October 22, 2019 | Reading Time: 2 minutes
Quick Take: M4A’s unseen flaw?
I don't think anyone's talked about this. Thoughts?
Writing can feel like a solitary exercise but it isn’t really. Not in our connected age. For that, I’m grateful. After I wrote today about why Elizabeth Warren should never ever say that she’s going to raise taxes to pay for universal health care, I read this:
“If the Democrats run on Medicare for All, we will lose in a landslide. You cannot plan to rob every full-time worker in American of a significant part of their total compensation (the health insurance employers subsidize) and get elected.”
That comment came from Burgs. I don’t know his, her or their real name. But I do know that’s a great point I haven’t heard much about. Warren and others supporting universal health care are right to talk about costs more than taxes. I don’t think anyone, however, has addressed this problem: the appearance of a pay cut.
Like or not, our economic system care has priced-in the cost of health insurance into the price of labor. If I’m right, and I’m open to correction, the program of universal health care that the Democrats are talking about might eliminate that cost, and in doing so give the appearance of a pay cut, even though there would be no such cut. You would still be taking home the same wages. Your gross pay would just be smaller.
As I said, open to correction. Maybe I’m overthinking this. What I do know is that I haven’t seen anyone debate this even on the level of political optics. Thoughts?
—John Stoehr
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An equally large problem is that employers are not likely to pass on the savings they’d accrue from not having to buy insurance. That’s not how capitalism works.
Great point.
They should get taxed, tho.
This is the issue. It’s a pay cut that will NEVER be gotten back. It’s literally a subtle, yet permanent pay cut to every full-time worker in America. This fraction of worker’s compensation will be eliminated and will never be gotten back and the American worker will never be made whole.
Further, after this disastrous pay cut, another Trump can always come along and destroy the system 4 years later. M4A will not work. It is suicidal electoral policy.
When you combine this with Democratic debate participants raising their hand to cover the healthcare of illegal immigrants, you get a truly toxic policy that will decimate our nominee’s chances of election.
Sanders has been messaging this exact cost transfer for some time. 2 debates ago, in the post-debate interview, he was asked “aren’t you going to raise taxes to fund your Medicare for all plan?” He appropriately responded (and I’m paraphrasing), “Stop it with this Republican talking point. The reality is you’re already paying for your healthcare through employer-deducted premium with co-pays, deductibles and other expenses on top. I don’t know what you call those insurance costs but I call them taxes! All I’m doing is transferring those payments from employer deductions to Medicare for all deductions.” This is a VERY difficult talking point for the average American who doesn’t pay much attention to understand: Medicare for all isn’t a new tax. It’s a transfer of to whom you already contribute for your healthcare.
That portion of compensation that comes from your employer paying part of your costs will be gone forever. The union at Harvard imputes a value of over $27,000 a year for my wife’s health insurance. That $27,000+ dollars will just be gone. It’s not something I can support. It’s not a reasonable or intelligent plan.
Disagree. The question was about whether or how to message how the plan will be paid for. The only thing the average American cares about is his/her tax contribution — which is a transfer. The more integrated answer, obviously much more complicated, comes with a substantially reformed corporate tax code, which will recoup the current employer contribution component. Warren has clearly laid out her plan for that, basing it on SEC stated profits and not IRS filings). Is this politically feasible? That’s another question entirely.
That money will be gone forever. We all know how the world works. Then, a person like Trump can always come along 4 years later, lay waste to the system, and then you’ve lost your compensation and your healthcare. Not something I can vote for. I’m not suicidal.
I’m no policy expert and also not an eyes closed dolt. However, I believe we must move to a healthcare system that covers everyone (call it what you like) and find a way to fund it. Like with already granted similars (social security, Medicaid, etc.), the GOP can try though the broader public will not allow them to renege — Trump laments so often that he tries and tries but has been surprisingly ineffective at dismanteling ObamaCare despite having a GOP-controlled Congress his first 2 years. My only concern is that we’ll destroy the current drug development model, globally 80% funded by the U.S., if we don’t find a global solution (meaning ROW pays more) for prescription drugs.
I agree that people need to be covered. But I also think there are far better, more marketable, and less disruptive ways to accomplish that goal. I don’t think M4A is the correct answer to our current situation.
I’m an activist for M4A, and I agree that the movement needs to do deep education about what it will mean for people who now have excellent health insurance as part of their compensation package. We need a real plan that describes the incremental steps that are necessary to get to Medicare for All, that addresses the question of what will happen to people who have good health insurance now. Here in California, the California Physicians Alliance (caphysiciansalliance.org) is working on a Road Map that will get California to universal coverage, and then single payer, over time. The administrative changes to get paychecks into the pockets of doctors, nurses, etc. must be figured out and implemented; this can’t happen overnight. We also need to be sure that people know that our systems of care (Kaiser cares for about 25% of Californians) will remain in place, and we will *still* be able to choose our providers.
I’m so glad you jumped in. The world needs more people who know what they are talking about!