The costs of Medicare would offset the costs of the payroll tax.

Moving to Medicare for All will involve dramatic reductions in current spending for health insurance premiums and out-of-pocket healthcare, balanced by net savings and increased taxes. As critics have noted, over the ten years 2019 to 2028, Medicare for All would cost nearly $36 trillion, which would require an increase in federal revenues of nearly $9 trillion over the same period.26

This tax increase, however, would be more than offset for Americans by the reduction in health insurance premiums and out-of-pocket spending on healthcare.27 Current insurance premiums are already nearly 22% of taxable payroll and are projected to rise to nearly 24% over the next decade, well above the cost of Medicare for All at 14% of taxable payroll, falling to 10% over the next decade (see Figure 8). If the total cost of the Medicare for All system was put on wages, it would still lower the share of wages going to healthcare by a third, saving the average worker over $4000 in 2019, rising to nearly $8000 by 2028 (see Figure 8). The savings for the average worker would be even greater to the extent that Medicare for All is financed with progressive taxation, which would shift some of the cost onto those with more ability to pay, and onto profits. Health insurance premiums currently are the same for all regardless of income: a CEO who is paid $20 million pays the same premium as a sales agent on $50,000. By shifting the burden to ability to pay, tax finance would give even greater savings to the middle class and to workers.