Why is Medicare for all bad? (1 Viewer)

[Tau837]

I don't know how detailed you want me to be. I generally try to elect people who direct professionals in accomplishing these administrative details. Depending on how much you make, your taxes may (will probably) go up more than your insurance costs may decrease. And vice versa. Ditto for employers. 

If we're going to haggle forever about the kinds of "details" you're worried about, we'll always be too paralyzed by fear to even take the first step. And if we don't ever take the first step, then the existing health care system in this country is gonna break us. It's unsustainable in its present form. We don't have to reinvent the wheel, either. There are road maps out there.

The bolded just isn't true. Show me a road map for:

1. Converting a system like ours -- a mix of private and public healthcare -- to a complete Government healthcare system...
   
2. ...in a system of Government like ours...
   
3. ...in a country with a population of 327M people...
   
4. ...with the level of population diversity as exists in the US (which affects healthcare costs).
   

You can't, because there isn't one. We will have to create something unprecedented.

I'm not against working to define and implement a better system. But I am against doing it without a proper understanding of how it will be implemented, how much it will cost, and how those costs will be covered. Problem is that either no one has sufficient details, or they are unwilling to publish them because they are so unappealing.

 

[The Commish]

Genuine question....what is the average % of income one pays yearly in their healthcare costs including premiums, deductibles etc?

 

[Bottomfeeder Sports]

The article is using a bunch of true statements to misrepresent the costs.  Over ten years when NHE almost doubles if we do nothing (3.5 to 6 trillion) makes the annual number just under 50% higher than the actual current numbers.

If I am understanding you correctly, I don't think this is true. For example, the Mercatus study linked and discussed on the previous page shows that CMS projects NHE at $4.5T and Federal healthcare spending of $1.7T in 2022. So Federal healthcare spending is projected to be about 38% of NHE. That is very similar to the ratio over the 10 year projections identified in the article.

So using  the 10 year projection does not change anything about ratios.

Agreed that the ratios don't change, and I'll even agree that most people don't really know how much the federal government takes in (and how) nor spends.  But, still if I took your bills and added 50% to one of them and told you that is what it will cost it does mess with one's perspective.

Where the 6 trillion comes from...

Historical NHE, 2017:

• NHE grew 3.9% to $3.5 trillion in 2017, or $10,739 per person, and accounted for 17.9% of Gross Domestic Product (GDP)
  

Projected NHE, 2018-2027:

Under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for 2018-27 and to reach nearly $6.0 trillion by 2027.

 

[Bottomfeeder Sports]

Genuine question....what is the average % of income one pays yearly in their healthcare costs including premiums, deductibles etc?

As worded I think about 10.1%.  But healthcare is about 18% of the economy so "in full" the answer is going to be around that number.

 

[The Commish]

As worded I think about 10.1%.  But healthcare is about 18% of the economy so "in full" the answer is going to be around that number.

So then we need to figure out that 8% right?

 

[Bottomfeeder Sports]

So then we need to figure out that 8% right?

The 8% (or close to it) is what the average income earner is already paying in taxes for Medicare, Medicaid, ACA, VA, etc.  Except that this currently has some state and local taxation which would need to be somehow changed to federal this is the easy part.   

Figuring out how to redistribute the 10% is the hard part.  Not so much conceptually as you just  "change 'premiums' to 'taxes'", but politically.

There are also some other components being ignored such as worker's comp or charity care but I think they are mostly "easy also" - at least in relative terms.

My complaint with the article listed isn't that this will all be easy.  It is that the number ignore what is already being paid.   If we are spending 18% of GDP on healthcare today and one third of that is already from the federal government how can we need 25% more on all income?   If I'm not mistaken personal income is roughly 85% of the total GDP  and of course a good bit of that is not subject to income taxes so maybe the 25% comes from math such as  [(1/.85) * (1/.55) * (2/3 * 18)].  I guess!  But that is still wrong as 45% of the population not paying income taxes doesn't mean that 45% of income is not taxed but it got me near 25%. 

