The fate of the latest GOP health bill is unclear. But whatever happens, it’s pretty clear Democrats in 2020 will propose single-payer as their option either to “repeal and replace” Trumpcare or to fix Obamacare.
Sen. Bernie Sanders is back at it, as he was in 2016, but this time he has friends. Sens. Cory Booker, Kirsten Gillibrand Kamala Harris and Elizabeth Warren — a quartet of potential Democratic presidential candidates — are among those who signed onto Sanders’ bill. It’s the latest sign of how far to leftward the Democratic Party has moved even since 2008.
It should also be a sign of madness.
First, there’s the cost of Sanders’ bill. Last year, the left-leaning Urban Institute scored his plan. The bottom line: $1.9 trillion more in federal spending in the first year, and $32 trillion more over the first 10 years.
Single-payer advocates usually interrupt here to note this increase in federal spending would be offset by a decrease in health spending by state and local governments, private employers and households. This is only partially true.
The Urban Institute estimated spending on those who already have insurance would actually rise by 15.5 percent in the first year. In fact, of the $412 billion in higher spending nationwide that year, almost two-thirds would go to the already-insured.
That’s a cost of $265 billion, in one year, for the insured, in the name of helping the uninsured.
Of course, an implicit part of the plan is we won’t actually pay for all that spending. If you take every tax proposal Sanders has made to pay for his plan, you only come up with half of the money needed. Some $16 trillion over 10 years would be piled onto the national debt — above and beyond the trillions we’re already slated to borrow.
The reason for this is clear to anyone who understands the European welfare states Sanders & Co. want to mimic. In short, those countries pay for universal health care by soaking the middle class in a way Democrats won’t, or at least won’t yet admit.
Why? The same reason Willie Sutton robbed banks. That’s where the money is.
Take the European countries people most often cite in these discussions (I’m using the 15 nations that were members of the European Union before it expanded into Central and Eastern Europe in 2004). The average social-insurance taxes on employers and workers in those 15 countries, for people earning the average wage, is 32.3 percent. In the United States, it’s 15.4 percent.
But that’s just one aspect. The uses of those tax revenues vary by country, so it’s important to look at all of what the taxman takes in these countries as a percentage of total labor costs, known as the tax wedge. For someone earning the average wage in the EU-15, it’s 53 percent. In the United States, it’s 43.6 percent.
Now here's something truly crazy: Sanders proposes to increase our tax wedge above the EU-15 average, with a new 7.5 percent employer payroll tax and a 4 percent surcharge on households, among other levies. And yet, he still can only pay for half of the thing.
So, here’s single-payer in a nutshell: More spending on those who already have insurance. More taxes, and yet more debt as well. And a government monopoly on a deeply personal matter.
What (else) could go wrong?
