Presidential candidate Bernie Sanders' proposal to create a single-payer "Medicare for all" system has drawn criticism because, opponents say, it would lead to a big increase in taxes. But a new study estimates that the federal, state, and local governments paid for 64.3% of US health spending, or $1.877 trillion, in 2013 and that it would not take much higher taxes to finance a single-payer system...................
According to David U. Himmelstein, MD, and Steffie Woolhandler, MD, MPH, from the City University of New York School of Public Health at Hunter College, who wrote the article, the government share of national health expenditures will rise to 67.1% by 2024. At that point, they argue, there will be only a 4-point spread between what the US government pays for in our public/private healthcare system and the 71% of Canadian health spending that that country's government spends on its single-payer system. [my bolding]
The article was published online January 21 in the American Journal of Public Health.
Mark V. Pauly, PhD, a professor of healthcare management at the Wharton School of the University of Pennsylvania, told Medscape Medical News that Dr Himmelstein's and Dr Woolhandler's methods are sound. As the coauthors point out in their article, most health economists, as well as the US Office of Management and Budget, regard the tax exclusion for private insurance as a form of healthcare spending. People who receive employer-sponsored health insurance do not have to pay taxes on the part of the insurance premium their company pays on their behalf. As a result, the government has to increase other taxes, Dr Woolhandler explained in an interview with Medscape Medical News.
She and Dr Himmelstein calculated that tax subsidies for private health spending totaled $295.9 billion in 2013. Federal income and payroll tax subsidies accounted for about 80% of that, they said.Pauly does maintain that much higher taxes would be required to fund a Canadian style single payer system. But as people like Bernie Sanders point out, the tax increase will be offset by the disappearance of insurance premiums and related expenses.This would not be socialized medicine; this would be single payer health insurance, like medicare. The providers would remain independent of the government, as is currently the case under Medicare. Their payments, however, would now flow from the federal government, as is currently the case with Medicare, and doctors would not have to spend 10 hours a week fighting with for profit insurance companies. (and no, it is seldom the case that they have to fight with Medicare; it's Aetna and similar companies they wrestle with in order to provide care for their patients.).
Government employers made 28% of all employer payments for private health insurance in 2013; by 2014, the study projected, that will increase to 31%. More than 80% of those payments were made by state and local governments, which employ far more people than the federal government.
Overall, US tax-funded healthcare spending accounts for a larger share of GDP (11.2% in 2013) than does total health spending in any other country, the coauthors said, and they project that that figure will rise to 13.2% of GDP in 2024.