As the name implies, Medicare for All is a plan to bring health care to everyone in the United States, primarily to citizens but also, in some form, accessible to non-citizens, such as exchange workers and students and perhaps in some form of payment to non citizens resident aliens, pending naturalization.
Not only is such a plan affordable, it will substantially reduce family health care costs and improve care for everyone. Based on all evidence, of Obamacare, which was a good, if tentative, first step and based on analysis of European health care systems, no one will lose insurance and health care costs will go down. In fact, all Americans will have health coverage, unless lobbyists prevail and Republican majorities are elected. Based on estimates of individual annual premium costs now running at about $12,500, costs should eventually drop first to about $9,000 and then again, to around $6,250.Of course, the obvious questions are: how are we going to pay for it and what will it look like?
Switching to Medicare for All has Immediate Effects
First of all, let’s understand the reality. Once we begin the process of switching to Medicare for All, costs will begin to fall. That is because we currently pay far more for health care than is necessary. Health care, in all other advanced countries is not seen as a business. Nowhere else in the world do some people profit on the illnesses of others. Without an additional 30% or more profit added on to bills, prices begin to drop automatically. With a new “Medicare for All,” system, we will ask (or tell) the top 1% to pay a little more in taxes to help switch over to the new system. That is part of the Medicare for All legislation. (Actually, the percentages of increases in taxes on the super-rich in plans submitted by Senators Sanders or Warren are quite small. Some economists feel that they could afford much higher taxes than these low, single-digit increases. The fact is that many of he top ten percent of one percent could pay the slight “Medicare for All” tax increases and never even know they are paying more!)
So, we do have the money to pay for it…easily. And. More importantly, NO ONE WILL LOSE HEALTH CARE. Or will anyone but the super-rich pay more money for health care. We will all pay less for the same care we have right now. There is a several year transition period, during which people will transition out of private plans and into billing for health care through the government, by “Medicare.”
Of course, though less costly, health care will not suddenly be FREE. That is another mistaken understanding. You will simply no longer pay premiums to a private company, or have co-pays at the doctor. You will have a plastic card and a slightly higher tax bill…but one less than your current taxes plus your health care premiums. Health care costs will become basically a part of your taxes. Other cost reductions will come from lower government cost of managing health care, as is now done in Medicare and the Veteran’s Administration. Unlike the VA, however, your doctors and hospitals and pharmacies will be whichever ones you choose. You can continue to use the same doctors and health care systems.
Disappearing Health Care Premiums
Your premiums will go away. What had been, let’s say $10,000 in premiums will become something like $6,500, which you will pay as part of your annual taxes. So your taxes will go up a lot (less than current taxes plus your health insurance premiums) but your health care premiums will disappear. Your overall cost of living (in this case, health care plus taxes) will go down because you will have no health care premiums or co-pays or other costs and your health care costs will begin to gradually go down. More importantly, you will never have to worry about losing health care coverage again. All residents of the U.S. will be guaranteed health care coverage. The costs will continue to go down over the next several years as private health insurance leaves the system. Your actual increase in taxes, however, will be lower than your current tax bill plus your current health insurance premiums.
How much? Well…lower. All the experience with government-run or non-profit health care systems shows that they are lower than what we pay in the United States. Is their cost of living lower? No. Not in most cases. These other countries simply decided long ago that they would have a sound health care system for all their citizens.. Their governments were not beholden to health care lobbyists who were supported by Right Wing billionaires who do not want government to pay for anything. It should be clear by now to any intelligent American citizen that all the Super-rich want is more and more tax cuts until the country and simply gave the land to Americans, today’s billionaires will only endow entities that carry their names emblazoned on the side or on the entrance, simulating the idea that the building or the property, while public, actually belonged to them.
So, your total tax bill should be about a third lower–compared to your current tax bill plus your health care premiums. Remember that you will no longer pay health care insurance premiums. You will eventually just have a “Medicare for All” card and you can go in anywhere in the U.S., basically, and get treatment and pay nothing. You will already be paying for it in your taxes. In other words, you simply “have” health care services as part of being a citizen.
Your taxes, however, will be lower than your current tax bill plus any premium amounts you now pay. How much? Well…lower. All the experience with government health care systems shows that they are lower than what we pay in the United States. Is there cost of living lower? No. Not in most cases. These other countries simply decided long ago that they would have a good health care system for all their citizens.. And they did not have a government that was beholden to health care lobbyists who were supported by Right Wing billionaires who do not want a government in which they may have to pay higher taxes.
