Chairman's Blog

Medicare-for-All and Other Brilliant Ideas

July 30, 2018


Medicare-for-all is a mainstream Democratic theme in this year’s election season. To a lot of people, it sounds pretty good, but it’s worth taking a quick look under the hood.

There are at least two important aspects of Medicare-for-all that deserve our consideration. Quality and cost.

Let’s start with the cost. Who will pay?

The simple and consistent answer Democrats provide is that it will be someone else who pays, and that someone is the same group they suggest pay for every other of their big government schemes: the rich. But what does that mean?

Who is “rich” is a bit of a moving target. Some think it’s anyone who makes more than $60,000 per year. But let’s say Democrats confine their idea of rich to someone in the top two tax brackets. That means people who pay the federal government 35% to 40% of their income. Of course, that’s not all they pay. When you add in state taxes, property taxes, sales taxes, and all the rest, most of those taxpayers already pay well over 50% of their income each year to government.

But Democrats insist that’s still not enough. Now they won’t tell us what is enough because most experts say Medicare for all will mean at least a 75% tax rate on the rich and even Democrats know that sounds extreme to most people.

Even more, a 75% rate won’t be nearly enough to pay for all the costs of their plan so they’ll have to raise taxes on the poor and middle class as well, and raise them by a lot.  

They also intend to raise payroll taxes on businesses, small and large. That means less money for employees so expect a spike in unemployment. But even higher taxes on all those groups and people won’t be enough, so they make up the shortfall by suggesting that health care workers, hospitals, and drug companies will just have to accept lower rates for their services.

Now consider the quality of care. Medicare as it stands today is NOT accepted by many health care providers for the simple reason that the amount Medicare reimburses for services doesn’t even cover the actual cost in many cases. Force Medicare on the medical profession and we will see tens of thousands of doctors retire or go into the strictly private ‘cash for care’ practice. In addition, expect medical colleges to take a huge hit when no one sees a financial incentive to go through all those years (and expense) of college so they can make next to nothing after graduation.

The same holds true for nurses, hospitals, clinics, medical device manufacturers, labs, drug makers, and everyone else in the health care industry.

Now I’m not saying it’s impossible to reduce health care costs while protecting high quality and greater availability. But I am saying the only way to do so is by pursuing policies that have worked so magnificently in every other endeavor and industry — policies that encourage competition, innovation, investment, and creativity.  

I am saying that government force has never been able to achieve lower costs, greater access, or better quality in the medical or any other industry. Medicare-for-all turns 100% of our health care industry over to a federal government best known for running the Post Office, the Veterans Hospitals, and the IRS.  

No, thank you!

John Philip Sousa IV

John Philip Sousa IV is an entrepreneur, political activist, author and accomplished business person. John has worked in the financial services industry for over 40 years, built a highly successful marketing company, ran for congress at age 24, and in 2016 created and led the successful movement to draft Dr Ben Carson into his candidacy for President of the United States. John is author of John Philip Sousa, A Patriot’s Life in Words and Pictures and Ben Carson, RX for America.