[GirlySports]

So since we've been talking about healthcare here, I recently listened to a discussion between two American friends of mine. Person 1 is a lawyer, partner and Person 2 is an IT Manager. Both are Democrats. See what you think of this long discussion

Person 1: think Sanders is the least likely to beat Trump in the fall. I don't think these head-to-head polls matter so much because he hasn't been through a national wringer. And I think that as soon as folks realize his election means higher taxes for them personally, and they don't actually *know* anyone who's been deliberately abused at the border or lost out on asylum or refugee status, they will decide Trump isn't so bad. Those people make up a big part of the Dem Congressional vote in 2018.

In all honesty, I think Warren is pretty risky on that front too. I wanted Kamala Harris because she was dishonest enough to promise no tax increases even though we clearly need tax increases.

Person 2: WOULD his election mean higher taxes for people, personally? I thought the main aim of he and Warren was folks making a ton more than even those who might be considered "upper middle class" at this point...

Person 1: Single payer health care alone would require a sixty percent increase in the overall federal budget. Not a sixty percent increase in the *deficit*, but that large of an increase in total federal spending. Plus we're going to give everyone free college, pay off college loan debt, rework the entire economy to combat global warming, and increase social security and disability benefits.

There are nowhere near enough people making over $250K per year to fund that. So yes, these policy agendas would require massive tax increases for lots of people.

Person 2: Is that single payer alone without factoring in increased corporate taxes and decreased personal spending on health care? I mean, the government hands out a trillion dollars here and a trillion dollars there to the military every time someone sneezes and taxes don't go up - how does that work but actually spending on people rather than tanks mean that taxes go up? Quite literally the GOP and Trump just exploded the deficit with that massive tax cut for the top 1% - how about we simply claw that back and start there?

Person 1: Sure, we start there. That gets you about 1/30th of the way. Because when they talk about a "trillion dollar tax cut for the rich," they are using a ten-year estimate. So that's $100 billion per year. Single payer requires additional federal spending of $3 trillion per year.

That's why the "endless spending for war" thing doesn't work. A generally anti-war group estimated that the Middle East wars have cost something like $2 trillion since 9-11. That includes direct spending, medical costs, extra benefits for individual soldiers, etc. That's two-thirds of one year of single payer.


On balance, there won't be "extra" spending. You'll have the government spend ####loads more, and the private sector and individuals spending ####loads less. For example, right now a huge chunk of the private money being spent on health care is by employers covering their employees' health insurance. Employees don't see that. Those employers will get a massive tax break if single payer goes through. But there's no way to make sure all that extra money goes to the employees to account for the increased taxes they will need to pay under a system.

In 2019, I personally paid more than $45,000 on health insurance premiums for my firm's employees. That's my share of my firm's overall bill - it does include other partners and myself. I'll make out like a bandit from single payer, because I won't have to spend nearly that much. But even though we've been very generous with our employees on this issue (we haven't raised the employee contribution to health insurance since I got here in 1998), I can't promise that every dollar I save on health premiums will get passed to my employees. And there's no way to ensure that it would get passed onto them in such a way that each person comes out even compared to our current system.

This is why I think the current left-blogosphere focus on single payer is foolish and possibly self-destructive. There are literally tens of millions of people with employer-provided health insurance. I think it's 140 million people. Those folks don't want to risk losing their coverage. That's a big reason why reform failed in 1993. And they have reason to be skeptical, since no country has ever done the kind of transition we're talking about. So if we go into the election promising to take away their insurance and double their taxes to pay for it, they might not be as thrilled as we are on here.

There are other ways to get universal coverage that don't require single payer, that require much less disruption.

So, in other words, the answer to your question is yes.

Person 2: Isn't your "promise" simply higher corporate taxation earmarked for healthcare expenses? You don't see a windfall here, you see a different expense line item. In a far more macro view, it seems like the difficulty of unwinding the current system is intentionally obfuscated by shifting the focus solely on the payers. "How will you pay", "who might pay more", etc. That in large part wouldn't change, individuals would still contribute (taxes rather than paycheck deductions/deductibles/co-pays) and companies would still contribute (increased taxes, decreased employee benefits). What massively changes is the payees. Right now, what percentage of individual/company payments get siphoned off by private insurance companies before reaching actual health providers? And why is that deemed either necessary or too difficult to fix? Because it actually is too difficult or "harmful" to the people, or because the middleman lobbying has a louder voice than the people?

Person 1: It's too difficult to fix because we aren't starting from scratch. We have had a system evolve in response to various incentives for seventy-five or eighty years, thus entrenching a system that basically works for tens of millions of people who have a lot of clout.

