Bernie Sanders’ ambitious plan for universal healthcare would need $16.6 trillion more in tax revenue to pay for it, according to a new analysis.
The center-left think tank Urban Institute found that Sanders’ plan would need additional taxes and would hit doctors and hospitals with lower payments. However, the plan would extend healthcare coverage to the nearly 30 million people who don’t have it and completely overhaul the U.S. healthcare system by getting rid of Obamacare and the private health insurance system.
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The Urban Institute found that Sanders’ plan would raise $15.3 trillion in revenue from 2017 to 2026. However, the amount is “$16.6 trillion less than the increased federal cost of his healthcare plan.”
To fund universal healthcare, Sanders is proposing a 6.2 percent payroll tax and 2.2 percent income surtax on taxable income.
The payroll tax could affect wages as employers may shift some of the burden of the tax onto workers, the analysis found.
So low-income workers, like other workers, “would in fact bear some of the costs of financing the plan,” the institute said.
Overall, national health spending would increase by a total of $518.9 billion, or 16.9 percent, in 2017, the analysis found. It would increase by 16 percent from 2017 to 2026.
Under Sanders’ plan, the federal government would bear the brunt of healthcare spending and states and local governments would spend far less.
Overall, state and local governments could save up to $4.1 trillion from 2017 to 2026, the think tank said.
Since the plan would eliminate private health insurance, households and employers would pay less as the federal government absorbs more of the costs. For instance, private-sector spending would drop by $1.7 trillion in 2017 and $21.9 trillion to 2026.
“These considerable savings would partially offset the impact on the private sector of new taxes,” Urban said.
The analysis details other issues with a single-payer system, including hospitals and doctors getting paid less.
Hospitals would see only a small effect since Medicare and Medicaid patients would pay more and get payments from the newly insured. However, providers would “receive less revenue for providing care to those who would otherwise be privately insured,” the analysis said.
The analysis estimate that physician incomes would be “squeezed” by the new payment rates as they would be lower than privately insured rates.
