No, Medicare-for-All Wouldn’t Be a Tax Cut

We shouldn't need bad arguments to sell good policies.

tax taxes pig piggybank dollar signs chalkboard
Photo by GotCredit under CC BY 2.0 license from pxhere.

In “Make no mistake: Medicare for All would cut taxes for most Americans,” Berkley economists Emmanuel Saez and Gabriel Zucman make a bizarre and disingenuous argument to make an otherwise perfectly valid point.

The starting point of any intelligent conversation about health in America must be that it’s a cost for all of us – and a massive one. The United States spends close to 20% of its national income on health. Elderly Americans and low-income families are covered by public insurance programs (Medicare and Medicaid, respectively), funded by tax dollars (payroll taxes and general government revenue). The rest of the population must obtain coverage by a private company, which they typically get via their employers. Insurance, in that case, is funded by non-tax payments: health insurance premiums.

Although they are not officially called taxes, insurance premiums paid by employers are just like taxes – but taxes paid to private insurers instead of paid to the government. Like payroll taxes, they reduce your wage. Like taxes, they are mandatory, or quasi-mandatory. Since the passage of the Affordable Care Act in 2010, it has become compulsory to be insured, and employers with more than 50 full-time workers are required to enroll their workers in a health insurance plan.

This is just sheer and utter nonsense. Words have meanings. A tax, by definition, is paid to the government, with noncompliance punishable by said government.

Insurance premiums paid to private businesses are . . . insurance premiums. Yes, it was for a short time required under the Affordable Care Act to prove coverage or else pay a fine that was much, much smaller than the premium. The Supreme Court ruled, 5-4, that Congress had the power under the Constitution to do this because it was effectively a tax; they were wrong. Regardless, this provision has since been eliminated.

I find this frustrating not because I oppose Medicare-for-All but because, in adopting the absurd “tax” dodge, Saez and Zucman diminish what is actually a very powerful argument with which I very much agree:

A frequent objection to calling health insurance premiums a tax is that people have some choice. Can’t the poor, the argument goes, enroll in cheap health plans? If you start calling health insurance premiums a tax, then shouldn’t we also call spending on food and clothes a tax?

This argument, however, is wrong, because cheap healthcare does not exist. There are cheap meals, there are cheap clothes, but there is no cheap way to treat your heart attack, to cure your cancer, or to give birth. Cheap health insurance means no healthcare when you need it. All wealthy nations, even those that try hard to control costs, spend 10% of their national income on health – the equivalent of $7,500 a year per adult in the United States. The view that healthcare services are like haircuts or restaurant meals – services for which there is a product tailored to any budget – is a myth. Healthcare is like education: everybody needs it, regardless of their budget, but it’s expensive. That’s why all advanced economies, except the United States, fund it through taxation.

Perhaps because my dad was in the Army and I grew up taking it for granted that the kids of privates and colonels alike could go to the doctor (and even the dentist and optometrist!) whenever they needed, it has never made sense to me that access to healthcare should be based on the ability to pay. Even in my staunchest, most capitalist College Republican days, I thought the “America has the world’s greatest healthcare because of the free market” argument was absurd.

While I bristle at the Bernie Sanders stance that health care is a “right”—no one has a right to another citizen’s labor—I’m perfectly comfortable with the idea that all Americans deserve access. And that, because health crises are unpredictable and beyond the ability of even upper-middle-class people to absorb out of pocket, it requires a system of universal coverage to make that a reality.

Let’s just admit that we’re going to have to raise taxes, rather substantially, to do this. Like every other developed country on the planet.

Let’s not, by contrast, resort to absurd, inflammatory rhetoric like this:

The main difference between the insurance premiums currently paid by American workers and the taxes paid by workers in other countries is that taxes are based on ability to pay. The income tax has a rate that rises with income. Payroll taxes are proportional to income, at least up to a limit. Insurance premiums, by contrast, are not based on ability to pay. They are a fixed amount per covered worker and only depend on age and the number of family members covered. Insurance premiums are the most regressive possible type of tax: a poll tax. The secretary pays the same amount as the executive.