 

[Tau837]

In 2017, here was the breakdown on NHE:

• 28.1% Federal Government
  
• 28.0% Household -  includes employee contributions to employer-sponsored private health insurance premiums, directly purchased health insurance, the medical portion of property and casualty insurance premiums, employee and self-employment payroll taxes and premiums paid to the Medicare HI Trust Fund, premiums paid by individuals to the Medicare Supplementary Medical Insurance (SMI) Trust Fund, premiums paid for the Pre-existing Condition Insurance Program (PCIP) for 2010-2014, and out-of-pocket health spending
  
• 19.9% Private Business -  includes employer contributions to employer-sponsored private health insurance premiums, employer Medicare Hospital Insurance (HI) Trust Fund payroll taxes, workers' compensation, temporary disability insurance, and worksite health care
  
• 17.1% State and Local Government
  
• 6.8% Other Private Revenues -  includes health-related philanthropic support, non-operating revenue, investment income, and privately-funded structures and equipment
  

So in an extreme version of M4A, where no private insurance remains, it would seemingly be necessary to do the following:

1. Convert that 28% of household spending on premiums and healthcare expenses into new taxes of some kind. Projecting NHE in 2020 at $4.1T, that means collecting $1.15T from households. With approximately 127M households, that implies collecting an average of $9K per household in new taxes using 2020 projections. Two negatives here (depending on one's perspective):
   
   Obviously, some households would pay less, some probably zero, while others would therefore have to pay more, aligned in some manner with income levels.
   
2. Many households are not spending as much on healthcare expenses as they would be forced to spend on these taxes, creating a lot of financial losers. This is one reason why any detailed plan will be unpopular with a large segment of the voting population.
   

[*]Convert that 19.9% of business spending to new business taxes.

1. 
   Obviously, not every business currently provides healthcare insurance for their employees. There is also a spectrum of the caliber of coverage provided; some companies provide lesser care than others. Consequently, this would stand to be a huge financial hit to some companies, especially small businesses.
   
2. How to deal with this? If the answer is to exempt businesses on one end of the spectrum, like personal income, it would force stepped tax levels based on defined metrics (number of employees, annual revenue, annual profit, etc.). Like personal income, this implies that many businesses will pay more under this new system than they pay currently. How will this impact the economy? This is another reason why any detailed plan will be unpopular with a large segment of the voting population.
   

[*]Convert that 17.1% in state and local spending to Federal spending somehow.

[*]Convert that 6.8% in other private revenue to... what? More taxes? Maybe the philanthropic component would continue? Not sure I understand this element well enough to see what would be done here. It sounds trivial at 6.8%, but we are talking about $279B in 2020.

Bottom line, I do not think doing this is as easy as many people make it out to be.

 

[The Commish]

The 8% (or close to it) is what the average income earner is already paying in taxes for Medicare, Medicaid, ACA, VA, etc.  Except that this currently has some state and local taxation which would need to be somehow changed to federal this is the easy part.   

Figuring out how to redistribute the 10% is the hard part.  Not so much conceptually as you just  "change 'premiums' to 'taxes'", but politically.

There are also some other components being ignored such as worker's comp or charity care but I think they are mostly "easy also" - at least in relative terms.

My complaint with the article listed isn't that this will all be easy.  It is that the number ignore what is already being paid.   If we are spending 18% of GDP on healthcare today and one third of that is already from the federal government how can we need 25% more on all income?   If I'm not mistaken personal income is roughly 85% of the total GDP  and of course a good bit of that is not subject to income taxes so maybe the 25% comes from math such as  [(1/.85) * (1/.55) * (2/3 * 18)].  I guess!  But that is still wrong as 45% of the population not paying income taxes doesn't mean that 45% of income is not taxed but it got me near 25%. 

Yeah...I follow what you're saying.  I think if they insist on going to this M4A concept it is absolutely critical that they explain what the net "out of pocket" expenses per month are going to be.  It needs to be explained in terms like "Yes, your taxes are going up on average $10,000 a year, but you are no longer responsible for the $12K a year you are paying in premiums netting you $2K a year. "  or whatever the figures end up being.  Of course, I don't believe for a second that the Democrats will get anywhere near success on this so I honestly don't know why they are so focused on "pie in the sky" wishes.  With the Senate the way it is, I don't think there's even room for a public option.  I think the GOP is perfectly content using the US population as political pawns on this policy issue.  They have no interest in making things better for individuals.  It's all about the companies for them, regardless how far this country is slipping in our collective health.

