As Obamacare flounders, progressive Democrats have started to warm to the possibility of going even further and socializing health insurance altogether. Some commentators have speculated that the next Democratic Party presidential nominee will run on single-payer if the GOP has its way and guts the Affordable Care Act. But like many liberal social planning schemes, single-payer healthcare starts sounding much less appealing when accompanied by the mammoth tax bills that would be required to pay for it.
Reason reports on some fiscal forecasts for New York State’s proposed single-payer system:
The single-payer health care plan that cleared the lower chamber of New York’s state legislature on Tuesday would require massive tax increases to double—or possibly even quadruple—the state’s current annual revenue levels. […]
To pay for the single-payer system, [an advocate] suggested that New York create a new tax on dividends, interest, and capital gains that would range from 9 percent to 16 percent, depending on how much investment income an individual reports, and a new payroll tax that would similarly range from 9 percent to 16 percent depending on an individual’s income.
It was a similar prescription for massive tax hikes that sank Vermont’s experiment with single-payer health care in 2014. Funding it would have required an extra $2.5 billion annually, almost double the state’s current budget, and would have required an 11.5 percent payroll tax increase and a 9 percent income tax increase.
These eye-popping numbers point to a truth about healthcare that is often lost in Washington’s endless back-and-forth about how much the government should subsidize it: It simply costs too much no matter who is paying for it, and until we can find a way to sustainably bring down the cost of treatments and delivery, healthcare will continue to be an area of fierce contention and political warfare.
Yes, our policy should be oriented around expanding access to coverage in the near-term where possible. But in the long-term, our policy must be oriented around making healthcare cheaper—through new research programs, de-regulation, tort reform, intelligent immigration policy, and efforts to “push competencies down” so that medical professionals can do the same work with less training.
Ballooning healthcare costs are a menace to the middle-class and to public budgets. This is true now, and it would be true under single-payer. Our debate should be less focused on changing who pays for healthcare, and more focused on making it cost less in the first place.