Editorial: Bernie Sanders’ health plan DOA
For now, the “medicare for all” plan offered by Sen. Bernie Sanders is a harmless exercise in political posturing. There’s no chance of it becoming law as long as Republicans hold Congress and the White House.
So Democrats can afford to line up behind their socialist front man and declare themselves all-in for this latest universal health care proposal, as 15 senators have already done, without risking much.
And also without having to get into the pesky details of how to pay for the plan.
Sanders has his own unique formula for financing, which as usual relies heavily on soaking the rich. He’d raise income taxes on the upper middle class and wealthy, taking the top marginal rate to 52 percent from today’s 39.6 percent.
All employers would be hit with a 6.2 percent payroll tax. That would be a bargain for most of those who currently offer their employees health care policies, which are typically more costly than that levy, but would be a new burden on smaller businesses that don’t.
There are a variety of other confiscatory levies, including higher estate taxes.
And still, according to the Urban Institute, which analyzed the Sanders plan in May, the amount of new revenue the proposal would raise — $15.3 trillion from 2017 to 2026 — is barely half as much as will be needed to meet the $30 trillion the institute estimates universal coverage will cost.
At that price, instituting “Medicare for all” will nearly double the current $3.8 trillion federal budget. Sanders also claims his plan will produce as much as 40 percent in health care spending savings, but that claims is too fantastical to even take seriously.
Funding the true costs will require a broader tax base and higher taxes. Currently, nearly half of earners don’t pay federal income taxes. Should the Sanders plan be enacted, the nation wouldn’t have the luxury of such a generously progressive individual tax code.
European countries that Sanders and his ilk so envy for their health care policies tax the middle class and even lower income earners much heavier than does the United States.
Keep in mind, Congress has almost never adopted a health care program that operated anywhere close to its initial cost projections. That $30 trillion guess is bound to be much higher in reality.
Factor in the impact the higher tax rates will have on economic growth and this is an enormously expensive program.
But cost alone is not the only red flag. Sanders is also proposing strict price and fee controls on doctors, hospitals and drug companies. That will have a severe impact on quality and choice. Americans now used to getting pills on demand would have to accept the treatment limitations and deep government involvement in health care decision making common in countries that have adopted such plans.
We already know what that model would look like here. What Sanders is actually proposing is Medicaid for all rather than Medicare for all. Medicaid recipients struggle to find doctors who will take the plan, and don’t have access to the same quality of services. Again, there’s no chance the Sanders plan will go anywhere in the current Congress. But it is dangerous still in that it will distract from the essential work of getting a health care reform bill through Congress.
Obamacare can’t go on in its current form. Costs must be brought sharply under control, or new revenues raised. As we’ve seen from the failed summertime attempt to get a GOP-only fix in place, the solution will require a serious bipartisan effort. That job is made harder if Democrats are off indulging the fantasy of this Congress approving universal health care.