Paying for things based on what they cost isn’t a tax. And it sure as hell isn’t a poll tax. It’s a free market that we accept for virtually everything in society. But that, for reasons Saez and Zucman explain perfectly well without resorting to nonsense, doesn’t work for health care.

And the economic cost-benefit analysis stands perfectly well on its own without the outrageous “poll tax” nonsense:

Proposals such as Medicare for All would replace the current privatized poll tax by taxes based on ability to pay. Some believe that it would result in a big tax increase for America’s middle class. But the data show that it would, in fact, lead to large income gains for the vast majority of workers.

Take again the case of a secretary earning $50,000 in wage and currently contributing $15,000 through her employer to an insurance company. With universal health insurance, her wage would rise to $65,000 – her full labor compensation. With an income tax of 6% – which, if applied to a base large enough, would be enough to fund universal health insurance – she would have to pay about $4,000 more in tax. But the net gain would be enormous: $11,000. Instead of taking home $50,000, the secretary would take home $61,000.

In fairness, Sanders is already making this argument. Elizabeth Warren, to the exasperation of her competition, is refusing to acknowledge that people like secretaries would have to pay more tax—but save even more in premiums!—if her plan were passed into law. But it’s a perfectly sellable calculation.

I lack the accounting skills to assess this but it seems reasonable—if, again, we tune out the “premiums are a poll tax” nonsense:

On TaxJusticeNow.org, any interested reader can simulate the effect of replacing private health insurance premiums by taxes – progressive income taxes, wealth taxes, consumption taxes, or broad taxes on consumption or all of national income. This simulator that we developed is open-source, user-friendly, and based on a systematic exploitation of all available statistics about who earns what and pays what in taxes and health insurance in America.

As one illustration, it’s possible to see how the tax plans of the leading Democratic primary candidates would affect tax rates for each group of the population. For instance, Bernie Sanders’s tax proposals would be enough to replace all existing private insurance premiums, while leaving 2.6% of national income to cover the uninsured and spend on other programs. Under such a plan, the 9 bottom deciles of the income distribution would gain income on average, as would the bottom of the top 10%. With smart new taxes—such as broad income taxes exempting low wages and retirees—it is possible to make the vast majority of the population win from a transition to universal health insurance.

Granting that American political culture is built on an allergy to taxation, most Americans surely care more about how much they have left to spend with every paycheck than how much goes to the government vice an insurance company.

FILED UNDER: Bernie Sanders, Campaign 2020, Government, Health, Health Care, Taxes, US Politics
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. mattbernius says:

    James, as an aside, I remember all the back and forth you’ve had over the years with your readers on the issue of whether or not healthcare is a “right.”

    I just wanted to say that this is the clearest and best articulation of your position that I have read. I finally get where you are coming from and suspect that, based on your point about “access to healthcare”, the conflict much more of a philosophical one than a practical one (outside of implementation details) when all is said and done.

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  2. Hal_10000 says:

    The claim that people will pay less in taxes than they do in premiums is extremely shaky. Just looking on the issue from eight miles up, the idea that we will insure 10-15 million people, some of whom are at the more expensive end of the pool, and save money is extremely questionable. Even if you eliminate CEO salaries and profits, that’s only a few percent. To this point, everything we’ve been told would save money (“Fewer ER visits! Preventative care! Electronic records!”) has proven to be false.

    Universal healthcare is going to cost. It’s going to cost a lot. And the idea that this system will be incredibly efficient when it will have a budget equal to the GDP of Germany seems … sketchy at best (and mostly based on a failure to realize that Medicare does not actually run Medicare; the nuts and bolts are done under contract by private insurance companies). Countries that have universal healthcare system — let alone single payer — have MUCH higher taxes on the middle class than we do. The UK’s higher tax rate (40%) kicks in at 46,000 pounds. The highest rate (45%) kicks in at 150,000 pounds. That’s not to mention the VAT and national insurance.