Plus, when you talk about money being siphoned off, health insurance companies are not the biggest problem. As a percentage of revenues or investment capital, they are not inordinately profitable. And when they are "too" profitable in a given year, they are required to under the ACA (and actually do) issue rebates to their customers. (When it comes to overall costs, the problem is the providers. They are the ones charging $1800 for a month's supply of a drug that costs $6 to make, or $3500 for an MRI that takes a couple hours.)

(Also, note that when most of the western European countries voted to tax themselves to pay for huge government health care subsidies, they had mostly been pounded to dust by the war and ethnically cleansed for a hundred years. They didn't have a built-in resentments of large minority groups that we have, in part because they had found a "final solution" for one of those groups and others were forcibly kicked from one country to another.)

Anyway, single payer is just not necessary. Many countries have universal coverage without single payer. You can take the ACA, add a public option, make half a dozen other modifications, and solve 80 percent of the remaining problems. And then the rest can be covered by public funding and tax increases, at a much lower order of magnitude than the universal single-payer no-cost-to-the-user plans being offered by Sanders or AOC or now Warren.

Person 2: To the first point, isn't that all still part of the same equation? If its not taxed on one side, its taxed on the other. That $45K becomes part of a higher personal income tax, as does every other dollar paid to every partner and employee over the course of the year. No one is or should be pretending single payer means your future income is your present day income plus your out-of-pocket health, just that your overall costs from all angles will decrease and you'll be shielded from a worst case scenario.

To the second point, any system, be it the current corporate tax structure or a hybrid income/profit or a headcount is as open to abuse, and moreso the more complicated that system is made. Has every other first world country not figured out that you can get money from A to C without necessitating a well-paid B without any redeeming societal value in the middle? The reflexive "you haven't solved everything in detail yet" ignores that the problem is strings out is lots of people dying and/or going bankrupt to maintain status quo.

Person 1: I don't think this really works out, though.

Between me and my partners, let's assume we pay around $200K per year for health insurance. (It's more than that.) Single payer happens, and now I no longer have any moral obligation to pay that for my employees' benefit. So we have a huge windfall.

Let's assume that we pass $100K of that money to our employees.

The other $100K becomes additional personal income to my and my partners.

My employees pay, say, 20% of their marginal income in personal income tax. That's $20,000 in money going back to the government.

Let's say we pay 35% of our marginal income in taxes (I am not in that high of a bracket, though I wish I were). That's another $35,000 in additional taxes.

So the government gets an additional $55,000 in taxes from me and my employees. Meanwhile, the government is now picking up the medical expenses that we used to get for that $200K.

The government is clearly more efficient than an insurance company. But still, there's no way it can only pay $55K for the care that used to cost us $200K. So while taxes from reduced premiums are clearly going to pay for *part* of the increased government spending, they aren't going to come even close to paying for all of it.

You need to massively raise tax rates or impose other taxes. Which, presumably, we already want to do so we can have more public transit and solar power and electric cars and reduced college expenses and housing subsidies and social security.

Person 2: And if that $200K serves as a 10% bonus to your employees, that means you have $2.2MM in salary expenses subject to the higher tax rates, right? Ignoring all other options and complications and everything, stripping out excess costs and raising taxes offset by the loss of healhtcare expenses has the ability to cover this. Has it not been economically proven that, over a decade, single payer is less expensive than the present state? The one thing I agree with you on is the "I just won't hire" point if it becomes a punitive payroll or headcount tax. I'd much rather see it be tied to corporate revenues so its unavoidable and protected from any fancy accounting, but I'm sure for that reason it would also fail. There will be a massive across the board tax increase. It will pay for itself with a massive across the board health care cost decrease. This feels like saying “how can you buy a house knowing there will be a massive increase to your mortgage expenses” without acknowledging rent expenses will disappear.

Person 1: If millions of people believe single payer will mean their taxes will go way up, they will not support single payer or vote for a candidate who makes it a big part of their platform. So that means (i) single payer wouldn't happen, and (ii) if the Dem nominee is one such person, Trump is more likely to win.

So to avoid having millions of people believing single payer will raise their taxes, you need to come up with a system that, for the most part, allocates the necessary massive tax increases to the people who are otherwise saving money from the transition.

To use your earlier analogy, you have to make sure you are imposing the monthly mortgage payment on the guy who used to pay rent. If that mortgage payment is instead being imposed on the rest of the neighborhood, many of whom are paying their own rent or mortgages, people aren't going to go for it.

and they continue on but you get the point.