A plan to provide free healthcare to all along the lines of what has been proposed by Vermont Sen. Bernie Sanders and endorsed by Democratic front-runner Massachusetts Sen. Elizabeth Warren will now cost $34 trillion over a decade, according to a new estimate from the liberal Urban Institute.
The think tank authored a much-cited study that pegged the cost of the Sanders 2016 campaign proposal at $32 trillion, but four years later they have determined that his updated plan, which includes enhanced benefits, would cost the federal government even more.
The new study evaluates several different Democratic proposals to expand coverage and describes one approach that is consistent with the one being pushed by Sanders and Warren that promises broad health, vision, and dental coverage for everybody with no premiums or deductibles. It finds that it would dramatically increase federal spending “by $2.8 trillion in 2020, or $34.0 trillion over 10 years.”
To put that number in context, it would be more than 17 times what Obamacare added to federal spending in its first decade of full implementation. Between 2020 and 2029, the federal government is projected to collect $26.8 trillion in income taxes from individuals and corporations — thus, doubling income taxes on individuals and businesses would still leave a hole of over $7 trillion.
The largest tax increase Warren has proposed is a wealth tax she claims would raise $2.75 trillion, which wouldn’t even cover the hole leftover after doubling income taxes. But it doesn’t matter anyway, because Warren has already pledged to use the wealth tax to pay for universal child care, universal pre-K, raising child care worker pay, free college, and canceling student loan debt.
In Tuesday night’s debate, Warren and Sanders both pushed back against rivals who were arguing for alternate approaches to expand coverage that would not involve kicking most Americans off private coverage, and they stated that the only acceptable way to address healthcare was to put everybody on a single government plan, which they argued would reduce overall costs.
However, this study also found that even after accounting for the fact that the federal government would be absorbing costs currently paid by states and households, overall health spending in the United States “would grow by about $720 billion in 2020.”
It’s also worth noting that this estimate assumes the new government-run plan would be able to pay close to Medicare rates to doctors and hospitals, which are less than what they are paid by private insurance. But if that were the case, it would cause massive disruption to medical providers who could find it unprofitable to operate, thus creating access problems just as tens of millions of people would be gaining unlimited coverage. Were payment rates to be higher, the $34 trillion price tag would go up.
