Yesterday CNN hosted a town hall meeting in New Hampshire that featured a question and answer session from Democratic presidential candidates former Secretary of State Hilary Clinton and Vermont Senator Bernie Sanders.
During the town hall meeting, Sanders’ defended his Medicare for- all single payer program that raises taxes for Americans while providing universal coverage and eliminating healthcare premiums and co-pays.
Sanders’ plan has roots in socialism and would make the federal government the sole health insurer across the country if it is lucky enough to pass through a skeptical Congress.
Sanders explained yesterday to a New Hampshire citizen at the town hall meeting that his new healthcare plan would raise his own taxes by $500 but also reduce his healthcare costs by $5,000.
Sounds good? Right? Not so fast.
The framework of Sanders’ Medicare for- all single payer program is facing serious fact checking questions from Committee For a Responsible Federal Budget that recently threw some cold water on Sanders’ claims and offered an alternate analysis from respected health care economist Ken Thorpe of Emory University and UMass-Amherst economics professor Gerald Friedman.
Sanders’ campaign estimates that his new health care proposal would save the healthcare system approximately $6 trillion over 10 years which some economists seriously doubt and scoff at.
Sanders health care plan would be financed by a variety of new taxes on employers, investors, estates, American workers, and wealthy Americans.
According to the Committee For a Responsible Federal Budget, Sanders new health care proposal would increase the federal government’s costs between $3- $14 trillion.
The Committee estimates Sanders proposed offsets “would cover only three-quarters of his claimed cost, leaving a $3 trillion shortfall over ten years.”
Sanders may also be understating the cost of his plan, by more than $1 trillion per year, according to health economist Kenneth Thorpe who believes that Sanders’s plan (revenue included) could end up costing as much as $14 trillion more than he estimates over a decade before interest or economic impact.
A number of the revenue estimates provided from the Sanders campaign appear to be over inflated.
The Committee For a Responsible Federal Budget explains that Sanders campaign estimates that the 6.2 percent payroll tax and 2.2 percent income surtax combined would generate $8.4 trillion over ten years.
However, the Congressional Budget Office (CBO) estimates that a 1 percentage point payroll tax increase would raise $800 billion over 10 years and a 1 percentage point income tax increase would raise less than $700 billion over 10 years which means that Sanders’s increases actually amount to less than $7 trillion total over ten years.
The tax increases that Sanders is counting on may not increase as much as he forecasts and Republicans are not likely to embrace his ambitious health care proposal.
Unrealistic Tax Increases
Currently, household income is taxed at 33 percent above $250,000, 35 percent above $413,000, and 39.6 percent above $467,000.
Based under the Sanders plan, he would increase tax income to 37 percent above $250,000, 43 percent above $500,000, 48 percent above $2 million, and 52 percent above $10 million.
The Committee For a Responsible Federal Budget states that Sanders Medicare for all single payer program could result in an 85 percent top tax rate and drive debt to 100 to 150 percent of GDP in 2026.
“Sen. Sanders’s single-payer plan proposes a top income tax rate of 52 percent along with 8.4 percent of income-based premiums. Add this to the current 3.8 percent Medicare rate, Sen. Sanders’s proposed 0.2 percent payroll tax for paid family leave, and Sen. Sanders’s proposed 12.4 percent tax increase for Social Security (from eliminating the cap on income subject to the Social Security tax) and it leads to a top federal rate of about 77 percent. When state and local taxes are included, the top rate rises to an average of about 85 percent – far above the revenue-maximizing level” the Committee For a Responsible Federal Budget wrote in their analysis.
Although Sanders has shown a commitment to pay for the costs of his health care proposal, his numbers simply don’t add up and the Committee For a Responsible Federal Budget has raised some legitimate concerns.
Based on the research of the Committee For a Responsible Federal Budget, it appears that there are some gaping holes in Sanders new health care proposal and it may not be as legitimate as his campaign claims.