Between the lines: It is likely true that employers would reap big savings if the government took insurance off their hands, and that many would plough savings back into wages, as economists believe. It’s just that workers don’t necessarily believe those savings will end up in their paychecks, creating an additional challenge for selling Medicare for All. Wage growth has been sluggish lately, making workers generally dubious that wages would increase.
Or it could simply be because they don’t trust their employers for any number of reasons. Savings might also be offset if Medicare for All is financed by a substantial payroll tax.
No it is not likely employers will reap big savings and if they realized any savings they are not going into wages. Savings employers realize from trimming benefits, terminating pensions, etc. don’t go into wages. That would merely trade one compounding expense for another and thus no savings at all.
Employers spend about 8% of payroll on health benefits (11.9% for public sector employees).
Given current health benefit plans are far less generous than that proposed for M4A, it is reasonable to assume that the cost of M4A will at least equal those numbers.
No you say, because M4A will save so much in administrative costs? Don’t count on it. No amount of supposed administrative savings are going to offset no cost medical, dental, vision and long-term care for all Americans.
If M4A tries to operate with the same level of administrative expenses as a percentage of claims as traditional Medicare, fraud and misuse will run rampant. If M4A attempts to save significantly by reducing health care provider fees, there will be unacceptable consequences.
And then there is another minor question. How will M4A be funded? Does anyone seriously believe employers will be allowed to keep those “big savings.” Yikes, they may use them for stock buybacks 🤔