Healthcare

Workers aren’t so sure “Medicare for All” would raise their wages – they are smart; it won’t.

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.

Source: Workers aren’t so sure “Medicare for All” would raise their wages – Axios

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 🤔

6 replies »

  1. Democrats may be losing their traditional labor union worker voters because of the threat of losing hard won labor union negotiated good private health insurance. Also, Democrats who tout “Medicare for all” never mention the Medicare B premium that seniors now have to pay.

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    • …. Another thing… Democrats keep using the same “taxing the rich one percent” source for all their trillions of dollars in various different give-a-ways and other pie in the sky programs. Eventually even the rich one percent get tapped out. Democrat candidates beat around the bush on just who will be taxed and give a song and dance about how government benefits will outweigh the increased taxes. People are waking up to the fact that even the middle-class and lower-middle classes will be taxed to death. The commie slogan is “from each according to his ability to each according to his need”… but in commie reality it’s “from each according to his ability to commie government officials who will dictate what they think you need.”

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  2. I posted a comment here hours ago that never showed up. So I posted it again and it still didn’t show up. Just now I posted it for the third time but it’s still not showing. If all three show up later, you’ll know why.

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    • Not sure what happened. I don’t see it pending. Sometimes if they are too long or they contain links, they don’t go through. Unfortunately, I can’t control that.

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  3. If they will raise the Medicare Part A tax as needed to finance M4A (FICA-MED on your paycheck), the actual cost many workers will pay will be at least 30% higher, on average, because, unlike most contributions for employer-sponsored health coverage, which are taken pre-tax per tax code section 125, the FICA – MED contribution is taken on an after tax basis. So, today when they deduct $100 pre-tax for health care, it probably only reduces your take home by $70, but, fund M4A via FICA-MED, and $100 will lower your paycheck $100.

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  4. The “savings” will be spent on either stock buybacks or more than likely, additional taxes for both the employee and or the company. I predict that the actual employee paycheck net take home pay will decrease as the cost will be shifted from the employer to the employee for the “free” M4A. As proof, teachers in NJ have been bringing home less even after pay raises in the past few years because their contracts have finally added provisions of contributing to their benefits like the private sector has been doing for decades. I predict the same thing will happen when the cost is shifted from employer to employee.

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