 

[Bottomfeeder Sports]

In 2017, here was the breakdown on NHE:

• 28.1% Federal Government
  

So this is already part of the "general revenue".  Already paid by taxes.

• 17.1% State and Local Government
  

While not federal, so is the above.  And while all states aren't equal and the types of taxes aren't the same so there will be some winners and some losers here in shifting meaning the politics are hard, this is still already paid for in taxes.

• 28.0% Household -  includes employee contributions to employer-sponsored private health insurance premiums, directly purchased health insurance, the medical portion of property and casualty insurance premiums, employee and self-employment payroll taxes and premiums paid to the Medicare HI Trust Fund, premiums paid by individuals to the Medicare Supplementary Medical Insurance (SMI) Trust Fund, premiums paid for the Pre-existing Condition Insurance Program (PCIP) for 2010-2014, and out-of-pocket health spending
  

This list includes lots of things.  Some of which ("employee and self-employment payroll taxes") are already taxes  (ignoring the self employed  and the .9% bump complication about 128 billion in 2017 or about 13% of this total - 28% of 3.5T is just under 1T.)   

But the rest fall under @The Commish's need for it to be really laid out.  And even once that is done and it is shown (presumably)  that most people make out in taxes replacing existing premiums and out of pocket spending as well as find hidden savings on other forms of insurance it is a tough sell to a change averse electorate.  Especially since lots of the benefits will need be over one's lifetime rather than necessarily in the here and now.

• 19.9% Private Business -  includes employer contributions to employer-sponsored private health insurance premiums, employer Medicare Hospital Insurance (HI) Trust Fund payroll taxes, workers' compensation, temporary disability insurance, and worksite health care
  

This is where implementation rather than "selling politically" it might start getting hard.   I say that because this is all really employee compensation that isn't included in the gross pay value for employees.  And it is where employees doing the same job for the same "base pay" are compensated differently based on the employer shares of things.  Ideally I would think we wouldn't have any of this "paid by employers" but would all roll into the employees compensation and then be taxed from there.  But that is a tough transition in a short window of time.

Now most of the individual items are easy as payroll taxes, workers' comp, etc.  are already pretty much taxes.   But untangling employer shares of single, single with children, couple, family seems difficult to do and explain.  But all of this in aggregate is just changing where the check is mailed - except maybe worksite health.  

• 6.8% Other Private Revenues -  includes health-related philanthropic support, non-operating revenue, investment income, and privately-funded structures and equipment
  

With the possible exception of charity care I don't think any of this is a concern.  I'd guess that the vast majority of philanthropic support is supporting research for diseases and conditions that individuals are concerned about curing or eliminating.  

I'm guessing we don't disagree too much here.  We just disagree on whether saying 25% increase in federal income taxes without subtracting out what goes away really represents the costs.  

Oh to run the 2017 numbers to get the ratios.

We have 3.5 Trillion in total.   We can subtract the 28.1% or 983 billion already in federal.  We can also subtract 255 billion in payroll taxes.  That leaves about 2.3 trillion shifting to the fed.  255 is conveniently about 1/9 of 2.3 trillion.   A payroll tax of about 3% pulled in the 255  so I can see how payroll taxes might go up 27%  or a even a bit more.  Maybe even the 32% if there are enough surcharge dollars that its really 3.5%   But that is without a single offset for lower state and local taxes, the elimination of all premiums, reduction in other insurances, etc.   We have this big scary exaggerated "new taxes" number as if it is new cost -"what would it cost" with barely a foot note that this all cost we already pay.   The issue isn't how much we will be taxed as we already are, but how we are taxed (and thus who is taxed what).

Of course now that I think about it,  moving all of those senior's Medicare premiums and out of pocket to payroll taxes they largely don't pay might just be the winning selling point.   

 

[The Commish]

As we talk through the presentation here, how do we include the freedom of insurance not being tied to your job any longer or that your employer will no longer be the sole decision maker on your insurance possession etc?  Seems like the flexibility of it not being tied to employment becomes a significant bonus that people overlook and if we're being honest this is a huge win for the "but what about the poor businesses" type guys.

 

[msommer]

Agreed that the ratios don't change, and I'll even agree that most people don't really know how much the federal government takes in (and how) nor spends.  But, still if I took your bills and added 50% to one of them and told you that is what it will cost it does mess with one's perspective.

Where the 6 trillion comes from...

