits, primary care, medical devices, lab services, maternity care, and prescription drugs as well as vision and dental benefits.

 

The plan is significantly more generous than the single-payer plans run by America’s peer countries. The Canadian health care system, for example, does not cover vision or dental care, prescription drugs, rehabilitative services, or home health services. Instead, two-thirds of Canadians take out private insurance policies to cover these benefits. The Netherlands has a similar set of benefits (it also excludes dental and vision care), as does Australia.

 

What’s more, the Sanders plan does not subject consumers to any out-of-pocket spending on health aside from prescriptions drugs. This means there would be no charge when you go to the doctor, no copayments when you visit the emergency room. All those services would be covered fully by the universal Medicare plan.

 

This too is out of line with international single-payer systems, which often require some payment for seeking most services. Taiwan’s single-payer system charges patients when they visit the doctor or the hospital (although it includes an exemption for low-income patients). In Australia, people pay 15 percent of the cost of their visit with any specialty doctor.

 

The Sanders plan is more generous than the plans Americans currently receive at work too. Most employer-sponsored plans last year had a deductible of more than $1,000. It is more generous than the current Medicare program, which covers Americans over 65 and has seniors pay 20 percent of their doctor visit costs even after they meet their deductibles.

 

Medicare, employer coverage, and these other countries show that nearly every insurance scheme we’re familiar with covers a smaller set of benefits with more out-of-pocket spending on the part of citizens. Private insurance plans often spring up to fill these gaps (in Canada, for example, vision and dental insurance is often sponsored by employers, much like in the United States).

 

The reason they went this way is clear: It’s cheaper to run a health plan with fewer benefits. The plan Sanders proposes has no analogue among the single-payer systems that currently exist. By covering a more comprehensive set of benefits and asking no cost sharing of enrollees, it is likely to cost the government significantly more than programs other countries have adopted.

 

https://www.vox.com/policy-and-politics/2017/9/13/16296656/bernie-sanders-single-payer

In the past, everyone used other developed countries as examples as to why America can do better on healthcare. I'm merely using the same evidence to show that Bernie's plan really is different than other nations and there is nothing wrong with suggesting we should slim it down at some point.

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On 7/30/2018 at 1:33 PM, mclumber1 said:

Doesn't Bernie's plan cover everything including dental and vision?  If so, that's dumb.  Just include actual healthcare.  Leave the periphery services like dental and vision to the private market and insurance. 

1

 

What happens when an untreated tooth infection caused by not being able to afford a root canal or having impacted wisdom teeth removed damages someone's heart? Does the "actual health care" just treat the symptoms of the damaged heart or does it also take care of the tooth?

 

Dental and vision should absolutely be covered under "actual health care", it's odd to assert that it shouldn't be.  #smilesmatter

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1 hour ago, Massdriver said:

I would need to see evidence that copays and deductibles only decrease demand by pricing the poor out. My guess is they also decrease demand from the middle class and I also would guess that they would cut unnecessary healthcare visits.

 

There are other ways to control costs, but I don't know if the U.S. has the stomach for it.  The government can step in and can further control the number of physicians and their pay, prevent expensive new equipment from being bought, negotiate drug prices down, etc. Some of this may require a public healthcare delivery system to stand next to our private one, or it could just mean a  lot more regulation.

It prices out the middle class as well, just to a lesser degree. Remember, 2% of the population of the US lives on less than $5.50 a day.

 

 

Ultimately, so what if other countries do or do not charge deductibles and copays? It doesn't mean it's right. 

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Dental and eye care aren't expensive and likely reduce Healthcare costs overall as good teeth is important to good health. As it is dental plans mostly just cover cleanings and x-rays anyways, which if you are doing you shouldn't need major work. The idea an insurance company won't cover a couple hundred for a filling, then pay out thousands later when they have a heart attack from a tooth infection is stupid. 

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25 minutes ago, PaladinSolo said:

Dental and eye care aren't expensive and likely reduce Healthcare costs overall as good teeth is important to good health. As it is dental plans mostly just cover cleanings and x-rays anyways, which if you are doing you shouldn't need major work. The idea an insurance company won't cover a couple hundred for a filling, then pay out thousands later when they have a heart attack from a tooth infection is stupid. 

 

Bingo.

I mean: https://www.health.harvard.edu/diseases-and-conditions/gum-disease-and-the-connection-to-heart-disease

 

The actor who played "Lorne" (the green singing demon guy) on the show Angel (Buffy the Vampire Slayer) infamously died due to complications from a tooth infection which wasn't treated in time that destroyed his heart. Like, purely cosmetic and unnecessary nonsense shouldn't be covered (ie: teeth whitening) unless there's a medical need/reason.

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Why not a progressive deductible/coinsurance based on income? Higher your income the higher your deductible and coinsurance (that caps out at 20% and $2,000 with a $10k max out of pocket). Employers can either fund HSAs or Supplemental Insurance. Participation fees (deductible, coinsurance, oop) gradually introduce at 5x Federal Poverty Level. 

 

I've got no objection to any system so long as it's got a robust appeal system (leave State Insurance Commissions in place as an appeal option), a 24/7 Consumer Direct Long Term Care system, and protections for Big Pharma that successfully bring to market treatments for rare conditions. 

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37 minutes ago, b_m_b_m_b_m said:

It prices out the middle class as well, just to a lesser degree. Remember, 2% of the population of the US lives on less than $5.50 a day.