    I’ve moved to a position of favoring universal coverage (but not single payer). But it’s going to cost a lot of money to do it and most of that money will come from the Middle Class. The Democrats do themselves no favors pretending otherwise.

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  3. steve says:

    Yes, they are reaching with this argument. I actually had one of the kids make a similar argument at a speech and debate tournament. Thought it was a reach then also. I think people who support M4A need concentrate on the money left in the pocket argument. However, if they want to make even that argument then they are going to have to give up on Sanders version. It would cost way too much. The Mercatus Institute (libertarian) projections predicted major overall savings, but only if you just extend current Medicare to everyone.

    Steve

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  4. Gustopher says:

    Warren has the problem that if she ever says “higher taxes” in any context, it will be taken out of context and repeated incessantly from that moment forward Without context. And she’s right, that’s just the America we live in.

    Meanwhile, the media really wants to get her to say the magic phrase, rather than doing substantive reporting.

    So, she needs to find a phrasing that cannot be cut up without losing meaning and dance around the issue. “Lower costs”, etc. And some of the supporters will bend definitions a bit, like your “premiums are taxes paid to a private entity” examples, all to avoid the dreaded words “much lower premiums and HIGHER TAXES”

    You’re smart enough to figure it out. Why do you need the magic words?

    Accept the minor fudge that is true in spirit, the same way other people used to accept some racist dog whistles in place of explicit racial epithets.

    (I think a much bigger, substantive problem is that however the taxes are structured, if you are suddenly running 20% of the economy through the government, there are going to be winners and losers — the current burden of payments is so haphazard that there’s no real alternative)

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  5. 1st time commenter says:

    James – you say “While I bristle at the Bernie Sanders stance that health care is a “right”—no one has a right to another citizen’s labor”. I agree with the sentiment, as I wouldn’t want someone claiming that I HAD to do work for them as a right. That said, how is this different from a “right” to public education, where the teacher’s labor is required to provide that right? Or do you not believe that is a right either?

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  6. Tyrell says:

    I have supported having Medicare as an option for those who need health insurance is a good option. That would have been simpler and cheaper than rolling out a completely new plan.
    People who like their insurance plans should be allowed to keep them. I think that the Medicare “penalty” should be done away with. People should not be penalized if they want to stay in the private market for a period of time.
    The more options we have the better.

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  7. gVOR08 says:

    Saez and Zucman did this for rhetorical effect. There is no deception, they were quite explicit about what they did. You agree with their point. And in your last graph you state why they did it. I’m failing to see the problem here.

    If you are explicit in your definitions, you can define words for purpose of discussion. I recently read Hayek, The Road to Serfdom. He does the same thing. He very carefully and explicitly defines “socialism” as “central planning”, end of story. Given his definition, it’s actually a pretty thoughtful book, albeit a bit dated. Throughout he says approving things about stuff we would regard as socialism, but fall outside his definition. If you see a modern conservative quote The Road to Serfdom he almost certainly missed the point.

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  8. DrDaveT says:

    It’s a free market that we accept for virtually everything in society.

    While I can agree with the letter (if not the spirit) of the rest of your argument, James, this is just false. Health care provision in the US is nothing like a free market, and you would hate it much more if it were. Once we all admit that it’s a heavily regulated public utility, we’ll be better able to regulate it efficiently and effectively.

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  9. Nightcrawler says:

    here is no cheap way to treat your heart attack, to cure your cancer, or to give birth. Cheap health insurance means no healthcare when you need it

    This is what most Americans fail to understand. There will never be such a thing as discount chemotherapy, discount radiotherapy, discount mastectomies, etc. because every cancer is different. Every breast cancer is different, every lung cancer, every testicular cancer, etc. There are dozens of variables that go into cancer treatment. It cannot be mass-produced. I’m a breast cancer survivor (2 years out from NED), and I learned this the hard way. I sincerely had no idea just how complex this was until it happened to me. I also had no idea it could happen to me, as I had zero risk factors. I learned that ~70% of cancers have no known etiology.

