Here's How Much Bernie Sanders Says He'll Save You on Health Insurance

Imagine paying nothing when you go to the doctor’s office—no copayments, deductibles or portion of your bill. Any prescription drugs would cost you no more than $200 per year. And for all this, you’d pay insurance premiums of just 4% of your income.

That’s the vision outlined by Senator Bernie Sanders yesterday when he unveiled his Medicare for All bill. The Sanders proposal is actually more generous than the current Medicare program for people age 65 and over, which requires certain premiums and cost-sharing. All this free health care would come at a steep price tag, however: hefty tax hikes for the wealthy and, according to independent budget experts, probably for the middle-class as well.

Sanders’ bill isn’t likely to go anywhere in today’s Republican-led Congress. But, six weeks after Republicans failed in their own major push to overhaul the nation's healthcare system, the new proposal is furthering the discussion of what kind of country American wants to be. A growing number of Americans say the federal government is responsible for ensuring health care coverage for all Americans.

What's more, a group of Democratic signed on to support Sanders’ legislation, including some, such as Kamala Harris of California, who have been mentioned as possible presidential contenders in 2020. That means even if the bill goes nowhere in Congress, it could be part of Democrats' political platform for years to come.

Doing the Math

On the surface, Sanders' plan appears appealing for middle class families who would face no explicit tax increases. (Although, one might consider the 4% income-based premium, which would apply to income after certain standard deductions, the equivalent of a tax). A typical family of four earning $50,000 would save more than $4,400 a year in premiums alone under the Sanders proposal, according to a white paper released by the senator’s office. People who use a lot of medical services could save even more than that in total health care costs, since they wouldn’t be paying each time they went to the doctor or hospital.

There are risks, however. Sanders’ proposal would largely remove private insurers from the American health care system, a huge change from the present. The ultimate effect from this shift on health care prices, employers and individuals remains to be seen, says Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget.

In addition to raising taxes on the wealthy -- defined as households making more than $250,000 -- Sanders' bill would raise certain corporate taxes and eliminate deductions, which could reverberate back to workers. Under Sanders’ proposal, for example, employers would face a new 7.5% payroll tax. Employers frequently respond to taxes by lowering workers’ wages, according to Goldwein, but companies would also be saving since they’re no longer footing a large portion of their employees’ health care costs. So it remains to be seen how these two factors would shake out in employees’ paychecks.

Unanswered Questions

It's also possible that Sanders’ proposal underestimates the total cost of providing virtually free health care to every American. During the 2016 campaign, the Committee for a Responsible Federal Budget estimated that a prior version of Sanders’ plan would cost roughly $25 trillion over 10 years, while the fact-sheet on Sanders’s current proposal includes provisions for raising about $16 trillion of revenue over a decade. A Sanders spokesperson didn't respond immediately to a request for comment.

Any long-term funding gap means that Sanders might have to dip into middle-class wallets after all. “After we figure out how to pay for everything, it’s not clear whether employees will pay more out-of-pocket or less,” Goldwein says.