Single-Payer Health Care: Bernie’s Plan

As we all watch the ups and downs of this primary season I thought it might be interesting to look at one of the issues that is driving support for Senator Bernie Sanders: A Single-Payer Health System. 

The virtue, or fallacy, of such a system has been debated in this country for more than a century.

What do you think?

Let’s look at both sides of the “Medicare for All” argument so you can decide for yourself.

What is Bernie’s Plan?

As announced in January, Bernie’s 9-page plan [available here] would create a single-payer health care program administered by the federal government. Everyone would have access to comprehensive care, for everything from emergencies to eye exams, from mental health to nursing home care. As stated on Bernie’s website: “As a patient, all you need to do is go to the doctor and show your insurance card. Bernie’s plan means no more copays, no more deductibles and no more fighting with insurance companies when they fail to pay for charges.”

As detailed in the plan, health care costs will be brought under control, saving a projected 6 trillion dollars over the first 10 years. These savings are anticipated mainly through the ability of a single payer (the government) to negotiate lower reimbursements to doctors, hospitals and drug companies. Administrative overhead will also be decreased with the eradication of the multiple private health insurance companies.

The government is not the only entity that will save money under Bernie’s plan, he wants voters to understand that while they gain access to better care they, too, will be saving money. The proposal states that the typical middle-class family would save over $5,000 a year.

Payment under Bernie’s plan is through the government, but the care itself is not. Despite the cries that Bernie wants “socialized medicine,” hospitals, doctors and other health care providers will remain private. This is important; as I discussed in my last Fontenotes, “Single Payer Health Care” and “Socialized Medicine” are two separate things. (For more on the difference go here.)

Who Will Pay for Bernie’s Single-Payer System?

Bernie’s plan will be funded through a 2.2% income-based premium (for a family of 4 making $50,000 that would be $466 a year), a 6.2% tax on employers, taxes on capital gains and dividends, and a “Responsible Estate Tax” for inheritances over 3.5 million dollars.

Additional revenue to cover the estimated cost of 1.38 Trillion dollars will be raised through a “progressive income tax” included in the proposal. Many of my readers would be exempt, but those of you who earn between $250,000 and $500,000 should anticipate a new 37% marginal income tax. If I have any readers making over $10 million I have two things to say: 1) nice to meet you! and 2) your marginal tax rate goes up to 52%.

As you are calculating your cost please keep in mind that most tax deductions will be taken away under Bernie’s plan.

Why Everyone Isn’t Excited

In December 2015 a Kaiser poll found a whopping 58% of Americans, across all political affiliations, favoring the idea of a single-payer health care system. The appeal of the Bernie plan for many Americans, as reflected in the enthusiasm of his followers, should not be a surprise to anyone.

But why isn’t everyone on board?

A second Kaiser poll in February 2016 demonstrated that support for single-payer health care fell by nearly half when participants were told it would require raising taxes, eliminating the Affordable Care Act, and could “give the government too much control over health care.”

Many commentators say the reason they can’t support Bernie’s plan is they think it is politically impossible to achieve (particularly with a Republican-controlled House of Representatives), but they also raise questions about the math within the proposal. The projected savings are questioned, as is the ability to rein in costs when people are told they can get all the care they need without rationing.

But perhaps the most frequently voiced argument against the Bernie Sanders plan is the experience of his own state of Vermont, which has tried to achieve single-payer health care since at least as far back as 2005. With great fanfare, the plan was finally passed by the state in 2011.

Described by Forbes as “an unmitigated failure,” Vermont abandoned its Single-Payer plan in 2014 before it was ever implemented. Reasons cited include failure of political will to do what was required to make the plan work, including implementation of the 160% tax increase that would be required.

A Single-Payer Health System: A Century of Debate

The debate over whether a single-payer health care system would be better for America will not end with the 2016 Presidential election. Advocates in Vermont vow to continue to press for a single-payer system, and Colorado will vote on a similar bill for their state in their own Fall 2016 election.

How to best pay for health care has been an important debate in this country as far back as the late 1880s, when advocacy for single-payer healthcare first began, but in this election the issue is (at least tangentially) on a Presidential ballot for the first time.

This issue can not- should not- be dismissed with phrases as simplistic as “socialized medicine” or “free medical care.” It is important all of us as voters study this issue carefully, and vote according to our own decision on what is best for ourselves, our communities, and our country.

Want to Know More?

Having highlighted the details of Bernie Sanders plan extensively- it seems only fair I give you links to the position statements of the other Presidential candidates, as listed on their own websites [in alphabetical order]:

Hillary Clinton

John Kasich

Donald Trump

In addition, Ted Cruz has made some statements about health care, but it is not listed as an issue on his website. A review of quotes and comments by the candidate on the subject are listed here.