    And that’s just cancer. The same goes for spinal cord injuries, lupus, and every other major illness, and it’s major illnesses that cost. Not sore throats and upset tummies.

    I agree with you that healthcare is not a “right.” Instead, it’s a public good. There is no “right” to a public K-12 education, but we’ve decided to provide it because it’s a public good to ensure that as much of the population as possible is functionally literate and can count.

    All that said, I don’t see Medicare for All or any other form of public healthcare happening in the U.S. in any of our lifetimes. There are too many people who are viscerally against it. They also think that they’ll never become seriously ill or injured because that only happens to bad, stupid, and lazy people who make “bad” decisions, and they make “good” ones.

    I’ve encountered a lot of those people in my cancer support groups: “But I don’t understand how this could have happened. I’m vegan/a non-smoker/a non-drinker/a fitness fanatic/a fitness trainer/have no family history/insert reason here.”

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  10. James Joyner says:

    @1st time commenter:

    That said, how is this different from a “right” to public education, where the teacher’s labor is required to provide that right? Or do you not believe that is a right either?

    In that context, I treat it as a “right” in the same way as the 6th Amendment’s “right” to counsel. No one has the “right” to attend a private school or to the services of any given attorney. But they have the right to access certain government services under certain conditions.

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  11. Nightcrawler says:

    As I said, it won’t happen in my lifetime (especially not mine, unless I become a millionaire), but if I were in charge, I would start with Australia’s system as a model and go from there:

    https://www.bupa.com.au/healthcare-guide/what-is-australias-healthcare-system

    Reader’s Digest version: Essentially, it’s a hybrid system where everyone is covered for a small tax and small co-pays. Everyone pays in except for people who are indigent. There are both public and private hospitals and providers. Private insurance is totally legal and available if you want perks, such as a private hospital room or quicker service for non-urgent procedures. If you buy private insurance, or your employer offers it, you’re rewarded with x percent off your taxes.

    I’m sure an Australian could explain it a lot better than I just did.

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  12. James Joyner says:

    @DrDaveT:

    While I can agree with the letter (if not the spirit) of the rest of your argument, James, this is just false. Health care provision in the US is nothing like a free market, and you would hate it much more if it were

    Oh, we fully agree on that. I’m making a very narrow response to a specific argumentative point: that having to pay a set price for something, rather than based on what one can afford, amounts to a tax. No, it doesn’t.

    @gVOR08:

    Saez and Zucman did this for rhetorical effect. There is no deception, they were quite explicit about what they did.

    The first may be true; the second certainly isn’t. They don’t claim that they’re arguing for effect or reasoning by analogy. They don’t even argue that paying for healthcare insurance amounts to a tax. They declare, flat and simple, that it’s a tax. I find that it obscures their argument rather than enhancing it.

    @Nightcrawler:

    I agree with you that healthcare is not a “right.” Instead, it’s a public good. There is no “right” to a public K-12 education, but we’ve decided to provide it because it’s a public good to ensure that as much of the population as possible is functionally literate and can count.

    Yes. I prefer this formulation as well.

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  13. Nightcrawler says:

    @James Joyner:

    Exactly. There’s no “right” to public emergency services (fire, police, etc.) either, nor a “right” to free weather forecasts from the NWS. However, we’ve decided that it’s a public good to provide these things.

    I hate the “rights” argument because I think it muddies the debate. It’s one of the reasons why nothing will change in our lifetimes. Obamacare will be struck down, and we’ll go back to the way things were before it, with some changes. It will be even more difficult to qualify for Medicaid, for example; it will be block-granted out, and states will have years-long waiting lists like they do for Section 8 housing. If you’ve got cancer, too bad, so sad, but the cold, hard reality is that nobody cares except for you and maybe, if you’re lucky, one or two people who are close to you. Hopefully, one of those people earns millions and can pay to save you — or at least euthanasia will be legalized so that you can pay to end your pain quickly, the way you currently could if your dog or cat had cancer and you couldn’t afford to treat it. (This is what I’m hoping for. I may never need to exercise that option, but I want it there just in case.)

