How a Medicare For All Plan Would Impact the Economy

Illustration of a patient and doctor standing next to each other

Medicare For All is a divisive concept that draws heated debate from all sides, especially during election years. While it’s easy to find opinions about Medicare For all, a succinct, objective explanation is much harder to obtain.

Let’s take a look at the core facts about Medicare for All to understand exactly how it would impact the economy and your own healthcare experience.

What is Medicare For All?

Medicare for All is the term used to describe one national health insurance plan for all Americans. In simplest terms, it would expand the role of public healthcare.

However, Medicare for All is not a specific healthcare proposal. It’s more of an umbrella term to encompass the variety of policies and ideas sponsored by various politicians, government leaders, and election candidates.

The most far-reaching Medicare for All proposals is outlined in bills sponsored by Senator Bernie Sanders and Representative Pramila Jayapal. They include many similarities, including:

  • No premiums, deductibles, or co-payments
  • Lifetime enrollment
  • Comprehensive benefits (including dental care, eyeglasses, hearing aids)
  • Using Medicare for All as a replacement for private health insurance
  • Allowing applications from all state-licensed, certified providers who meet eligible standards

Other Medicare for All Bills differs by allowing Americans to opt-out of the plan or by offering it only to people who don’t qualify for Medicaid. Former democratic presidential candidate Pete Buttigieg, for example, advocated for “Medicare for All who want it”.

The Cost and Proposed Ways to Pay For It

Under America’s current healthcare system, the average citizen pays a monthly health insurance premium to maintain coverage, then pays a deductible for every medical visit. The insurance covers a certain portion of the cost of care, and the patient covers the other portion.

Medicare for All aims to transform the existing system by using federal tax money to pay for the entire healthcare system. It’s nearly impossible to identify the exact price tag of a Medical for All system, but healthcare experts and economics have tried. Estimates range between $2.76 trillion and $3.87 trillion.

Bernie Sanders himself stated that his Medicare for All plan would cost about $30 trillion over 10 years. According to his plan, tax money from the following sources would be used to fund Medicare for All:

  • Large payroll taxes on medium and large companies
  • Payroll taxes on families earning over $29,000 a year
  • Higher taxes on corporations
  • Higher taxes on people with high incomes

Read More: How Billionaires Avoid Paying Federal Income Tax

So while one of the biggest attractions of Medicare for All is the $0 price tag for patients, it’s important to note that those costs could be incurred in tax increases instead. If the increase in federal taxes is offset by reduced spending on premiums, co-payments, deductibles, and state taxes, then the higher taxes may go unnoticed by the general population. On the other hand, Americans who ultimately pay more in federal taxes than they used to for health insurance are likely to take notice.

The Bottom Line

Medicare for All would cause significant economic shifts as the entire healthcare system adopted a new way of functioning. It wouldn’t be an overnight transformation, but more likely a gradual transition.

Private insurance companies would cease to exist, prescription drug prices would be negotiated down, and taxes would rise for certain people and businesses. Though most experts agree that we won’t see Medicare for All in 2021, many believe it’s a matter of time.

Read More: How to Get Health Insurance When You’re Unemployed