Unless you have an extremely high-benefit plan now, you should pay somewhat less. At this point one can only speculate on such things as supplemental plans and what will substitute for so called current “Cadillac” health care plans. What can be said is that, whatever a current plan costs, the costs should be lower for the same plan under Medicare-for-All. How can we be so sure that it will cost less and how can we be sure that it will not cost more? Well while the numbers are very large, they are not particularly complicated.
We’re a very rich country. The problem is that most people don’t realize that about 1% of all the people have about 95% of all the assets. Did they earn those assets? Well, somebody did. It may have been a railroad tycoon in the mid 1800s or a gunpowder manufacturer in the late 1700s, or, in some cases, it may have been an auto manufacturer or a computer manufacturer in the 20th Century. But one thing we know for certain is that about half of what original earner made was passed on (or will be) to their families. Many of those successor generations never worked a day for any of it. They started out rich and got richer. They make up a very high percentage. As we said, over 50% of the Super-rich in our current national economy started out by inheriting sizable fortunes.
The Super Rich can Afford it – Their Combined Wealth is Three Times the National Debt
Our national debt, about which we wring our hands annually, is roughly $21 trillion. That is equal to our annual total Gross National Product–$21 trillion. That’s a lot of money. But here’s an even larger amount: $97 trillion. That is the amount of private ownership of wealth—property, personal goods–in this country five times the national debt. But this wealth is not divided evenly. The rich have almost all of it. So the Medicare-for-All legislation proposes to tax the rich a tiny fraction of that enormous wealth, about 2%, to get several hundred billions to help get this thing going for the other 99% of working American taxpayers.
The transition from private, for-profit, health insurance to a government option will reduce billing costs for those making that change by about 25%. Families will be able to switch from their private plan to a public plan that will cost less by about 25% immediately. Nothing but billing will change. Individuals will remain with the same physician and hospitals and other services. Billing will be handled by “Medicare for All.” We know that government billing, like Medicare or the Veterans’ Administration, costs between 20% to 30% less than private health insurance.
In 2014, Senator Marco Rubio sponsored an amendment to the annual appropriations bill, which he could do because Republicans controlled government. His amendment discontinued funding for health insurance companies who had participated in selling health insurance at lower rates to poorer families because government was helping them break even with subsidies. Rubio and the Republicans ended those subsidies beginning in 2015.
Under the pre-Rubio Obamacare program, costs had been going down every year. Thanks to Rubio, premiums in 2015 skyrocketed in many areas. In other areas, like mid-Iowa, health insurance companies simply refused to sell any health insurance to anyone at all. Under the new “Medicare for All” legislation, however, costs will drop far more precipitously than even under pre-Rubio Obamacare because the “for-profit” companies will leave the system rapidly as customers opt for the better and cheaper public health care option. Rubio’s amendment caused many private health care companies to actually stop selling insurance in some states, leaving some Americans with no health insurance options at all.
Let’s stop for a moment for a reality check.. There are some very basic politics involved. The only way that this or any truly safe, universal health care plan can become law is to elect Democratic majorities in the House and Senate and preferably in the majority of state governorships, and—most importantly a President like Bernie Sanders or Elizabeth Warren. Republicans have never voted for affordable health care. They voted over 60 times to do away with even the modest Affordable Care Act (Obamacare.) They are paid now, and have been since 2009, hundreds of millions of dollars per year by the health care corporations in campaign contributions to help them maintain their atrociously high costs and their limitations on access to health care. Moreover, the Republicans, despite holding government from 1981to1993, from 2001 to 2009 and since 2016, have never—not once—offered a realistic national health care plan.
Political Donations From The Health Care Industry
The Democratic Party and Democratic Senators and members of Congress are the only politicians, including state politicians, who have always voted for better, less expensive, universal health care (In fact, anti-health care legislation is even a greater issue among Republican state legislators and Governors than their national representatives.) In all, Republicans have received over a billion dollars in campaign contributions from the health care industry to try to repeal Obamacare and to prevent Americans from having permanent, affordable access to doctors and hospitals. Only a completely Democratic government, top to bottom, will assure affordable, un-threatened, access to health care for all Americans.
Unfortunately, we can no longer point to Republicans as the loyal but honest opposition. It is obvious that this current political party, which votes in a solid bloc, like the old Fascist political parties of the 1930s, is corrupt—including the formerly contentious but fair Supreme Court, which is now a captive of carefully vetted pro-corporate, pro-Fundamentalist interests. Sad to say, this also includes the religious interests of the Conservative wing of the Roman Catholic Church. That aspect– of Conservative religion-in-politics—which Jack Kennedy fought so hard to keep separate, is now a part of the decision making by a majority of the nine justices of the Supreme Court, and all the Republican appointed justices, who are Roman Catholic.
