You know, I'm really conflicted on this. I really would like to have medicare for all. I just don't know how to implement it affordably given my UBI aspirations. And while medicare extra for all seems to shift costs to the private sector, that's not always a good thing. So let's look more deeply into medicare extra for all and see what the downsides and poison pills are to this plan.
The downside of public options
Public options are a popular compromise among more center leaning democrats. Biden ran on a public option as an alternative to medicare for all, as did many other centrists. Buttigieg's "medicare for all who want it" uses almost the exact same framework as medicare extra. These plans are sold on a low of flowery language. That they preserve "choice", and that medicare for all would "raise taxes on the middle class" (ignoring, those taxes, you know, replace insurance premiums). I mean, the reason I've been so turned off of these plans over the years is because they seem like thinly veiled and dishonest attempts to keep the private system around, flaws and all. I've supported medicare for all because I believed a fully public system would eliminate the problems with the private system.
I'm really only changing my mind because of the price of UBI here, and how laffer curves work. Later I'll be looking at an important question, what's the difference between a tax and a premium? But for now, let's look at how medicare extra for all, actually impacts people.
Medicare extra for all would aggressively enroll the uninsured and people on other forms of public assistance like medicaid and chip onto it. It would basically be like medicare, but expanded to cover dental, vision, hearing, and reproductive healthcare.
How much it costs depends on income. Someone who is below 138% of the poverty line, ie, most people on basic income, would simply get free healthcare. That said, medicare extra for all would technically accomplish my indepentarian goals of complementing healthcare along side basic income, ensuring people can get healthcare without being forced into the employment system.
However, for those who do work, and earn more money, the plan is less...good. Premiums can range from 0% for below 138% of the poverty line to 9% of income at 400% of the poverty line. That said, someone who is at 400% of the poverty line earning $51,520 a year would be paying $4,636.80 in health insurance premiums. That's $386.40 a month. For reference, the average adult currently pays $456 a month. I guess this is an improvement especially given this is above average income, but still. Moreover, there is "cost sharing" to consider. Copays, deductibles, etc. While people on low incomes are 100% covered, by the time one hits 400% of the poverty line, we're talking paying out 20% of medical costs. This is better than the current 30%, people pay, but still. If you get a bill for a $2000 MRI, you might have to pay $400 for it, etc. Currently you would be paying $600 for it. To be fair, out of pocket expenses will be capped at $5000 a year, which translates to $416.67 a month.
Admittedly, the scale varies. That's why the plan varies from $280 billion to $450 billion a year. The $280 billion option means higher cost sharing for individuals. The $450 billion option means less. By the time one hits 400% of the poverty line you're paying 20% of costs either way, but in that in between range costs can vary a lot. For example, someone at twice the poverty line might pay 10-15% of costs with the $280 billion option, whereas with the $450 billion option, they'd be paying 0-5%. For the record, they currently pay 13-27%, so either is an improvement.
Scaling up to your typical family of four, the poverty line is at $26,500. 138% would be $36,570, or slightly above my basic income level for such a family assuming 2 adults and 2 children. 400% of the poverty line would be $106,000. So, just think about it. Family of four at 400% of the poverty line would be paying $795 a month for insurance. That's less than the $1152 average paid now. So it does save money. Even with the out of pocket limits, they would still be paying only slightly more than the current average premiums.
All in all, this plan...helps. It likely would ensure most people on a basic income level of income, would not pay anything for healthcare. If you're working or middle class, it would likely reduce costs. This helps. Don't get me wrong, this is helping to control healthcare costs. But I can't help but wonder if single payer would be better. Keep in mind, my biggest concern with M4A was the cost it would impose on the rich. Combining current taxes, basic income, and then medicare for all taxes, the rich would likely be paying rates that potentially exceed the laffer curve in this country. Although sometimes I wonder if there is any wisdom to the laffer curve in practice at all (after all we had even higher tax rates in the past with no ill effects, and as demonstrated today, unemployment benefits arent as big of a disincentive to work as I thought).
Still, this would be replacing taxes with premiums and out of pocket spending. Are Americans really getting a better deal?
Revisiting Bernie's Medicare for All Plan
Bernie funds his expansive medicare for all plan from a variety of sources, including heavy taxes on the rich (making it even more unsustainable, although those can be eliminated without losing much revenue), but the primary taxes most would see include a 4% household tax and a 7.5% payroll tax, amounting to a 11.5% tax.
