Taxes are playing a leading role in the health care debate that’s dividing the field of 2020 Democratic presidential candidates.
Centrist candidates are criticizing their opponents on the left who support the single-payer proposal known as “Medicare for All” by arguing that it is too expensive and would require tax hikes for the middle class.
Progressives counter that Americans will be better off overall under their plan because the amount households spend on health care will go down, even if their taxes go up.
Experts say the discussion over taxes stems from the fact that Democrats all want to expand the federal government’s role in providing coverage.
“The reason it’s getting more attention is that there’s a broad agreement in the Democratic field that the public sector needs to be taking on a much bigger role in health care,” said Michael Linden, a fellow at the left-leaning Roosevelt Institute. “With that, comes questions of financing.”
White House hopefuls are also looking to differentiate themselves from the pack.
The primary will be about “candidates trying to distinguish themselves and separate themselves from one another on the issues,” said Mollyann Brodie, who directs public opinion and survey research at the Kaiser Family Foundation.
The fight over taxes and health care was front-and-center during the recent debates in Detroit.
During the first night of the debates, Sen. Elizabeth WarrenElizabeth Ann WarrenHealth care fight among 2020 Democrats shifts to taxes Joe Biden needs to watch out for Elizabeth Warren as she picks up Biden faces challenge from Warren in Iowa MORE (D-Mass.), who supports Medicare for All, was asked by CNN’s Jake TapperJacob (Jake) Paul TapperSunday shows – Trump’s Epstein conspiracy theory retweet grabs spotlight Immigration officials defend Mississippi ICE raids as part of larger investigation Jake Tapper calls out Trump for sharing ‘deranged’ and ‘insane’ conspiracy theory about Epstein death MORE if she would raise taxes on the middle class to pay for her plan. Fellow candidate Sen. Bernie SandersBernie SandersScalise: Trump no more responsible for El Paso than ‘Bernie Sanders is for my shooting’ Health care fight among 2020 Democrats shifts to taxes Joe Biden needs to watch out for Elizabeth Warren as she picks up MORE (I-Vt.) has said he would do just that.
Warren did not directly answer the question but said that large corporations and billionaires would pay more while “middle-class families are going to pay less out of pocket for their health care.”
Sanders, who was on stage with Warren, called Tapper’s questions Republican talking points, while noting that his Medicare for All legislation doesn’t include deductibles or co-payments.
Meanwhile, candidates who do not support Medicare for All, such as former Rep. Beto O’Rourke (D-Texas) and former Rep. John DelaneyJohn Kevin DelaneyHealth care fight among 2020 Democrats shifts to taxes The Memo: Warren emerges as Biden’s most dangerous rival Democrats pounce on Trump in bid for rural voters MORE (D-Md.), emphasized their plans wouldn’t result in middle-class tax increases.
During the second night of debates, Sen. Michael BennetMichael Farrand BennetHealth care fight among 2020 Democrats shifts to taxes The Hill’s Campaign Report: 2020 Democrats challenge Trump’s response to El Paso Young Turks’ Cenk Uygur: The mythology of unity MORE (D-Colo.) criticized the progressives’ health care plan for necessitating middle class tax increases. New York City Mayor Bill de BlasioBill de BlasioHealth care fight among 2020 Democrats shifts to taxes Democrats pounce on Trump in bid for rural voters The Hill’s Campaign Report: 2020 Democrats challenge Trump’s response to El Paso MORE (D) responded by accusing Bennet of “fearmongering” and argued that the costs associated with premiums and deductibles are “worse than any tax.”
In the lead-up to the debates, Sen. Kamala HarrisKamala Devi HarrisHealth care fight among 2020 Democrats shifts to taxes Joe Biden needs to watch out for Elizabeth Warren as she picks up Harris: Russian election interference exposed race as nation’s ‘Achilles heel’ MORE (D-Calif.) unveiled a health plan that would provide universal coverage but keep a role for insurance companies, and said she would not raise taxes on people making less than $100,000 to pay for it. But other candidates, such as former Vice President Joe BidenJoe BidenHealth care fight among 2020 Democrats shifts to taxes Joe Biden needs to watch out for Elizabeth Warren as she picks up Biden faces challenge from Warren in Iowa MORE, disputed that Harris’s plan wouldn’t require tax increases for the middle class.
The amount of new federal costs associated with candidates’ health plans will ultimately depend on the details of their proposals. Many of those plans have not been fully fleshed out.
