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Democratic presidential candidates are advocating for a reform of the healthcare system, but the big question remains: Who will bear the cost? This was a key issue during last night’s fourth primary debate, where 12 contenders took the stage in a bid for attention. Yet, the conversation around healthcare may have sparked more uncertainty than clarity. Though many specifics are still unclear, current proposals suggest that a government-funded healthcare plan wouldn’t significantly raise your out-of-pocket expenses; in fact, it might lower what you spend on care.
A segment of the evening was devoted to discussing Medicare for All, the overarching idea that the government should oversee the U.S. healthcare system. There are various proposals on how to achieve this, but the ultimate aim is for everyone to receive some level of insurance at no cost to them.
Senators Bernie Sanders and Elizabeth Warren are pushing to phase out private health insurance in favor of Medicare for All. On the other hand, Pete Buttigieg, Julian Castro, Senator Cory Booker, and Senator Amy Klobuchar support introducing a government insurance plan alongside private options. Andrew Yang, however, advocates for allowing people to choose between private and public coverage, with the expectation that public options will eventually surpass private plans, as he told the Washington Post.
None of the candidates have clearly explained how a universal healthcare plan would be funded—or how such a funding approach would affect your personal finances. This leaves room for critics of Medicare-for-All to voice concerns.
During last night’s debate, former Vice President Joe Biden—who has stated a preference for improving the existing Affordable Care Act over starting a new program—claimed that individuals earning between $50,000 and $70,000 annually would experience a $5,000 increase in healthcare-related taxes under Medicare for All.
However, that estimate is based on a combination of two possible solutions presented by Sanders in his co-sponsored Medicare for All bill, which was introduced this spring, according to Politifact. Reporter Shefali Luthra explains:
Therefore, stating that Medicare for All would raise taxes as precisely as Biden suggests misrepresents the bill. Additionally, there is no clear understanding of what this healthcare plan would actually cost, so any tax burden estimate is largely speculative.
Among the options detailed by Sanders’ office are a 7.5% income tax premium paid by employers, a 4% income-based premium paid by households, or tax increases on the wealthiest individuals through various methods. Focusing on the 4% income-based premium, Sanders estimates that a 'typical middle-class family' earning $50,000 would pay this tax after applying their standard tax deduction. The family would save more than $4,400 per year.
In 2018, the average yearly family health insurance premium for employer-sponsored coverage was nearly $20,000, with approximately $5,400 of that amount paid by the employee, according to the Kaiser Family Foundation.
A 2018 Vox analysis of data from the New York Health Act revealed that new taxes implemented to fund healthcare would likely replace the same amount of money currently spent on health insurance premiums, whether those costs are covered by the individual or their employer. Here’s Dylan Scott’s breakdown:
Essentially, anyone earning up to 1,000 percent of the federal poverty level—around $120,000 for an individual or $250,000 for a family of four in 2018—would pay the same amount or less when factoring in both their out-of-pocket expenses and taxes that fund healthcare.
During the debate, Sanders stated that taxes will increase 'significantly' for the wealthy, while 'for virtually everyone, the tax increase will be much less' than what they currently pay out of pocket for healthcare. Meanwhile, Warren declined to elaborate, simply noting that she wouldn’t support a healthcare bill unless it lowered costs for middle-class families.