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  14. Teve says:

    “you don’t have a right to someone else’s labor” invalidates all taxes for everything and is therefore a bad argument.

    In that context, I treat it as a “right” in the same way as the 6th Amendment’s “right” to counsel. No one has the “right” to attend a private school or to the services of any given attorney. But they have the right to access certain government services under certain conditions.

    And among those services should be basic healthcare.

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  15. Slugger says:

    I don’t do well with arguments over abstractions like whether healthcare is a right.
    I was on the board of an insurance company once. Healthcare expenditures track closely with age. They are low and stable with a steep rise after age 75. The 65-75 demographic is actually pretty cheap compared to the later years. Likewise care for people under our current medicare age is not that expensive. From age 15 to 65, I needed stitching up in the ER on two occasions and otherwise simply didn’t need medical care. Similarly, the vast majority of younger people can be brought into medicare with little expense; the major expense is maternity which we already pay for in various social safety net programs. For young men, much expense comes from employment related things that we already fund through workmen’s comp programs. Car wrecks we fund through mandatory insurance which I will resist calling a mandatory “tax” to avoid the dueling abstraction argument. I think that a great deal of universal medicare can be fairly cheap, and much of the expensive stuff is already being paid by our taxes in the form of welfare. Now, I recognize that we have developed major cultural, social, and political barriers which may be insurmountable, but I think the economic arguments are not convincing.

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  16. mattbernius says:

    @Nightcrawler:
    Really well started. Thank you for the public good argument framing.

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  17. Erik says:

    While I bristle at the Bernie Sanders stance that health care is a “right”—no one has a right to another citizen’s labor—I’m perfectly comfortable with the idea that all Americans deserve access.

    I’d just like to point out that people already have, under this formulation, the right to medical care via the government enforced labor by physicians due to EMTALA. This is the law that requires hospitals and physicians to provide emergency treatment to patients without regard to ability to pay. It solved the problem of indigent patients (or those that appeared indigent) being shuffled from one emergency department to another and having bad outcomes, but since it is an unfunded mandate it did so in the backs of the hospitals and physicians.

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  18. James Joyner says:

    @Erik: Fair point. But, essentially, we’ve made provision of emergency service a requirement for licensure.

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  19. Michael Reynolds says:

    Angels dancing on the head of a pin. Effectively health care is a right because the people see it as a right.

    Back when Obama was elected we used to debate the health care issue a lot at Schuler’s blog. My position then – and now – was that the important thing was simply to move health care from being ‘someone’s problem’ to being ‘the federal government’s problem.’ Once that was accomplished, by whatever plan, it would be irreversible and people would begin treating it as a right.

    Now the debate centers entirely on how the federal government can do a better job of protecting this right for more Americans. Notice that? Notice how we aren’t even hearing a peep of a more conservative approach? Notice how all the polls show support for the federal role, regardless of party or ideology?

    Now we are down to details. O’Care 1.0? O’Care 2.0, with a public option? Medicare for all who want it, vs. Medicare for all? And what aren’t we seeing? Trumpcare. Republicare. The Overton Window has shifted and it isn’t shifting back. As I (ahem) predicted. What did not happen was the endlessly predicted massive rise in costs as Obamacare came on line.

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  20. James Joyner says:

    @Michael Reynolds: Aside from the rights/public good question, there’s little doubt that a program wenother perceive as being paid for by someone else is going to be more popular than one we perceive we’re paying for. The weirdness—and tragedy/shame—of the existing system is that the only ones who really pay for healthcare are those who can least afford it. A huge swath gets government-paid care, whether because they’re old, work for the military or other government agency that pays most of the costs, or qualify for Medicaid. Most of the rest of us pay a relatively small monthly premium that’s heavily subsidized by our employer and minimal out-of-pocket expenses. The latter works pretty well but is enough of a pain in the ass—not to mention cost-inefficient—as to be inferior in most ways to the former.

