Analyzing Bernie Sanders' Medicare For All proposal

So, seeing how I'm getting into analyzing how we pay for things like Andrew Yang's UBI plan, I decided to also analyze Bernie Sanders' medicare for all proposal since I also would like to see universal healthcare implemented. I came across this page on his senate website outlining how he plans to pay for it, and looking at it, our current spending, and what we would need to implement medicare for all, I will see if the numbers add up.

We spend $3.5 trillion on healthcare per year as a country, which is a little different from Sanders' claim of $3.2 trillion, but not off by a lot. It is possible that this is derived from the same data, just looking at it differently, or that the data is from a different year. I will look at how his numbers add up to both estimates in this article. We currently spend $1.036 trillion between medicare and medicaid, a trillion less than what Sanders claims, so we need roughly $2.2.-2.5 trillion in order to fund it in theory. This sounds like a big gap to fill in theory but let's look at Sanders' plan.

So we get $1.036 trillion from current spending.

We would get $390 billion from a "7.5% payroll tax paid for by employers."

We would get $350 billion from a "4% income based premium paid by households."

We would get $420 billion a year from tax breaks that we would no longer need that go to people like employers who currently fund healthcare.

We would get $500 billion from saving on administrative costs.

We would get $113 billion from saving on pharmaceutical costs.

So far this gets us a total of about $2.8 trillion dollars. Effectively, depending how one looks at it, it would raise taxes between 4% and 11.5% on people, and as far as the employer base payroll tax that might actually take the place of a lot of current contributions employers pay so it might actually come out much lower. It would be a tax increase on average people, but considering how much of that spending replaces current spending on insurance, many people might be better off. Sanders points out that the average family could save around $4400 a year under this plan so it sounds like it would be a net positive for most families.

And that's not all, Sanders also had other proposals that would help close the remaining $400-700 billion gap that are targetted at the wealthy and wall street. These include:

Higher taxes on those making over $250,000 a year, ranging from 40% up to 52%, as well as taxing capital gains like regular work and "limiting tax deductions for the wealthy." This would raise $180 billion a year.

He would raise $24 billion from increasing the estate tax on estates over $3.5 million.

A wealth tax would raise $130 billion per year.

He would close the "Gingrich Edwards" tax loophole which should raise $25 billion per year.

He would tax off shore profit holdings in the Cayman islands and the like, raising $77 billion per year.

He would "impose a fee on large financial institutions", raising $12 billion per year.

Finally, he would "repear corporate accounting gimmicks" for an additional $11 billion yet year.

This would give us an additional $459 billion per year total, which combined with the previous $2.8 trillion, gives us a total of around $3.26 trillion. Assuming Sanders' $3.2 trillion figure is accurate, his numbers add up on paper. I can't guarantee he will raise the revenue he claims to, but on paper I have to give his plan a tentative pass. I will admit that based on the $3.5 trillion figure that I do come up $240 billion short that way of looking at it, but it is unknown whether the two figures were derived from reading the same data differently or what. The point is the numbers add up close enough in theory that I have to give this idea a tentative pass.

Also, another thing that we need to take into consideration with single payer healthcare is that in such a system, the government is effectively a monopsony, or the only buyer of healthcare (hence the name "single PAYER"). This is basically the buyer equivalent of a monopoly in economics. The advantage of such a system is the government can effectively strongarm businesses into charging lower prices because if they don't, the government can force their hand by refusing to buy from them. So they can set prices and control costs much better, and this could lead to further savings in the long term where maybe one day we can only spend 10-12% of our GDP on healthcare like the rest of the world.

That said, it looks to me that while single payer healthcare is very expensive, almost as much as my universal basic income plan, Bernie Sanders does have a solid funding proposal to pay for it to the best of my knowledge. I can't go into the specifics of whether the nominal tax rates he will attempt to charge will bring in the amount of revenue he claims they will or any of that really advanced stuff you would need a full fledged economist to analyze, but his numbers to be, look good enough where I have to approve of this plan.