It would be an unprecedented federal cost.
Blahous ’18 [Charles; 08-05-2018; “The Fiscal Implausibility of Medicare for All Federal health spending under M4A would grow to exceed all current federal spending as a % of GDP.”; Charles Blahous is the J. Fish and Lillian F. Smith Chair and Senior Research Strategist at the Mercatus Center at George Mason University; Manhattan Institute; https://manhattan.institute/article/the-fiscal-implausibility-of-medicare-for-all \\pairie]
A primary effect of M4A would be to replace private spending on healthcare with government spending financed by federal taxpayers. Americans would pay for no deductibles or cost-sharing, but they would pay much higher taxes. This change dwarfs any projected changes in national health spending, which in turn are a highly contingent, unpredictable function of whether and how deeply provider payments are cut. The observation that Americans are already paying for most of these expenses, while technically true, by itself glosses over the important question of whether they are willing to have their taxes raised sufficiently to have the government pay for them.
An analogy might help frame the choice. Suppose, for example, that a government representative came to your door and said, “We’ve totaled up all the money you spend each year on food. We think you’re wasting money paying for restaurants’, groceries’, and farms’ costs of doing business, as well as others in the food industry. We think we can do this more efficiently. So we’re going to raise your taxes by that amount of money, and we’ll provide all your food to you for free. And we’ll also be able to take care of those Americans who don’t have enough access to food. We’re planning to cut all payments to restaurants, groceries, farms and other food providers by about 40%, and if we do that we might be able to cut 3-4% off of your total food bill.” Would Americans take this deal?
Maybe some would. But it’s nearly certain many would not. First, it’s a huge amount of money to turn over to the government. Even if shown how much they were already spending, it doesn’t necessarily follow that Americans would want to pay that much in additional taxes. The potential for a 3-4% reduction in their food costs might not make up for surrendering all control over how they spend on food. Second, they would be correct not to trust the government to follow through with those 40% payment cuts, once lobbyists for the food industry enter the picture – and if the government doesn’t do so, then their food costs would rise at the same time that they lose a great deal of control. Third, if the payment cuts do go through, Americans might worry that their favorite restaurant would close and that they’ll not be able to eat there anymore. They might also worry about the lines that would form at grocery stores and restaurants as 40% cuts send many of those establishments out of business. Finally, some may simply not want to give up their remaining power to choose how much to spend on food, no matter how the numbers shake out.
An important thing for Americans to know is that financing M4A would require more funds than doubling all projected individual and corporate federal income taxes would generate, and indeed that the actual financing required would likely be significantly greater even than that, depending on how deeply the government is willing to cut payments to doctors, nurses, hospitals and other healthcare providers. On the other side of the coin, Americans would be excused from paying for healthcare in the many ways they currently do. As the idea of M4A is discussed, financing the unprecedented federal cost should be considered whenever and wherever there is a discussion of its potential benefits.