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  21. Mister Bluster says:

    Trumpcare
    “I thought that when I won (the election) I would go to the Oval Office, sit down at my desk, and there would be a healthcare bill on my desk, to be honest. And it hasn’t worked out that way…”
    Reuters

    Dumb as a box of rocks.*
    *(He probably thought that there would be coverage for that too.)

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  22. Kurtz says:

    “… No right to someone else’s labor.”

    This argument strikes me as simplistic to the point of becoming meaningless.

    People sell their labor to their employer. It is no longer their labor.

    In this specific example, the service is provided by a hospital or practice which employs helathcare workers who provide their skills and knowlege. Healthcare institutions must comply with regulations regarding quality of care, who they must treat and who they can turn away. However, the employees have no say in this because the employer controls their labor.

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  23. Just nutha ignint cracker says:

    @Gustopher: I think he needs the magic words because he, as Matt Bernius points out, is philosophically rather than economically opposed to universal access to healthcare but doesn’t want to hear himself say

    people who can’t afford treatment will just have to die.

    (On the other hand, when I was a young right-wing nut job–back in the days when I would have told my gender dysphoric son to man up and quit being so queer (to harken back to yesterday’s thread)–I had no problems saying that at all. Conservatives–especially Fundy/Evangelical ones–were tougher then. Fortunately, I’ve become wiser and feel less threatened (by lots of things) since then.)

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  24. Just nutha ignint cracker says:

    @Tyrell:

    I have supported having Medicare as an option for those who need health insurance is a good option.

    Open question: how many employers are going to keep health insurance as a benefit once Medicare as an option for those who need health insurance becomes policy? My guess is that even–maybe especially union contract industries will tell their employees “go on strike if you want, but health insurance is never coming back.”

    And if you think M4A is going to be expensive with employers paying taxes to support it, imagine what it’s going to cost with employers paying nothing for it.

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  25. An Interested Party says:

    It’s a free market that we accept for virtually everything in society.

    And yet, so much in our society isn’t a free market at all…from rent-seeking to politicians crafting legislation to favor certain groups at the expense of other groups, the free market is often more of an idea than a reality in our society…

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  26. Gustopher says:

    @Just nutha ignint cracker:

    I think he needs the magic words because he, as Matt Bernius points out, is philosophically rather than economically opposed to universal access to healthcare but doesn’t want to hear himself say

    “people who can’t afford treatment will just have to die.”

    Assuming I have not gotten confused, and you are attempting to summarize our esteemed host’s position, I am nearly certain that is not his position.

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  27. Gustopher says:

    We shouldn’t need bad arguments to sell good policies.

    But, alas, we do.

    If the good policies involve nuance, and nuance is impossible in modern discourse, then they have to be explained in an over-simplified manner that is thematically correct even if wrong on the details.

    Similarly, if you believe that healthcare isn’t a right, but that it is a public good that should be made accessible to all… you basically believe healthcare is a right. Yes, you have a nuanced position that is different but leads to the same result, but to a rough approximation, you believe healthcare is a right. Or the people who say they believe healthcare is a right roughly believe it is a public good that should be made available to all.

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  28. Jim Brown 32 says:

    If we spent a 10th of the energy spent on the insurance side to address costs—many of complexities if Americans receiving care would disappear. Providers, Insurers, Pharmacuticals, and equipment manufacturers are price gouging. Period. This is no different from the cost of College…firms will charge more if they can and as long as they can.

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  29. GregHW says:

    The author, it seams to me, is arguing with himself.

    He states that insurance premiums are not taxes objecting to another writer stating that premiums are “like taxes” in that both are required costs with the only difference being whom they are paid to. And that is correct from the point of view of personal budget making. No one’s checkbook cares who gets paid as long as the money spent was necessary and no more then necessary, and the numbers balance at the end of each month.

    The author goes to say that calling premiums tax would validate (perhaps tongue in cheek) that we should call money spent on food or clothing as a tax, and he is right IF the issue was public financing of food or clothing, but it is not. The issue is public funding for health care. Thus pointing out the absurdity of using “tax” for spending for food and clothing payments is a needless distraction and smells of the Reductio ad absurdum Fallacy (or Strawman Fallacy if serious).

