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Medicare-for-All is Not a Fantasy

In recent weeks several prominent Democrats have renewed the call for “Medicare for All” that Sen. Bernie Sanders highlighted in his 2016 campaign for the Democratic presidential nomination. This has drawn pushback from billionaires and potential presidential candidates Howard Schultz and Michael Bloomberg, who insist the country can’t afford it. Since it’s likely to be a major issue in the presidential campaign, it is worth looking at the question more closely.

First, many countries do have national health care insurance along the lines advocated by proponents of Medicare for All. The list includes Canada, France and Denmark, among others. These countries all have healthy economies, with living standards comparable to those in the United States. In fact, in all three countries, a higher percentage of prime-age workers (ages 25 to 54) are employed than in the United States. Like all countries, these countries have some economic problems, but it is absurd to claim that the cost of providing universal health care is destroying their economies.

Their health care systems also have comparable outcomes to the United States. This means not only do people live as long (actually they live somewhat longer on average), but people with health conditions such as cancer or heart disease on average do as well in countries with universal coverage as in the United States.

Having government-guaranteed medical coverage does cost money, and in all the countries with universal coverage, people do pay a larger share of their income in taxes. However, the necessary increase in taxes to provide universal care may be less than many people would fear.

First, most working people are paying something like a tax for their health care insurance since they get it through their employer. Employers don’t provide insurance as a gift, and premiums for insurance come out of workers’ wages in the same way that a tax would come out of those wages.

According to the Kaiser Family Foundation, the average employer payment for a family plan was more than $14,000 last year. Last year, this employer payment came to more than $900 billion. That’s more than $2,700 for every person in the country. Most workers would probably not object if their employers paid this money to the government for universal coverage as opposed to an insurance company.

The other key point is that we pay close to twice as much for our health care as the average person in other wealthy countries. According to the Organization for Economic Cooperation and Development, we paid $10,200 per person for health care in 2017. Canada paid $4,800, Denmark paid $5,200, and France paid $4,900.

The main reason for the difference is that we pay twice as much for everything. We pay twice as much for prescription drugs, for MRIs and other medical equipment and tests, and our doctors get paid twice as much. In addition, the private health insurance industry costs us more than $250 billion a year (almost $800 per person) to act as an intermediary between patients and providers. In addition, hospitals, doctors’ offices and other providers spend tens of billions to deal with complex claim forms that differ by insurer.

The government already pays for more than half of the nation’s health care bill through Medicare, Medicaid, veterans’ benefits and other public sector programs. Getting to Medicare for All would mean covering the other half of the current expenses, along with the additional costs of paying for the uninsured and under-insured who are not getting the care they need.

This would be a difficult political process as the insurance and pharmaceutical industries and other affected groups will use all the political power they have to prevent reductions in their income. But at the end of the day, it is undeniable that the United States can afford the same guarantee of health care enjoyed by people in other wealthy countries. The question is whether we have the political commitment to bring it about.

This column originally appeared on CNN.

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Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC. 

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