Business Leaders Should Crunch the Numbers On Medicare for All
Big business appears to be getting behind Medicare for All.
That’s one way to read a new report from the National Business Group on Health. The organization recently asked 147 large employers that provide coverage to over 15.6 million workers and their dependents for their opinions of Medicare for All.
Some employers expressed concern about the quality of care under Medicare for All, or how much it would cost. Others embraced it or had little idea what it would entail.
This lack of awareness about the details of Medicare for All is problematic. Even its proponents acknowledge that it would raise taxes or introduce new taxes, particularly on businesses. Evidence from other countries with similar systems, meanwhile, shows that Medicare for All would deliver poor care to patients.
Not every employer realizes what the transition to Medicare for All would entail. Four in five respondents to the National Business Group on Health’s survey correctly said the government would have to raise taxes to get the program off the ground. But around one in five did not know whether taxes would go up or down.
That’s alarming. Medicare for All could cost as much as $40 trillion in its first decade, according to one of its own architects, Senator Bernie Sanders. He’d raise a big chunk of that money by taxing employers.
Chief among the levies he has in mind is a 7.5 percent payroll tax. He expects this will extract $3.9 trillion from employers over 10 years. Sanders has also proposed a tax hike on capital gains for those earning above $250,000 annually and a 4 percent tax on every American household.
Even that wouldn’t be enough to finance the plan. So employers are likely to face even higher taxes down the line.
Employers are equally unclear about how Medicare for All would affect their workers. Less than half the respondents in the National Business Group on Health survey believed their employees’ health costs would go up under Medicare for All. Some said Medicare for All would drive down their workers’ health costs.
But that’s not the case. More than 70 percent of working, privately insured households would pay more for health care under a fully-funded single-payer plan than they currently do, according to an analysis from Emory University professor Ken Thorpe. Another study found that Medicare for All would cause the average American’s post-tax income to shrink by more than 10 percent.
Employers seem equally misinformed about how Medicare for All would transform the U.S. healthcare system. Only 56 percent of those polled by the National Business Group on Health said the plan would decrease the quality of patient care; a mere 40 percent said it would reduce healthcare access.
By making care free to patients at the point of access, Medicare for All could induce effectively unlimited demand for care. That surge in demand would encounter comparatively limited supply. The country is already projected to be short 122,000 physicians by 2032. Long waits would be the result.
For proof, look to Canada, whose healthcare system is the model for Medicare for All. Last year, Canadian patients waited a median of 19.8 weeks to receive treatment from a specialist after receiving a referral from a general practitioner, according to the Fraser Institute. For some specialties, the wait is even worse. Patients waited a median of 39 weeks for orthopedic surgery.
Medicare for All may seem tempting to businesses struggling to absorb the steadily rising cost of health benefits. But it would deliver a major hit to their bottom lines — and consign their workers to long waits for substandard care.