Interesting that healthcare expenses are rising faster than GDP. That seems (pun intended) unhealthy

 

[the moops]

I am likely in the minority, but I would gladly pay more in taxes (even if my new tax bill is more than my current insurance premiums + tax) if it means I know longer have to deal with my employer's open enrollment fiasco. I am quite tired of going back and forth between my insurance to my wife's insurance back to my insurance as both our life situations change and/or our employer changes.

I know the Obama quote of getting to keep your doctor gets ridiculed, but my family is not alone in having had to change insurance carriers multiple times over the the past several years - that had nothing to do with Obamacare. It was either because of employment changes, family changes, or employer changing their offerings. I actually don't particularly care about keeping the same doctor (at this point we are all healthy and only go for yearly checkups/vaccines or the random office visit for a one-off sickness) but what I do care about is not having to spend so much energy comparing plans, finding a close by clinic, navigating what my insurance will actually cover, etc., etc.

 

[Tau837]

Of course now that I think about it,  moving all of those senior's Medicare premiums and out of pocket to payroll taxes they largely don't pay might just be the winning selling point.   

This is a good point that illustrates another reason why there will be financial losers. Essentially, the working population will have to cover all of the costs for the elderly they already cover as well as the cost of all of their supplemental insurance and out of pocket costs.

The US population is around 325M, but there are only about 157M tax-paying Americans in the workforce. So the financial burden will fall disproportionately on them rather than on the 168M non-working Americans. It already does, of course, but this only stands to make it worse.

 

[Tau837]

As we talk through the presentation here, how do we include the freedom of insurance not being tied to your job any longer or that your employer will no longer be the sole decision maker on your insurance possession etc?  Seems like the flexibility of it not being tied to employment becomes a significant bonus that people overlook and if we're being honest this is a huge win for the "but what about the poor businesses" type guys.

I agree this is a positive about M4A. This issue has definitely affected my career choices as a result of my wife being disabled. But while that issue would go away for us, I am quite certain that M4A would negatively impact her healthcare. So that is not a worthy tradeoff for us.

I don't agree with the bolded statement. No one's employer is the sole decision maker on their insurance today. Any citizen can buy insurance in the private market/ACA. A move to M4A would seem to actually reduce choices available to many Americans, since it would create a true sole decision maker.

 

[Bottomfeeder Sports]

This is a good point that illustrates another reason why there will be financial losers. Essentially, the working population will have to cover all of the costs for the elderly they already cover as well as the cost of all of their supplemental insurance and out of pocket costs.

The US population is around 325M, but there are only about 157M tax-paying Americans in the workforce. So the financial burden will fall disproportionately on them rather than on the 168M non-working Americans. It already does, of course, but this only stands to make it worse.

I would be stunned to see supporters of M4A suggesting a highly regressive payroll tax to pay for it.  While I agree with you that you need to tax income (or consumption) and not just the 1 percenterrs to get there I just don't see this being any more than existing highly regressive premiums.

But of course remembering that seniors vote it is going to be a tough sell to have 401K withdrawals taxed at much higher income rates than would have happened when the money was saved or having the whole "double taxation" of a consumption tax.   Again, my issue with the "scare" articles has never been about this being politically easy, but focusing entirely on costs without offsetting savings. 

Oh, and I think one way to sell this is to keep on labeling premiums as premiums rather than taxes.  Politicians discovered long ago that "user fees" go over much better than "taxes" even when the only difference is the title.  

 

[The Commish]

I agree this is a positive about M4A. This issue has definitely affected my career choices as a result of my wife being disabled. But while that issue would go away for us, I am quite certain that M4A would negatively impact her healthcare. So that is not a worthy tradeoff for us.

I don't agree with the bolded statement. No one's employer is the sole decision maker on their insurance today. Any citizen can buy insurance in the private market/ACA. A move to M4A would seem to actually reduce choices available to many Americans, since it would create a true sole decision maker.

I get this is technically correct, but is it really honest as a matter of practicality?  It seems abundantly clear that employer subsidized healthcare is more affordable across the board than going it alone.  I'm sure there are some exceptions, but I'm willing to bet they are few and far between.  This is exactly why I think the public option solution makes the most sense.  You'd actually be able to see and prove that it was perceived as "better" or "worse" by the individuals based on their actions of either staying with their company healthcare or going with the gov't subsidized healthcare.

