So, while I love the idea of single payer healthcare, ie, "medicare for all", I have a complex relationship with the idea in recent years. The fact is, it's EXTREMELY expensive, to the point that it may conflict with my basic income plan, meaning I might be able to only fund one properly, while having to compromise or water down my ideas on the other. And as I established last year, I'd be more willing to compromise on healthcare than UBI, and shift to an alternative framework such as medicare extra for all, or this bill, which essentially offers an improved version of this framework. This would help us be able to afford universal coverage for a fraction of the price of medicare for all, but it would not completely eliminate the problems with premiums, deductibles, etc. So, single payer is the program I would ideally support. But, let's face it, with healthcare spending now topping $4 trillion, that's kind of a big ask. The fact is, single payer was barely affordable BEFORE the pandemic given my other ambitions, and now, it's literally more expensive than my entire UBI plan, at $4.1 trillion. For reference, I previously assumed we spent around $3 trillion, with around $1 trillion funded by the government and us only needing to fund another $2 trillion or so. But if we need to fund almost $3 trillion, eh, let's face it, it's either that or UBI. And I ain't giving up UBI.
So let's see if we can actually salvage this idea. I'm going to take last year's proposal and try to rerun the numbers. This was based on Bernie and Warrens' 2020 plans, which were based on the pre COVID numbers.
Total costs
At this point, we need something that can raise a total of $4.1 trillion per year. If I can't at least get close to that, I will have to back off of single payer and shift to the alternative frameworks mentioned above, which would be significantly cheaper. Still, I would like to attempt to fund it.
Existing healthcare spending - $1.629 trillion
According to usgovernmentspending.com, we will spend $1.629 trillion on healthcare in FY2023. While it doesn't break down medicare, medicaid, etc., it mentions $761 billion spent on seniors, $817 spent on "vendor payments", which is what I'm assuming to be a combination of medicare and medicaid, and more minor spending on other priorities. This is a bit more than we spent in previous years, but it's been needed because of COVID oriented initiatives.
This actually gives us a decent base to build on, as this covers roughly 40% of healthcare spending in the US already, meaning we only need to fund another $2.5 trillion.
Employer side payroll tax - $843 billion
Bernie and Warren both supported an employer side payroll tax, which I used in my past plan. However, Bernie and Warren came up with wildly differing amounts, from $520 billion on Bernie's plan, and $880 billion on Warrens. Given both numbers are dated, I'm going right to the personal income and outlays chart that I often base my UBI calculations on. In chart 1, total wages and salaries were $11.243 trillion. A 7.5% payroll tax (Bernie's plan) on that would raise $843 billion. This would be an employer side payroll tax, which is invisible to workers, and is intended to replace existing employer spending on healthcare.
At this point, we have $2.472 trillion in spending total, meaning we only need $1.628 trillion to go.
4% tax on all income - $640 billion
So, Bernie had a proposal of having a 4% tax on all income above $29,000, but given I support UBI, I'm just gonna do a flat 4% tax. I could regurgitate the number i calculated from my UBI a couple months ago, assuming a $15.624 trillion tax base, but it's already a couple months outdated. Using the same formula with more modern numbers, I get just over $16 trillion. At 4% tax rate, that's $640 billion.
We're up to $3.112 trillion now, only needing $988 billion to go. This is actually looking doable.
From here on out, I'm just going to copy and paste old numbers from the previous plan. In practice, we might be able to raise more revenue from expected here.
Excise taxes- $33 billion
My previous single payer plan would raise taxes on cigarettes, alcohol, and sugary drinks. I didn't get much revenue from it, but it only makes sense if you put unhealthy things in your body, it should be taxed to pay for your healthcare.
Additional take home pay subject to taxes- $140 billion
This is lifted from Elizabeth Warren's plan. Basically, all of those tax breaks you get for health insurance? Well, you don't need health insurance if you have single payer, so those go away and you just pay a little more taxes on regular income then.
Changes to corporate tax code- $300 billion
Bernie and Warren both proposed as much and believe we could bring in roughly $300 billion this way.
Wealth tax - $275 billion
I lifted this from the medicare extra for all plan mentioned above, although they might have lifted it from Warren
Improved tax enforcement - $230 billion
Warren believed beefing up tax enforcement could bring in more revenue in her M4A plan.
Improved estate taxes- $34 billion
Bernie wanted to raise estate taxes on the wealthy to fund his plan.
Bringing it all together
Existing spending - $1.629 trillion
Employer side payroll tax- $843 billion
4% tax on households- $640 billion
Excise taxes- $33 billion
Additional take home pay- $140 billion
Changes to corporate tax code- $300 billion
Wealth tax- $275 billion
Improved tax enforcement- $230 billion
Improved estate taxes- $34 billion
+
Total- $4.124 trillion
Boom! We did it. The numbers work. We made it happen. Now, to be fair, a lot of this was based on last year's plan. But I never actually looked at total healthcare spending before, and counted existing spending. This plan does use updated numbers for payroll and income taxes. And it just works. I mean, it works perfectly. Now, if we come up with a revenue shortfall somewhere, maybe we would raise a little less. I did rely on numbers from the Sanders and Warren campaigns, so they might be dated, or for all I know their research isn't good or something has changed since then.
But all in all, it works. I will maintain my support in single payer for the time being, as this plan works separately from my UBI, and does not conflict with it to my knowledge.
I'm going to be honest, I did not know for sure if the numbers would work out this well. I knew previous estimates were based on older $3 trillionish numbers, and funding single payer seemed like a scary proposition to me. It was borderline last time, and I thought maybe the extra trillion would set it over the edge. But given income has also grown in the past few years, the increased tax revenue makes it even out.
And the real kicker is, in the long term we SHOULD be able to get the costs down. We could save hundreds of billions on eliminating excessive healthcare administration, and costs on medicines and procedures. Honestly, implementing single payer in the US is like using a sledgehammer to smash down all existing spending. It requires us to bite the bullet of high costs in the immediate future, but in the long term, we might be able to get costs down to like 12% of our GDP instead of 20%, if other countries are any indication. Really, we're the weirdos in the world because we haven't had a functioning healthcare system in decades, and we let this problem spiral out of control. Our system is full of inefficiencies and price gauging, and this should resolve much of that.
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