KHN & PolitiFact HealthCheck

Biden Gets Too Specific On ‘Medicare For All’ Tax Hikes

Sparring over “Medicare for All” and universal health care, former Vice President Joe Biden leaned on a new variation of his attack line, highlighting potential costs to middle-class Americans.

“For people making between $50,000 and $75,000 a year, their taxes are going up about $5,000 because the fact is, they will pay more in new taxes,” Biden said.

We’ve heard many debates over what Medicare for All could ultimately cost, but these specific figures were new to us. And the health plan — pushed by Vermont Sen. Bernie Sanders and backed as well by Massachusetts Sen. Elizabeth Warren — leaves many details yet to be colored in.

We were curious where these figures came from, and how they could be derived. So we decided to dig in.

The Numbers

We contacted the Biden campaign, which told us the figure was derived from approximating the impact of a 4% income tax, plus a 7.5% payroll tax — financing mechanisms they said have been proposed by Sanders.

When you do the math, that suggests a family making $60,000 would indeed see the tax increase Biden surmised.

But this math is problematic on many levels.

For one thing, Sanders’ bill doesn’t actually propose financing Medicare for All through a combined 4% income tax and 7.5% payroll tax. The bill doesn’t include any financing mechanism at all.

In a separate document, Sanders talks about different ways to pay for the system — and those are listed as two examples of pay-fors. But they aren’t the only ones, and Sanders frames this list as “a number of options to begin [the] discussion.”

So suggesting that Medicare for All would increase taxes as specifically as Biden suggests is an inaccurate reflection of the bill.

Another issue is that there isn’t a good sense of what this health plan would cost — so any estimate of its tax burden is really just a guess.

“There are so many unknowns that you cannot say anything definitive,” said Gerard Anderson, a health policy professor at Johns Hopkins University.

Biden’s statement “could be true,” he added — but “there’s no evidence either way.”

Taxes Versus Costs

And there’s another issue, said Ellen Meara, a health economist at Dartmouth College. That is, highlighting the potential tax burden of Medicare for All without discussing overall costs is misleading, she argued.

Meara pointed to research from the Kaiser Family Foundation, which found that the average employer-sponsored plan for a family of four costs $20,000 per year in premiums. That, economists say, results in lower wages for employees. Many argue that if employers were relieved of this cost, that would translate into people earning significantly more in take-home pay. (Kaiser Health News is an editorially independent program of the Kaiser Family Foundation.)

“A $5,000 or $6,000 tax is really quite small compared with what middle-class families forgo in cash wages to get employer-sponsored coverage,” Meara said.

Our Ruling

Biden used an unusual level of specificity in describing how Medicare for All would affect families making between $50,000 and $75,000 per year.

Those numbers don’t come out of thin air, but they are based on too many assumptions to be reliable. And they don’t accurately reflect what we know about what this plan would cost, or the extent to which it proposes specific new taxes.

This claim contains an element of truth, but it ignores critical facts and assumes more than the evidence warrants. We rate it Mostly False.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

Related Topics

Cost and Quality Elections Insight Insurance Medicare