 

[the moops]

 I am quite certain that M4A would negatively impact her healthcare.

Why do you assume this? Is it because you have super top of the line health insurance currently?

 

[Tau837]

 I am quite certain that M4A would negatively impact her healthcare.

Why do you assume this? Is it because you have super top of the line health insurance currently?

She has coverage through my employer-provided healthcare as primary coverage and through Medicare as secondary coverage, since she is disabled. I assume the combined coverage is greater than the coverage that would be provided by Medicare only.

Of course, I pay a portion of my employer-provided healthcare premiums and she pays for Medicare premiums. But even if all of those premium costs plus all of our out of pocket costs went away, I expect we would be a financial loser in this swap, because I expect my tax increase would be greater than those savings.

But I was really talking about her healthcare. She is an outlier in terms of her health, treatments, and medications. Some of them are extremely expensive (but covered by private insurance). I am certain that if her private coverage was eliminated, Medicare would not cover everything that is currently covered for her. I suspect that some things would be eliminated that are crucial to her limited quality of life, and I think it is very possible that she would eventually end her life as a result.

 

[Tau837]

I get this is technically correct, but is it really honest as a matter of practicality?  It seems abundantly clear that employer subsidized healthcare is more affordable across the board than going it alone.  I'm sure there are some exceptions, but I'm willing to bet they are few and far between.  This is exactly why I think the public option solution makes the most sense.  You'd actually be able to see and prove that it was perceived as "better" or "worse" by the individuals based on their actions of either staying with their company healthcare or going with the gov't subsidized healthcare.

All fair points.

 

[beef]

14.5% of my total employee cost (salary + employer paid costs/benefits) goes towards healthcare premiums.  Which ends up being about 5% of my paycheck.  If Medicare-for-all can match that % of what comes out of my paycheck I'm totally on-board.  I'd even be willing to have a little more come from my paycheck if it saved my employer some money and helped give coverage to others.       

 

[Sand]

I went to a fundraiser for the YMCA this weekend and part of it was exotic cars. Got to see various 200-400K cars owned by local physicians. As I am struggling to pay for employee healthcare it kind of chaps my ###. 

Statistically ~75% of these vehicles are leased, i.e. rented.  You'd be shocked to hear how many of these "high income" folks are paycheck to paycheck.

While innovation may suffer, why is everyone convinced we can’t maintain a pool of excellent physicians with reduced compensation? Med school applications are near all time highs, with more than enough qualified applicants. 

Because the AMA is the most effective union shop in the US.  They control the schools and the MD population.

 

[stlrams]

All fair points.

What’s the economic impact of Medicare for all?  I read thats roughly 600k job loss just for heathcare companies and if you expand workers compensation that’s significant. 

 

[Sand]

Doctors here make more than those in many other countries.  For example, doctors in China see twice as many patients a week (150+) but they make much less than teachers.

I wasn't disagreeing - just pointing out there are definitely efforts to control supply to ensure that those with the degrees have their income expectations met.

 

[Terminalxylem]

Because the AMA is the most effective union shop in the US.  They control the schools and the MD population.

Not sure what your point is - I think there will be plenty of competent people lining up for med school even if MD salaries are cut. And I'd be shocked if the AMA reduced training positions in the face of worsening physician shortages.

 

[timschochet]

So why is Medicare for All bad? 

The biggest most immediate reason is this: fear of it might help give Trump a second term. 

 

[parasaurolophus]

I am likely in the minority, but I would gladly pay more in taxes (even if my new tax bill is more than my current insurance premiums + tax) if it means I know longer have to deal with my employer's open enrollment fiasco. I am quite tired of going back and forth between my insurance to my wife's insurance back to my insurance as both our life situations change and/or our employer changes.

Right here with you. I hate the annual changes. Premiums escalate each year but it is a new way each year. Deductible might go up a bunch, but there are reward activities to bring it down. If we use the health concierge service to book, we get a discount. If we use tier 2 instead of tier 1 we get a discount. But then the next year this all changes again as the company goes out to bid. More paperwork, more work, etc etc.

I would pay 2k more a year net to simply just be able to go to the doctor when I need to and not have to freaking jump through 37 hoops every single year. 

