Medicare for All is all the rage among Democrats these days and it is easy to see why. Americans hate their health insurance system and want something else.
The term Medicare for All is a euphemism for single-payer health insurance. Under single-payer the government acts as your “health insurance company.” It provides the coverage and reimburses the providers.
Details of such systems vary widely but one thing is clear, any Medicare for All scheme would cost a lot of money. The United States spent an estimated $3.31409 trillion or 17.9% of its gross domestic product (GDP) on healthcare in 2017.
Frighteningly, health spending is expected to eat up 17.9% of America’s GDP or $5.7 trillion by 2016, Reuters claimed. That’s disturbing because the GDP is all the money generated by the US economy.
Why Medicare for All is Inevitable
Such figures make single-payer health insurance inevitable in the USA because it is the best way to contain healthcare costs. Under single-payer the government could set the prices and drugs and procedures.
Theoretically Uncle Sam can mandate prices for treatments and care and control costs. Health care spending in countries with single-payer systems; such as Japan, the United Kingdom, and Canada, was about half what it was in the USA.
Per capita healthcare spending in the US in 2016 was $10,348 in 2015, the Peterson-Kaiser Health System Tracker estimated. Japan spent $4,519 per person, the United Kingdom spent $4,192 per person, and Canada spent $4,752, in 2016.
How to Pay for Medicare for All
The question we need to ask is not if Medicare for All is a good idea or if it is coming. Single-Payer health insurance is coming to America and soon. Therefore the question we need to ask is how to pay for it.
Here is my suggestion for a tax scheme to pay for Medicare for All.
- Put a 3% flat tax on all individual income over $20,000 a year.
- That means all individual income rents, salaries, business income, wages, freelance income, investments, royalties, dividends, interest, rents, everything.
- Collect it from salaries, wages, freelance income, commissions, and contractor payments as withholding. That means the employer pays for the individual.
- There would be no limits on the tax, it would apply to all individual income, including Jeff Bezos’ $140 billion. That means Jeff would pay a Medicare tax of $4.2 billion a year.
- Companies with a payroll of more than $1 million would pay a 1.5% matching tax for all employees.
- Companies with a payroll over $10 million pay a matching tax of 3%. Since it is a matching tax on salaries this should not affect corporate profits.
- The tax would be augmented by a 3% sales tax on sugar, candy, soda pop, cookies, fast food, and salty snacks.
- There would also be a 3.5% tax on alcohol and a 6% tax on tobacco and marijuana to support Medicare.
This would be a simple measure that would save most Americans money. A household making $58,000 a year would pay around $1,740 for Medicare. Since $58,000 is the average annual household in the USA, the average family would pay less than $2,000 for health insurance.
One thing is clear something has to be done to contain healthcare costs in America. Logically, that something is single-payer health insurance. The billion dollar question is do our political leaders have the balls to implement that solution?