    I would hope that a writers here would avoid the incorporation of fallacies in their writing, if not their thinking.

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  30. An Interested Party says:

    Providers, Insurers, Pharmacuticals, and equipment manufacturers are price gouging. Period. This is no different from the cost of College…firms will charge more if they can and as long as they can.

    Isn’t it a shame that the federal government can’t directly negotiate for things like drug prices…we wouldn’t want to stifle all that important research…tsk tsk…

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  31. Just nutha ignint cracker says:

    @Gustopher: If, in fact, our esteemed host’s position is a philosophical one–as Mr. Bernius, and now I, am asserting–while he may not want to be on record as holding such a position as the one that I suggested, I don’t see how his position can be otherwise. If healthcare shouldn’t be a right–and our host admits to “bristling at” Sander’s assertion that it is–then people who can’t afford treatment will either need to rely on the good will of others who will pay for it or, in the absence of that gift, die. I don’t see another option, but if you do, by all means demonstrate it.

    “I don’t believe that health care is a right” means something significant in terms of policy. It means that people get coffins/cremation instead of treatment. I’m okay with this; everyone dies of something. Others seem not to be, but the words mean what they mean.

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  32. Just nutha ignint cracker says:

    @GregHW: That would be nice, but it’s really hard for faulty or fallacious thinking to not appear in one’s writing, too. Intelligence simply doesn’t work that way.

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  33. Tyrell says:

    @Just nutha ignint cracker: If I could afford it, I would drop my Medicare plan and go to a private insurer. The problem is that if I decide to go back on Medicare then I have to pay a penalty. Imagine -saving the taxpayers a little money and you get penalized for your trouble. My plan is better than some – I get the Part B for free, and free membership at almost any gym.I still might look around for alternatives in the private companies.
    My prescription is cheaper if I pay it myself instead of running it through the plan. Try to figure that out.

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  34. Andre Kenji de Sousa says:

    @Just nutha ignint cracker:

    Open question: how many employers are going to keep health insurance as a benefit once Medicare as an option for those who need health insurance becomes policy?

    Most of them, specially if there is some tax deduction or credit for doing so. That would not be an issue, there are far larger issues for M4A: what Bernie Sanders and Warren wants would have to go beyond simply nationalizing the health insurance industry, it would require states and municipalities to setup their own public healthcare systems. No Federal Republic implemented single payer without support from states and municipalities, and that would include Idaho and Alabama.

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  35. Michael Reynolds says:

    @Tyrell:
    What? Are you drunk? You want to give up Medicare and pay premiums? Dude, if you’re old enough to qualify for Medicare the only reason any private insurer will even touch you is the Obamacare makes them. But believe me, you don’t want to see what it will cost. You’re approaching the time of life when probably 90% of your lifetime medical expenses will occur. You think a private insurer will give you a deal when all they see in your future is operations, recoveries, therapies and drugs that will cost them north of 100k?

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  36. Just nutha ignint cracker says:

    @Tyrell: “My prescription is cheaper…” goes with the nature of co-payment. In some plans, “paying the first $x (usually 5 or 10) of the price” sets a floor of that price for any prescription. I’ve had situations where I was paying $10 to the plan for items that would have been $8.50 direct from the pharmacy. Also, what a pharmacy charges makes a difference. I use a medicine for which the Medicare.gov site tells me (if I do a deep enough dive) ranges among pharmacies in my area between $25 and 137 for a 30-day supply. Who knew?

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  37. Just nutha ignint cracker says:

    @Andre Kenji de Sousa: Even with a tax credit or deduction, if the corporate tax rate is 30%, $30 in savings requires a $100 expenditure and various sources show that even passing some of the cost back to the employee, health benefits are as much as 40% of the total wage package. Eliminate health care and staffing costs cut almost in half. Big incentive.

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  38. DrDaveT says:

    @James Joyner:

    Oh, we fully agree on that. I’m making a very narrow response to a specific argumentative point: that having to pay a set price for something, rather than based on what one can afford, amounts to a tax. No, it doesn’t.