 

[timschochet]

I would pay 2k more a year net to simply just be able to go to the doctor when I need to and not have to freaking jump through 37 hoops every single year. 

The problem is that in order to get to that point we’re all going to have to go through years of chaos. And during the chaos the goal you’re looking for will he only a promise, not a guarantee. 

 

[parasaurolophus]

The problem is that in order to get to that point we’re all going to have to go through years of chaos. And during the chaos the goal you’re looking for will he only a promise, not a guarantee. 

I don't actually believe we can get to that point.  

 

[timschochet]

I don't actually believe we can get to that point.  

I’m not sure we can either. Who knows? 

My feeling is this: for the foreseeable future Medicare for All is politically impossible. Voters needn’t fear a Warren or Sanders Presidency for that reason, because there are simply not enough votes in Congress to pass it and that’s not changing. 

However, we’re also not getting rid of that part of Obamacare which does not allow greater charges for pre-existing conditions. That’s politically untenable as well. And so long as we have that, our current system is unsustainable long term. 

So where does that leave us? The easiest, laziest solution, which is the one that politicians almost inevitably take, will be to ignore the problem until it gets too big, and then simply throw enough money at Obamacare to make it work another 5 or ten years. Rinse and repeat. Eventually we’ll get to the point to where we’ve thrown so much money at Obamacare that Medicare for All becomes viable. But who knows when? 

 

[Navin Johnson]

What’s the economic impact of Medicare for all?  I read thats roughly 600k job loss just for heathcare companies and if you expand workers compensation that’s significant. 

Insurance providers are not health care companies.

 

[stlrams]

Insurance providers are not health care companies.

I understand that which is why I said healthcare companies like Aetna, Cigna, WellPoint blue cross, etc  In addition, if Medicare for all includes workers compensation it collapses the vast majority of insurance companies since workers compensation represents 60% of premiums.  

 

[The Z Machine]

Those displaced workers can get job retraining. Perhaps they can become nurses and actually contribute to providing health care services.

 

[sporthenry]

So why is Medicare for All bad? 

The biggest most immediate reason is this: fear of it might help give Trump a second term. 

Well which Medicare for All are we talking? Where everyone is guaranteed at least minimum coverage? Or single payer, no private insurers, we’re all on the same system?

If it’s the latter, why should everyone have the same plan? That is pure socialism at its core in perhaps the most important aspect of life. So you’re going to tell people they have to pay more into a system but their quality of care will be the same? I could make comparisons to other parts of life where this would seem absurd. 

 

[Terminalxylem]

Those displaced workers can get job retraining. Perhaps they can become nurses and actually contribute to providing health care services.

Amen. Too many parasites in the healthcare industry.

 

[timschochet]

Well which Medicare for All are we talking?

At this point it doesn’t matter. I believe just the term itself, “Medicare for All” will lose the Democrats Wisconsin, Pennsylvania, and Michigan, which means the election. The message from Kentucky and Virginia’s elections on Tuesday was: protect Obamacare. That works. 

 

[urbanhack]

New study:  https://www.norc.org/NewsEventsPublications/PressReleases/Pages/millions-of-americans-donate-through-crowdfunding-sites-to-help-others-pay-for-medical-bills.aspx

One in five Americans reported that they or someone in their household have contributed to a crowdfunding campaign to pay for medical bills or treatments, according to a new AmeriSpeak® Spotlight on Health survey from NORC at the University of Chicago. Crowdfunding is the process by which individuals may raise funds from a large amount of people, often through sites such as GoFundMe.

8 million Americans have started a crowdfunding campaign to pay for medical bills or treatment -- while more than 12 million have started a campaign for someone else.  Combine this data and report with the fact that nearly 60% of all personal bankruptcies are a result of medical bills and expenses and where does that leave us?  What possible changes to our current system are going to reduce cost and provide an affordable solution for the entire country? 

 

[roadkill1292]

Well, I have learned only recently that we can't have things like universal health care coverage because we are too big and too diverse as a nation. But somehow we cobble together the world's largest and most effective military machine.

 

[urbanhack]

Well, I have learned only recently that we can't have things like universal health care coverage because we are too big and too diverse as a nation. But somehow we cobble together the world's largest and most effective military machine.

And corporations don't have to pay taxes so shifting that burden to the middle and working class is also what makes us great.