Everyone would face this tax. Any income beyond UBI in my ideal world would likely be subject to these taxes. To be fair the 7.5% tax would replace employers' contribution to health insurance, so only the 4% tax would likely be visible for individuals. Still, under medicare extra for all, employers would likely be paying 70% of the 9% premium (if I'm reading it right, I'm not sure, it's vague), meaning that they would be paying 6% and the employee around 3%. So let's just assume the entire 11.5% is borne by families in this sense.
Someone at 138% of the federal poverty line who pays nothing under medicare extra would be paying $2,044.06 a year under medicare for all. That's $170 a month. Someone at $51,520 (400% FPL) would pay $5,924.80 a year or $493.73 a month. That's more than medicare extra. At the same time, medicare for all would have no cost sharing. No deductibles, copays, out of pocket spending. Medicare extra could have someone paying up to $5000 more a year in costs. However, at the lower income levels, people would be shielded from the brunt of these costs. I'm tempted to actually say medicare extra for all may be more progressive in some ways. It tends to shield people under say, 200% of the poverty line a lot better than Bernie's M4A would, where people are subject to payroll taxes regardless of income, but people who earn more money likely would have a greater financial strain overall. Bernie's payroll taxes are steep. And while you get the elimination of other medical costs out of that, you could just as easily reduce or eliminate those costs among those on lower incomes anyway.
Scaling this up to a family of four, someone at 138% of the poverty line who would otherwise pay nothing under medicare extra would pay $350.46 a month for healthcare, while under medicare for extra, they would pay nothing. Someone at 400% of the poverty line would pay $1,015.83 a month under medicare for all, while under medicare extra, they would pay $795 plus up to $5000 a year in out of pocket costs. Once again, someone who is lower income would be paying less, while someone who is upper middle income subject to maximal costs would be paying more.
That said, is Bernie's medicare for all plan really all that great? Well, let me put it this way, it depends who you are. Poorer people might be better off on medicare extra, while middle to upper middle class people might be better off on medicare for all. Medicare for all has higher up front costs, with taxes being higher than most peoples' premiums under medicare extra, sometimes significantly so. However, medicare for all has the advantage of not having out of pocket costs. While those who are poorer would be shielded from these costs anyway, those who are more middle to upper middle class may be paying more under medicare extra.
"Taxes" vs "Premiums"
Just to debunk the centrists talking about the middle class, one thing I want to say is that in a lot of cases, Bernie's medicare for all could be cheaper on the middle class than a "medicare for all who want it" public option plan like Buttigieg wants (medicare extra is one of these plans). I mean, the 11.5% in taxes the middle class would be subjected to would replace all healthcare spending. There would be no premiums, copays, etc. Compared to the status quo, people would be paying less under both of these plans. Medicare for all raises "taxes" but it comes at the expense of "premiums". People are paying in some ways regardless, but they hate taxes but think premiums are good because free market or something.
Still, at the same time, premiums being more voluntary helps me. Under a medicare extra for all plan, premiums are not a "tax". They do not contribute to the laffer curve. Rich people who don't want anything to do with medicare extra could just choose private insurance. And we wouldn't have to worry about laffer curves since they'd pay either way. On the other hand if we subjected them to income and payroll taxes in exchange for healthcare, they would try to dodge taxes like they always do. In this sense, a "premium" based "voluntary" healthcare plan with a sliding scale for income seems like it would work much better than a mandatory tax based system in accomplishing my goals of keeping taxes below the laffer curve peak on rich people.
Conclusion
All in all, after looking at both medicare extra for all and medicare for all, both have pros and cons. Medicare for all is a much simpler single payer system, but it does have high taxes. All in all, medicare extra for all would likely be cheaper for people who are both lower income, and potentially higher income. On the flip side medicare for all would likely help the middle to upper middle class more. While premiums are lower, out of pocket costs might hurt those above median income more than the flat tax of medicare for all would. Still, I'm convinced both models are viable at this point, it's just a matter of what you prefer. Given my goals are to shield lower income people from healthcare costs, as well as keeping taxes on the rich below laffer curve peak levels, medicare extra for all is better for my specific goals. However, middle to upper middle class people might be best off on medicare for all, despite them often being the people most likely to complain about it. Well, have fun keeping employer based insurance I guess. The demographics that seem to benefit most from the specific medicare for all model seem to be the ones who fight it hardest. I'd argue medicare extra for all likely suits my specific goals better anyway.
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