Senator Bernie Sanders (I-Vt.) thinks the Republican health care plan is going to fail, but he has a plan. The sometimes-Democrat from The Green Mountain State announced that after the presumed defeat of the Republican bill, he intends to introduce legislation to make “Medicare for All” the national health care system of the United States.
“We are going to introduce it literally as soon as we’re through with this debate. I don’t want to confuse the two issues,” Sanders said on CNN’s “State of the Union.”
Sanders said that the initial phase of his plan would lower Medicaid eligibility to age 55, but would ultimately expand to cover all Americans. “Longer term, we need a Medicare for all,” Sanders said.
Sanders has been talking about universal Medicaid for years. The further expansion of Medicaid was a plank of Mr. Sanders presidential platform in 2016. Details of the plan are still available on BernieSanders.com. Last March, after the Republican bill failed its initial vote in the House, Sanders raised the prospect of introducing his Medicaid plan to the Republican-controlled Congress.
“President Trump, come on board. Let’s work together,” Sanders said in Politico at the time. “Let’s end the absurdity of Americans paying by far the highest prices in the world for prescription drugs.”
Sanders claims that his plan would save the typical middle class family more than $5,000 in annual health care costs. In reality, the plan would shift costs from insurance premiums to private companies to healthcare taxes paid to the government. Families would pay a 2.2 percent tax and employers would pay a 6.2 percent payroll tax for the health insurance. The increase in payroll taxes would likely translate into lower wages.
The Sanders plan contains a long list of other taxes that would be increased to pay for his healthcare plan as well. These include increases in the income tax, the dividend tax, the capital gains tax and the estate tax. He would also limit deductions for households earning more than $250,000 per year.
What would Americans get for their money? The Sanders plan does not go into detail about what the expanded Medicaid would cover or out-of-pocket costs such as deductibles and coinsurance, but there are well-known problems with Medicare. The government only reimburses doctors for part of their costs in treating patients. Under the current system, states pay for Medicaid services and then the federal government reimburses the state for a percentage of its Medicaid costs. Forbes notes that Medicaid pays less than private insurers at the same time that Medicaid patients take more time than other patients. Increased paperwork and delays in payment mean that many doctors limit access for Medicaid patients or don’t see them at all. FactCheck.org estimates that only about 70 percent of the nation’s doctors participate in Medicaid.
Despite Sanders’ claims that expanding Medicaid would save money, the plan merely shifts the burden of paying for healthcare to the states and the federal government. Already, Medicaid is the second largest budget item for most states, only coming in behind education spending.
When states face budget crunches, a common response is to cut reimbursement rates. These cuts can cause increase in wait times for treatment, lead to higher out-of-pocket costs for patients or even cause some providers that rely heavily on Medicaid funds to go out of business.
With Republicans in control of both Houses of Congress, the Sanders plan for national Medicaid will be dead-on-arrival when he submits the bill. However, if Republicans fail to reform the health insurance system, the threat of single-payer from leftists like Bernie Sanders will not go away.