In the fall of 2017, when Sen. Bernie Sanders (I-Vermont) unveiled his vision for the future of the U.S. healthcare system (Medicare for All), I wrote a piece for the Center for Vision and Values titled, “Medicare for All is Good for None.” In the piece, I argued that using the Medicare template as a model capable of absorbing quadruple the number of current enrollees was flawed from the start. Obviously, Senator Sanders did not read my piece.
Now, in the fall of 2018, Medicare for All has become the litmus test for the early field of potential Democratic presidential nominees and a key policy platform among Progressives. In addition, a recent Reuters poll showed a majority of Americans, 70 percent in fact, in favor of Medicare for All. Receiving “free” healthcare from the government sounds promising until one digs into the details related to the impact the plan would have from a dollars-and-sense perspective.
Over the past year, the cost of Sanders’ proposed socialization of the American healthcare system, representing nearly 18 percent of the total U.S. economy, has been extensively studied. Both left-leaning and right-leaning estimates price the plan at approximately $30 trillion. A recent study by the Mercatus Center at George Mason University estimates Medicare for All will cost the federal government at least $32 trillion over 10 years. For some sobering perspective, the total of all individual and corporate taxes collected by the federal government over the next 10 years is projected to be approximately $30 trillion. The federal government would have to more than double its tax revenue in the next 10 years to pay for Medicare for All. In order to cover just a portion of Medicare for All, Senator Sanders’ plan would mean an increase in the top marginal tax rate to 52 percent and a dramatic increase in the tax on capital gains and dividends. Even if that’s the case, a significant gap in funding still exists. Where does the rest of the nearly $32 trillion come from?
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