Right Wing columnists have stated in their broadcasts that “Medicare for All” will not work because Medicare itself is too expensive. The facts are that “Medicare,” the administrative system, has remained pretty steady at costs of about 3%. Health care premiums have gone up because health insurance companies simply pass on bills from doctors and hospitals. They do no research to find more effective ways to handle medical situations. They get their 30% or more mark-up either way. It is the hospitals and medical schools that find better and less expensive or more efficient ways to deliver health care.
Medicare costs have not gone up. Medicare costs are reduced rates from doctors and others to America’s senior citizens. Medicare part D reduces some prescription costs. These costs are administered for 3% of the invoiced costs This billing cost has remained constant for the entire existence of Medicare. Private, for profit, health care costs, passed on to consumers by a private insurance industry that marks up every bill causes health care cost increases. While for decades the insurance companies have denied certain services and operations, that is a minimal contribution to cost reduction..if any reduction at all. Health insurance companies have virtually nothing at all to control costs. On the contrary, many people are getting rich on your health care premiums. CEOs of corporations that provide health insurance make an average of $14 million a year. You can imagine what other top insurance corporation executives earn.
“Soak” the rich? No. With their assets, not even a light rinse!
The “rich,” the top one percent, had a tax cut in 1981 of half their top income rate. Under Reagan, it went from 74% (which had been 97% under Eisenhower) down to 28%. That proved to be a almost fatal for the federal government. It tripled the debt under the Reagan Presidency alone. It raised the national debt from under a trillion to $2.14 trillion. Then, after another almost two trillion dollars in losses under the first Bush Presidency or a total of $4 trillion in debt, Clinton raised taxes. But before he could balance the budget, the national debt went to $5.16 trillion. Clinton raised taxes, and the top rate, by only 4%. He balanced the budget…country took in more than it paid out. He then returned money to U.S. citizens by repaying funds to Social Security that had been borrowed for tax cuts to the rich. He set the government on a path to solvency—no debt by 2011, according to the GPO, the official agency for determining U.S. budget and projections.
Then came Bush/Cheney. They immediately cut taxes, and despite the warnings of Bush’s own handpicked CBO Director, he was warned that the $5.16 debt Clinton left would rapidly grow. But they cut taxes for the rich again. Only this time they also spent like drunken sailors and used the Federal government like their own personal piggy bank. Cheney, for example, saw to it that his military contractor friends and former employers in Texas got $39 billion in war contracts. His own personal stock in that company rose from $44 million to an estimated $100 million. Under Bush/Cheney, billionaires and multi-millionaires saw a tax cut again as did corporations, who were actually encouraged to send jobs abroad to enrich themselves even further. Once again, under Obama, taxes went up very slightly, by allowing tax cuts to expire…again only 4 percent. Tax rates went from 35% under Bush to 39.4% under Obama but the net rate, the amount that those in the top bracket actually paid Uncle Sam was 23%.
Recovery From The Great Recession
From 2009 to about 2014, the U.S. population worked its way out of the Great Bush Depression. Despite almost constant obstruction, over 400 filibusters by Senate Republicans, the Obama Administration reduced unemployment from 10% down to 4% and reduced the annual deficits from over $1 trillion to under $300 billion This was a staggering economic achievement…with no Republican support whatsoever.
With a $7.25 minimum wage and unemployment high, the rich feasted on the misery of the Middle to lower classes. The bottom 90% of Americans suffered huge losses from the Great Bush (Cheney) Recession. They lost over $7.5 trillion in personal assets, like retirement funds, 401k funds, mortgages and savings. The difference between rich and poor grew wider. Many were out of work for six, eight, ten months. Some were unemployed for two years. Others would never hold a full time job again.
While prosperity has returned to the world economy since that difficult period in our history, most of what we call recovery and income and wealth, or net worth, has gone to the top 1% of Americans, increasing income and asset inequality. In fact, the data shows that inequality has grown much worse than even in the period known as “The Gilded Age,” a period immediately after the turn of the 20th Century and before the First World War. For example, the 4,000 top income families in 1900, had as much income as a group of 11,000,000. out of a population of 29 million.
Today, 100 years later, three families have as much accumulated wealth as the bottom half of the population, or approximately 160 million people. So, after subsiding in the middle of the 20th Century, the problem of income inequality has grown worse. It has been strengthened especially by the skill of billionaires in using their wealth to dramatically decrease their income taxes from a high top bracket of 97% down to a low of 28% (as this is written, the top rate is 37%. This results in an actual out-of-pocket tax bill of under 23% ) In other words, the very rich, who pay their taxes on capital gains and other non salaried income, pay amounts lower than others and far lower than the stated top rate on tax rate schedules.
