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Paying for Medicare for All Is Easier Than You Think

Progressives need to do better at answering how to pay for it

Single Payer Medicare for All Protest in Baltimore / Photo by Elvert Barnes

As Medicare for All has become a litmus test within the Democratic Party, presidential hopefuls have embraced Bernie Sanders’ single-payer Medicare for All proposal which would guarantee healthcare to every US citizen as a right. But the first question critics ask: How do you plan to pay for it? Wouldn’t it cost $32 trillion over 10 years?

Unfortunately, advocates do a very poor job at answering this question, and it’s quite frustrating. When Bernie Sanders was asked about a study by Mercatus Center which estimated the cost for Medicare for All to be $32 trillion, his response was underwhelming in my opinion:

“If every major country on earth can guarantee health care to all, and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States cannot do the same,” Sanders said in a statement. “This grossly misleading and biased report is the Koch brothers response to the growing support in our country for a ‘Medicare for all’ program.”

Progressive icon Alexandra Ocasio-Cortez was asked by CNN anchor Jake Tapper on how to fund progressive programs including Medicare for All, her response was also missing the point: “Medicare for all would save the American people a very large amount of money.” Ocasio-Cortez then referred to other countries such as Canada and France who were able to implement a single-payer health care system. When Tapper asked again for more specifics regarding the price tag, she said:

“When you look again at how our health care works, currently much of these costs go into the private sector. A year ago, I was working downtown in a restaurant. I went around and asked “how many of you folks have health insurance?” not a single person did, because they would have had to pay $200 a month for insurance that had an $8,000 deductibles.”

Others have botched the question altogether. When CBS This Morning host Norah O’Donnell twice asked presidential candidate Cory Booker on what the cost of Medicare for all would be, the senator from New Jersey avoided the question. To make matter worse, he made references to reducing Medicare age to 50, lowering premiums, expanding access to care, and creating affordability – rhetoric that has nothing to do with single payer Medicare for all!

Answering the Inevitable Question

Progressive leaders must be prepared to answer these questions with confidence, consistency and convincingly. The next time someone asks: “Medicare for All costs $32 trillion. How will you pay for it?” the answer should be:

First, the $32 trillion estimate is wrong and it’s demonstrably false. That study admits that Medicare for All would save trillions, but claims that single-payer would require the government to fund 57% of total national healthcare costs. The problem is that the government already funds close to two-thirds of all healthcare costs. A fifth grader will tell you that this doesn’t add up. So, when we say that you shouldn’t trust a study sponsored by the Koch Brothers, it’s not just hyperbole.

The reality is that Medicare for All would save trillions. So it’s never hard to pay for something that’s cheaper! The total cost is $1.05 trillion a year, according to an independent peer-reviewed 200-page study. (For dramatic effect, I would take a copy of that study and hand it to the anchor.) That number is actually high because it didn’t account for elective procedures which will not be covered by single-payer Medicare for All, such as cosmetic surgeries or over-the-counter medications.

How do we pay for that trillion? No problem! If we ask businesses and people to continue to pay the premiums they pay today, we would end up with too much money. But we can do much better and give people and businesses a major break, and still generate a surplus. We will give businesses an 8% premium cut, reverse Trump’s tax cuts, establish a wealth tax on the ultra-rich and change how capital gains are treated 1. This will save Americans and businesses thousands of dollars. It will eliminate deductibles and coinsurance costs that are causing many with insurance to go bankrupt. What’s there not to like?

1 There are many different ways to fund the $1.05 trillion needed for Medicare for All. One may consider other options such as estate taxes, premiums for households, making the income tax more progressive, reducing military spending, etc. In my view, the following options appear to be the least controversial:

  1. Business health care premiums cut by 8 percent relative to existing spending per worker – generating $623 billion
  2. A combination of Sanders and Warren’s proposals for Wealth tax on the ultra rich: 1% for wealth over $21 million, 2% for wealth over $50 million, and 3% for wealth over $1 billion – generating $205 billion
  3. Reverse Trump’s tax cuts – generating $164 billion
  4. Taxing long-term capital gains as ordinary income – generating $69 billion

Written by Salam Morcos

Salam Morcos

Salam Morcos is a Managing Editor of Progressive Army and a member of its Editorial Board.

Political activist for democracy, social justice, racial justice, women's right and human rights.

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Paying for Medicare for All Is Easier Than You Think