 

 

Ultimately, so what if other countries do or do not charge deductibles and copays? It doesn't mean it's right. 

It also makes everyone think about going to seek care or not. The poor can be helped with programs targeted at the poor. What other countries do matters in so far as them creating a successful healthcare program. The more expensive a single payer plan is, the harder it will be to maintain and sell to the public. The end result will not be a Bernie plan. The end result will be something more like I have proposed, and cost will enter the picture.

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38 minutes ago, PaladinSolo said:

Dental and eye care aren't expensive and likely reduce Healthcare costs overall as good teeth is important to good health. As it is dental plans mostly just cover cleanings and x-rays anyways, which if you are doing you shouldn't need major work. The idea an insurance company won't cover a couple hundred for a filling, then pay out thousands later when they have a heart attack from a tooth infection is stupid. 

Reduce it more than the dental and eye premiums would cost the government? I don't think that's the case, but if you want to provide evidence that it would go for it. 

 

4 minutes ago, Jwheel86 said:

Why not a progressive deductible/coinsurance based on income? Higher your income the higher your deductible and coinsurance (that caps out at 20% and $2,000 with a $10k max out of pocket). Employers can either fund HSAs or Supplemental Insurance. Participation fees (deductible, coinsurance, oop) gradually introduce at 5x Federal Poverty Level. 

 

I've got no objection to any system so long as it's got a robust appeal system (leave State Insurance Commissions in place as an appeal option), a 27/7 Consumer Direct Long Term Care system, and protections for Big Pharma that successfully bring to market treatments for rare conditions. 

I would be open to this, but I think for most here it is Bernie or bust.

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28 minutes ago, Massdriver said:

I would be open to this, but I think for most here it is Bernie or bust.

 

I don't want to speak for people here, but I do think it's worth pointing out that Bernie's plan is pretty far from the Democratic party platform on the subject, which supports a public option. While Medicare for all is increasingly gaining traction, a public option is very popular.

 

You're quite right to point out that Bernie's plan is an outlier. Even when other supporters of Medicare for All talk about it, I don't think they're specifically talking about something as extreme as what Bernie suggests.

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51 minutes ago, Massdriver said:

Reduce it more than the dental and eye premiums would cost the government? I don't think that's the case, but if you want to provide evidence that it would go for it. 

 

 

How much does removing dental/vision save taxpayers? How much would it cost an individual to seek out dental/vision on their own?

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1 hour ago, PaladinSolo said:

Dental and eye care aren't expensive and likely reduce Healthcare costs overall as good teeth is important to good health. As it is dental plans mostly just cover cleanings and x-rays anyways, which if you are doing you shouldn't need major work. The idea an insurance company won't cover a couple hundred for a filling, then pay out thousands later when they have a heart attack from a tooth infection is stupid. 

 

yep.  it's maddening to see people say dental shouldn't be included.

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1 hour ago, PaladinSolo said:

I'd be fine with co-pays for dental and vision, as long as they are still included, both are very basic maintenance care that could save a lot of money and lives.

 

I thought the argument was about including them at all - of course there should be co-pays, no problem with that.

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Just now, Spork3245 said:

 

I thought the argument was about including them at all - of course there should be co-pays, no problem with that.

The argument is about whatever we want it to be. I think there is an argument to be made that we should focus just on medical care and leave the rest to private companies, but I think dental care is really important too.

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2 hours ago, Massdriver said:

It also makes everyone think about going to seek care or not. The poor can be helped with programs targeted at the poor. What other countries do matters in so far as them creating a successful healthcare program. The more expensive a single payer plan is, the harder it will be to maintain and sell to the public. The end result will not be a Bernie plan. The end result will be something more like I have proposed, and cost will enter the picture.

So the working and middle classes gets a tax hike and the "undeserving poor" (in the eyes of many working and middle class people) continue to live high on the hog and get severely subsidized health care? What working or middle class person would get a tax increase and still be ok with being on the hook for a """reasonable""" deductible? What do they get out of it, besides yet another expensive program for lazy poor that they get nothing from? 

 

Maybe the end result looks something like what you are proposing. But you fall for the trap that Democrats have for years: starting from watered down shit, and continue to water it down.

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Dental insurance is waaaaay less expensive than medical insurance.  I think I pay around $15 a month total for dental and vision for my family, which includes 2 teeth cleanings and exams for each person, annual eye exams, and 2 pairs of glasses each year.  Yeah there are limits and copays (my filling cost me $60 I think) but it's definitely a lot less expensive compared to my health insurance, which stands at several hundred dollars each paycheck plus what my employer kicks in. 

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7 minutes ago, b_m_b_m_b_m said:

So the working and middle classes gets a tax hike and the "undeserving poor" (in the eyes of many working and middle class people) continue to live high on the hog and get severely subsidized health care? What working or middle class person would get a tax increase and still be ok with being on the hook for a """reasonable""" deductible? What do they get out of it, besides yet another expensive program for lazy poor that they get nothing from? 

 

Maybe the end result looks something like what you are proposing. But you fall for the trap that Democrats have for years: starting from watered down shit, and continue to water it down.

I am not advocating where to start or a poltical strategy. I am telling you what I think should be policy. 

 

As for the working middle class, I imagine that the government policy would be far better than what most working people get now.  

 

Edit: I also think you can raise some of the revenue in a progressive way. 

 

 

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