To add some context, here are the top income groups and the average incomes. The very tip top of the income pyramid is occupied by what is considered the income elites…the top .1%. There are about 160,000 of them and they make an average of $6,700,000 per year. The next group is the top 1% you hear so much about. They comprise about 1.600,000 people and average about $1,400,000 per year. The next group is the top 5%, averaging about $490,000 a year, across a total of 800,000 families. The next group is the top ten percent This group averages about $322,000 a year and they are a group made up of 16 million families. Finally, we have the bottom 90 percent, or about 288 million people. And they average about $37,000 per year.
Now, there are factors that are normally involved with great wealth and almost none of them have to do with fairness or high intelligence or even hard work. Sometimes it is just plain dumb luck, like being born a Vanderbilt or a Rockefeller or a Gates or a Trump. Other times, it is genius at doing something, like starting a really efficient air shipping company or an online retailer. Whatever it is, the reasons for great wealth do not matter. The fact of human nature is that people with great wealth do not particularly want to share it with others. They do, of course. They may want to give it away. But they quite naturally resent the government’s taking it away. We call this “transfer payments.” This happens when individuals are taxed and the income to the government is given to someone else.
Redistribution of Income for Health Care
Transfer payments, or income redistribution, another term for them, might be exemplified by adding a percentage on to the top income tax rate and then using those extra funds to give desperately poor school children a hot lunch. Frankly, the government takes money from the extremely wealthy and gives it to someone else, often—but not always–the extremely poor. It is not voluntary. It is the will of the majority—some would say the “fiendish” will of the majority to redistribute income. So let’s talk about the redistribution of income to serve health care, and specifically to fund “Medicare for All.”
Here’s a pretty easy concept to understand. We have a country in which really good estimates are that about $97 trillion in hard assets resides in the possession of everyone. But the assets of U.S. citizens are not distributed evenly. They reside primarily in the hands of the top 1%. Now, a huge percentage, I’m just going to say about half…I won’t be far off…of the rich inherited most of their money. So, we can easily grab a small percentage of their money, can’t we? What do you think? I say yes. After all, they never earned it anyway.
Then we have the super-duper rich, those in the rest of the top 1% which would include the tip of the top. They have so much money, usually acquired in such large amounts that they might never know it was “redistributed.” (Think of ten per cent of $50 million. They can make that in one week if one of their stocks has a good run. That’s $5 million, which would be a lot more than we are asking for from them.) So, is this a tough concept? Well, not for some people. But the United States has a Constitution and many people believe that the foundation of that Constitution is that free people have a right to private property…a home, a car, a piece of land, or even a luxury watch. If you have ownership of things, basic things but also things of your choice, then part of that is your income…what you earn.
The other side of that coin is this: society needs money to run–roads and highways, public buildings, a judicial system, national security, and so on. Then there are things like water, and local streets, and airports. But in latter years, the fourth and fifth generations of this country, we ran afoul of both bad circumstances and bad people.
Bad circumstances came in the form of economic downturns and wars we didn’t want, and some we could have avoided–like World War II and the Spanish/American War. Bad people came in the form of very successful people who were perhaps merely corrupted by something new in the world. For the first time, men could become as rich as they wanted and keep almost all the money they earned, using labor that would have nothing at the end of their employment. Moral people became so outraged at this using up of human capital for the enrichment of a few, that society changed a little and then a lot. This was the result after an economic downturn came along, The Great Depression, and then a cataclysmic event, World War II.
Thus came about our current political philosophy, that some sharing of private property, the assessment of relatively small shares of all incomes to provide not only for public roads and buildings but also for the less fortunate, often the by-product of our dynamic economic system and our often biased, bigoted, and skewed social systems.
So, there you are. Shall we take 2 or 3% from the man who has $50 million (around $1 million to $1.5 million) in order to help us establish an eventually self-funding, tax-based health care system for these billionaires and their families, and for the top 5, 10, 50 and 100% of Americans? The amounts in question will provide hundreds of billions of dollars. Billionaires will eventually replenish all of whatever it costs. They will still have tax rates lower than any in the rest of the advanced economies. And the country will have health care, excellent health care, gradually lower and lower in cost, for everyone. This all makes sense. It is time to take this problem in hand and fix it once and for all, with a little help from the super-duper rich.