Sanders said at an event hosted by The Washington Post last month that he thinks Medicare for All will cost somewhere between $30 trillion and $40 trillion over 10 years, but that it would be less expensive overall than the current health care system. Analysts across the ideological spectrum have estimated that past versions of Sanders’s Medicare for All plan would cost about $25 trillion to $36 trillion.
Sanders put out a white paper earlier this year that included financing options for his plan: a 4-percent “income-based premium” on household income above $29,000; a 7.5-percent “income-based premium” paid by employers that exempts the first $2 million in payroll; a wealth tax; and an expansion of the estate tax.
Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, a deficit-hawk group, said the options Sanders describes as premiums look more like taxes because they are a compelled percentage of taxpayers’ income, rather than a fixed dollar amount.
He also said that Sanders’s financing options would not raise enough revenue to pay for his plan.
“Looking through and eyeballing it, it’s really hard to see them getting past $20 trillion, and I wouldn’t be surprised if it was closer to $15 trillion,” said Goldwein.
Harris said she backs many of Sanders’s financing options, including the premium paid by employers, but would only impose the employee premium on workers who make more than $100,000 and instead would create a financial transactions tax and tax companies’ foreign earnings at the same rate as their domestic earnings.
Goldwein said the employer-side tax would be an “indirect tax on the middle class,” since businesses would pass on the costs to employees.
A spokesman for Harris’s campaign told The Hill that employers would end up having less in per-employee health costs under the plan than they do currently.
Other proposals are expected to increase federal costs by less than Medicare for All would, though they would not eliminate premiums like Sanders’s plan would.
A proposal similar to the one O’Rourke supports, proposed by the left-leaning Center for American Progress (CAP), has been estimated to cost $2.8 trillion to $4.5 trillion over 10 years.
Both O’Rourke’s preferred plan and the CAP proposal would allow employers to continue offering private plans, but they could also sponsor a plan that’s similar to Medicare. Employees would have the choice to enroll in that plan, rather than their employer coverage.
Biden’s campaign estimates that his plan — which gives people the option of a government plan but allows private, employer-based insurance to remain — would cost about $750 billion over 10 years, and that the cost would be offset by increasing taxes on high earners.
Experts note that candidates are proposing trade-offs: tax increases that eliminate premiums and deductibles. Medicare for All proponents have been making the case that people’s overall health care costs would decrease even if taxes are higher, as polls show that many Americans could be scared off by the tax hikes.
A survey conducted by the Kaiser Family Foundation in January found that overall support for Medicare for All drops when people hear that it would require most Americans to pay more in taxes. At the same time, favorability for the plan increases when people are told it would eliminate premiums and reduce out-of-pocket health care costs for most Americans.
Brodie, who directs the foundation’s survey research, said the U.S. is in the “early stages” in the debate over Medicare for All, and that the public doesn’t have a strong understanding of what it would entail, so arguments from supporters and opponents are more likely to sway public opinion.
A poll conducted by Kaiser in July found that Democrats and Democratic-leaning independents would prefer lawmakers build on ObamaCare rather than replace ObamaCare with Medicare for All. Similarly, a Monmouth University survey released Thursday found that a majority of likely Iowa Democratic caucusgoers prefer a health plan where people can opt-in to Medicare over Medicare for All.
Patrick Murray, director of Monmouth’s polling institute, said that the preference for a public option among Democrats has more to do with concerns about losing private insurance and viewing Medicare for All as unrealistic than concerns about tax increases. But that could change in a general election, and Democratic voters who aren’t personally worried about tax increases might be worried about how Medicare for All would play in a general election, he added.
“If we were polling a general electorate, we’d be talking about the tax issue as well as concerns about losing private insurance,” Murray said.
Linden, of the Roosevelt Institute, said he thinks it’s a mistake for Democrats to attack other Democratic candidates’ health plans over tax increases, arguing it’s misleading to focus just on taxes if people will ultimately have more take-home pay.
But Jim Kessler, vice president for policy at the center-left think tank Third Way, said there’s no guarantee that employers will pass on any savings they receive to employees. He also said there may not end up being cost savings in the U.S. health system under a single-payer plan, and that it depends on the reimbursement rate for doctors and hospitals.
Kessler said the debate in the primary on taxes to finance health plans is important “because if Democrats don’t have it internally, they’re going to hear it when the general election starts.”