Healthcare is one of those areas where America’s unhealthy obsession with low taxes is actually hurting the average worker. Data shows that when comparing the cost of premiums to the cost of Medicare for All, the expanded coverage could end up saving money elsewhere.

In the debates in Detroit, Michigan last month, Senators Bernie Sanders (D-Vermont) and Elizabeth Warren (D-Massachusetts) had to defend Medicare for All from what Sanders characterized as right-wing talking points — that the middle class would pay higher taxes to cover their new healthcare. That argument leaves out the fact that American workers already pay an exorbitant amount for health insurance and that premiums are growing faster than incomes.

If what Americans paid in insurance premiums — nearly a third of household income — was added to their taxes, the American worker would pay the second highest tax rate in the world, trailing only the Netherlands. This is despite the current burden many Americans already experience in having to contend with premiums, as well as costly copays, high deductibles, and the ever-increasing cost for prescription medications.

Instead of the unified, government-provided healthcare system that exists in other developed countries, Americans get their healthcare typically from one of four sources — government-sponsored Medicare for the elderly or disabled, government-sponsored Medicaid for the poor, employer-provided healthcare for those who have a benefits package as part of their compensation for work, and individual plans usually purchased through Affordable Care Act exchanges. Some of these plans can cover spouses and children as well, slightly extending their coverage.

This forms a patchwork system that leaves an increasing number of Americans uninsured. This group is most susceptible to significant healthcare debt despite experiencing no major healthcare issue. For families that do experience a serious illness or the death of a family member, healthcare debt can be an even greater burden.

The cost of employer-sponsored healthcare — the cheaper of the two non-governmental options — is estimated at between 26% and 30% of wages. This is a far cry from the proposed 2% premiums paid by households under Medicare for All. According to Sanders’ Medicare for All plan, the tax increase would be offset by better coverage, more stable coverage for those currently on employer plans or Medicaid, and an end to premiums for employer plans and individual plans.

Discussion about the increase in taxes to offset Medicare for All that fails to factor in the financial benefit of easing the strain of premiums paints a false picture of the potential impact of Medicare for All on working families.

The right-wing Mercatus Center found that a progressive healthcare policy like Medicare for All could reduce overall healthcare spending in the United States by at least $1 trillion in the first ten years, assuming the projected cost of Medicare for All at $32.5 trillion is correct, and comparing that to current U.S. healthcare expenditures. While federal health expenditures would necessarily increase, the decrease in overall expenditures could be made possible by the government taking a more active role in healthcare.

When considering the actual impact on pocketbooks, the reality is that Americans are already paying some of the highest taxes in the world and that our healthcare system appears to be both expensive and in many cases inadequate. Staying the course under the current system is not only leading to more Americans without healthcare coverage, but is also resulting in the continued growth of the cost burden to working families.


(Featured image: Creative Commons)


Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.



  1. This article more clearly explains the true and real cost of healthcare insurance in the USA. I hope more people will watch and understand why Bernie Sanders plan will reduce our cost and improve our healthcare.

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