Democrats’ ‘Medicare for All’ would impose enormous tax increases on all, including seniors, to pick up all medical costs currently borne by employers and those of working age.
In a rare op-ed, President Trump recently suggested that “Medicare for All” proposals gaining popularity among Democrats would “demolish” the Medicare benefits that seniors expect to rely on. This provoked Senate minority leader Chuck Schumer to issue an angry rebuttal scrawled in red pen, in which he denied that Democrats supported single-payer health care and declared suggestions that Democrats had plans to outlaw private health insurance “NOT TRUE.”
Schumer’s outburst was a scream of despair from an electorally oriented Democratic leader at the idea that his party supports a single-payer health-care scheme. But his quarrel is with those who are capturing his party, not those pointing out what it’s pushing. While most members of Schumer’s Senate Democratic caucus may be opposed to single-payer, 123 of 193 House Democrats have cosponsored sweeping “Medicare for All” legislation to make the federal government the sole purchaser of America’s health-care services — and the party’s 2020 presidential hopefuls are not far behind.
In truth, Medicare is a generous benefit for retired and disabled Americans largely paid for by those who are in work — a subsidy worth an average of $13,087 per beneficiary per year. “Medicare for All” would flip this arrangement — imposing enormous tax increases on all, including seniors, to pick up all medical costs currently borne by employers and those able to work.
Although Schumer suggested that seniors might welcome reforms that “would expand benefits, eliminate premiums, reduce cost sharing,” having taxpayers assume these expenses for all citizens would be enormously expensive. Indeed, Schumer revealingly didn’t dispute the estimated tax increase of $32.6 trillion over ten years (over $26,000 per household per year) cited in Trump’s op-ed, which would be required to fund “Medicare for All.”
Such a tax increase would vastly exceed the value of expanded benefits to retirees — even if its burden were distributed so that most seniors faced smaller-than-average tax hikes. Seniors are already able to cover all their out-of-pocket costs by purchasing Medigap’s Plan F at an average premium of $1,712 per year. The experience of the 1989 Medicare Catastrophic Act debacle suggests that seniors would likely react with outrage at being forced to provide additional coverage for Medicare beneficiaries who currently choose not to purchase it — to say nothing of how they might react to being forced to pick up a large portion of the medical costs of so many more Americans who are currently covered by employer-sponsored insurance.
Spending on health care as a share of GDP in the United States (8.5 percent in 2015) already exceeds that in the United Kingdom (7.9 percent) and Canada (7.7 percent). The main difference between those systems is that the U.S. focuses public assistance on those who would not otherwise be able to provide for themselves: the elderly, the disabled, and the poor.
As targeted programs, Medicare and Medicaid therefore serve to supplement, rather than to supplant, private spending on health care. This allows them to be more generous to those in greatest need: Low-income Americans, including 8 million Medicare beneficiaries, already receive comprehensive, publicly funded benefits without premiums or out-of-pocket costs. Unlike residents of Britain or Canada, where government funds must cover all, Americans do not face such long waits for surgery, have more access to life-saving drug therapies, and have much lower mortality rates following comparable major incidents such as heart attacks or strokes.
By destroying America’s system of focused public assistance, “Medicare for All” would necessarily subject those currently enrolled in the program to similar restrictions in timely access to quality care. Even with an extra $32.6 trillion in tax revenue, the “Medicare for All” proposal would cover only 87 percent of hospital costs — leaving two thirds of facilities in the red, forcing them to cut services in a struggle to keep their doors open.
Under current law, the Congressional Budget Office estimates that the cost of Medicare will already increase from 3.5 percent of GDP in 2018 to 6.8 percent in 30 years, as a result of rising medical costs and the continued aging of the population. While finding a way to fund existing promises may be less exciting than making new ones, any politician who endorses proposals to shift Medicare’s focus away from seniors will undoubtedly be putting their access to quality medical care at risk.
This piece originally appeared at National Review Online