    …And I’m pointing out that it’s a bit ironic for you to misuse a phrase like “free market” in the course of complaining that these authors are misusing the word ‘tax’. They, too, are making a “very narrow response” to a particular question. Why is it OK when you do it, but not when they do it?

    Also, just to be clear — what makes it for all intents and purposes a tax is not “having to pay a set price for something, rather than based on what one can afford”. It’s not having the option to not pay for it that makes it equivalent to a tax. I’m not sure where you got this idea; some taxes (e.g. income tax) are based on ability to pay; some (e.g. sales tax) are not. Insisting that the money that comes out of my paycheck to pay for Medicare is a tax but the money that comes out to pay for my private insurance premiums is not a tax (even though it has exactly the same economic function) is missing the forest for the trees.

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  39. JKB says:

    Similarly, the vast majority of younger people can be brought into medicare with little expense;

    That’s the theory behind Obamacare. Force coverage on low-risk younger people who will pay premiums higher than their risk-profile would mandate so that more normalized, lower, premiums could be charged to the old and infirm with a healthcare higher risk-profile.

    People didn’t like that.

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  40. JKB says:

    @Kurtz: People sell their labor to their employer. It is no longer their labor.

    Well, except in a few old systems, such as the military, employers cannot compel someone to work except via ongoing mutual agreement of wages for time/effort. You cannot even force someone to continue to provide labor under a contract, although monetary compensation for failure to perform can be assessed.

    There have been recent exceptions to the force labor restrictions, such as the baker forced to decorate a cake for an event against their religious beliefs. I do not know if on-site catering services were also required for delivery, set up and serving.

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  41. Just nutha ignint cracker says:

    @JKB: That’s the theory behind Obamacare National Defense. Force coverage on low-risk younger people protection on parts of the nation that will be harder to attack who will pay premiums taxes higher than their risk-profile would mandate so that more normalized, lower, premiums taxes could be charged to the old and infirm with a healthcare large affluent cities and productive agricultural zones with a higher national defense risk-profile.

    See how that works? Those variations used to be called “the price of citizenship/nationhood” until libertarianism came along. (But back in the day, I’m sure your great, great grandfather was writing to the editor of the local news paper complaining about how many people didn’t like spending money on forts to protect the settlers in the territories, too. 😛 )

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  42. Kurtz says:

    @JKB:

    Work is, for most people, not in the least bit “voluntary.” you have to do something. Changing jobs entails various costs that your view ignores.

    Regardless of this, your point is totally irrelevant to the issue at hand. The claim was that no one has a ‘right’ to someone else’s labor. Rare is the person who, in the course of producing, has not sold their time, effort and some amount of freedom in exhange for money and benefits.

    The implied theft doesn’t exist, as they are also selling their right to object to providing their labor.

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  43. rachel says:

    @Nightcrawler: That’s pretty much how the Korean system works.

    As an aside, I recently had a look at how my much my health insurance costs me. There are copays (or not) for various treatments as the need arises, and discounts applied at other times, but I pay 5% of my monthly salary into the government fund.

    What percent of y’alls’ salary goes to insurance companies up front?

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  44. Gustopher says:

    @rachel: Most people cannot answer that question, as a lot of it is taken out before it hits the paycheck.

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  45. Bob Hertz says:

    This comment by Saez and Zucman displays an ignorance of actual labor markets….

    Take again the case of a secretary earning $50,000 in wage and currently contributing $15,000 through her employer to an insurance company. With universal health insurance, her wage would rise to $65,000 – her full labor compensation…

    I have had two jobs since I turned 65 and went on Medicare. In each job, I went to the employer and asked for a higher wage, since I would not require their health insurance. In each case, I was told “No way.”

    Nonunion employers see health insurance as a bonus, not part of wages. In the example cited above they see the secretary as having a $50,000 job, They will not raise her wages if they are relieved from buying health insurance.

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  46. rachel says:

    @Gustopher: So is mine, but the amount is recorded in my remuneration file.

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