Friday, July 7, 2017

An easy way to solve the Medicare For All tax problem

Polling has consistently shown broad public support for Medicare For All, or single payer health care, but every policy position is vulnerable to attacks. The most common attacks used against Medicare For All revolve the around overall cost and the need to raise new taxes. These issues can be a problem, but one that is easy to solve if supporters are willing to be creative.

Traditionally, single payer plans suffer from the issue of "big, scary numbers." Take, for example, the recent bill in California where headlines about it often focused on its overall cost to the government of $400 billion instead of the net change. Much of that $400 billion sticker price simply added up to the state consolidating the billions it spends on several health programs (Medicaid, state employe benefits) into one program.

It is also easy to scare people over the tax increases needed to pay for a pure single payer system, even though it would mean individuals would pay less in taxes for healthcare than they currently pay in premiums.

Supporters of Medicare For All should engage in a multi-faceted educational effort to inform people about the value of these trade-offs, but they should also realize there is an easy way to avoid some of these political problems

First, allow companies and individuals under 65 to buy into Medicare.

Second, require all companies buy their employees Medicare or private coverage at least as good Medicare from insurers that must pay into a risk adjustment program. This is already how Medicare basically works with Medicare Advantage, except companies would be making the choice.

Most of the cost of our healthcare system is already hidden from individuals by the tax-exempt status of employer-provided insurance; so instead of trying to teach everyone about this, just modify it. This plan would hurt companies that don’t already provide coverage but cause significantly less disruption than eliminating employer-provided insurance and replacing it with a new tax.

This plan mostly eliminates the need for very large new taxes or the "big, scary number" problem. Everyone with a job will technically get coverage via their work and those without jobs could mostly be covered by moving around money already spent on Medicaid, ACA, etc…

The strong employer mandate is not a perfect funding source, but it is good enough. In practical terms it would function much like a payroll tax with a ceiling. It is basically how Germany funds its health care system, and it would effectively get us to where the country needs to be.

No comments:

Post a Comment