Friday, August 2, 2019

Senator Sanders Medicare for All Plan. Will it Save YOU $$?

Senatars Sanders plan will raise an employees payroll tax by 4%. But before you decide thats good or bad you need to look at the bottom line to find out the real answer.
According to PeopleKeep,
If you work for a good company your employer pays part of your premiums.
Single coverage costs $6,435 in 2016 according to Kaiser Health.
Family coverage costs $18,142 for the same period.
If your employer pays the average of 80% and you pay the remaining 20% plus any deductibles and copays the break points are.
Single coverage workers who make more than $25k a year will pay more in his proposed payroll tax.
Family coverage workers need to make about $120k a year before they start paying more under his plan.
This assumes a couple of things.

  • If your Employer pays a different percentage, or none than the the number changes. Lets say you have no employee health insurance, either you work at a small business, are self-employeed, or just changed jobs in the last 90 days divide $6,435 (single) or $18,142 (family) by your salary to see your basic rate. If you are paid hourly double your hourly rate (assuming 40/ hour work week) to estimate your salary.
  • Remember this is your premium cost, you also have deductibles and co-pays under normal insurance,
  • You are also paying income tax on whatever your company pays in benefits.
  • Remember this is just premiums, if you actually use it your costs go up with co-pays, deductibles, caps, and things the insurance company refuses to cover. Sanders plan adds a lot of the stuff medicare recipients use supplemental plans for now such as hearing aids, eyeglasses, etc.

80% is pretty rare in my experience but it varies company to company, and small businesses dont even offer health care. Also Part time employees usually do not get benefits. The thing to remember though is what they pay also counts towards your income taxes as if it were wages so your paying taxes on that coverage. Plus the company has extra costs from HR departments dealing with it and doing the annual shopping. With Single Payer they can skip all that, they might even give some of that difference to you in higher wages to stay competitive. Look at your paycheck to see if this is better or worse. For a single member coverage average is 6.4k and $18k for family coverage, look at your paycheck. If you make $50k thats 12% for single payer plus out of pocket expenses like deductibles and copays. If you make more than that its a lower % (like most of these news anchors) and if you make less your paying a higher %. Some low income people get a tax subsidy but were already paying for that in taxes. Senators Sanders plan linked here Employers pay 7.5% payroll so save huge. Employees pay 4% income tax so all but the richest save huge. Why is it so much cheaper? Lower overhead from more efficient Admin costs, no insurance lobbying (multi- Billion dollar industry), no need to advertise, no agents whose job is to prevent you getting your expenses paid, etc. Plus bigger pool better shares the costs. Also additional tax money paid by taxing capital gains and stock traders as if they were working for a living like most Americans, now they have a loophole to avoid taxes. A few other taxes on billionaires and some multi millionaires. Estate tax, Increase in their marginal rate, etc. So billionaires still get to be billionaires they just pay more in taxes. I'm ok with that.

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