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Impacts of Bernie Sanders’ “Medicare for All” Programme on the US Economy

By: Chia HaoGuang, Dong Naige

Research Head: Ong Guan Da

Editor: Akshat Daga

Illustration by Jasmine


Amidst the many global issues and crises, the 2020 United States presidential election is scheduled for November 3, 2020. Amongst all, Bernie Sanders, a self-described democratic socialist, has proposed many progressive policies like Medicare for All, income redistribution through increasing tax on the rich, tuition-free public college and cancellation of student loans. This paper seeks to dive deeper into Sanders’ Medicare for All to analyse its impacts on the US economy and potential problems.

*This article was written when Bernie Sanders was still running for the Presidential nominee for the Democrat Party.

1. Introduction

The idea of “Medicare for All”is essentially a single-payer national health insurance plan to provide all US citizens with comprehensive healthcare coverage, free at the point of service. The programme has two main objectives -firstly to prevent big pharma, which have spent billions to ensure that their profits are prioritised, from ‘ripping off’ the Americans by ensuring that no one pays more than$200 a year for medicines; secondly, to lower the prices of prescription drugs through negotiation with large drug corporations, allow people to purchase low cost drugs from Canada and other countries;and lastly to cut prescription drug prices in half (Health Care, 2020).

2. Financing the Programme

The “Medicare for All”is an ambitious plan that requires many changes in the way healthcare is paid for in the USA. It attempts to shift the countryaway from its current multi-payer healthcare system to the single-payer system. This indicates that the responsibility for paying has now moved away from players like private health insurance companiesand employers through coverage policieslike ‘Medicare’and ‘Medicaid’to under the umbrella of the federal government (Booth, 2020).

There are several methods which Bernie Sandersproposed to fund this ambitious programme(Medicare Act for All, 2019). In particular, he proposes options to ‘make the wealthy pay their fair share.’ There are a few pre-suppositions which we must address: First, personal income tax will inevitably become more progressive, which in Sander’s proposal, will raise $1.8 trillion of revenue in a span of 10 years. This extends to taxing capital gains and dividends the same as work income, limiting deductions for the wealthy, taxing carried interest as ordinary income, and requiring derivatives to be marked to market. In addition to these points, estate taxes will be made more progressive, while a wealth tax will be imposed on the top 0.1%.

3. Implications

There are several implications that arise with Bernie’s “Medicare for All”: First, an increase in taxes;second, a fall in the funding of hospitals; and last, the limitation of the role ofprivate health insurers (Feinstein, Zeballos-Roig, 2020). The cost of supporting such a healthcare system propels the government to increase its budget through raising taxes. More specifically, the taxes will be structured in a way to make the wealthy pay their fair share as the government is making the personal income and estate tax more progressive and establishing a wealthy tax on the top 0.1% . These are forecasted to raise more than $3 trillion revenues over the decade (Options to Finance, 2020).As an extension of this point, employers might face new taxes as well. On the topic of Medicare, employer-sponsored insurance would be eliminated, but they might face new taxes–this includes, ‘a 7.5% income-based premium that is paid by employers, but exempting the first $2 million in payroll.’ Second, hospitals alsoclaim that government programs such as Medicaid and/orMedicare tend to pay them lesser than the cost of delivering health; instead, hospitals would often charge higher rates to private health insurers. A study conducted by The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) found that such a proposal, would create a nearly $800

billion cut to the hospitals, and likewise, will be particularly disruptive to the employer-sponsored health insurance market (American Hospital Association, 2019). Most importantly, it is clear that this plan will marginalise the role of private insurance companies–employers and private insurers are barred from providing coverage that overlaps with the government, it is clear that their roles are diminished.

4. Conclusion

In a nutshell, it is clear that Sander’s“Medicare for All”package includes an even larger government intervention, and reduces the autonomy of private enterprises, private health insurance companies in particular.


1.American Hospital Association. 2019. New Report Outlines Negative Impact of Medicare Public Option Proposal on Hospitals, Health Systems and Patients.

2.Booth, S. (2020, February 18). Medicare for All: What Is It and How Will It Work? healthline. Retrieved from

3.Feinstein, Zeballos-Roig. (2020). Bernie Sanders just cemented his frontrunner status with a huge victory in Nevada. Here’s how his Medicare for All plan would remake the $3.6 trillion US healthcare industry. Retrieved from:

4.Medicare for All. (2019). Options to finance Medicare For All.

5.Soderholm, M. (n.d.). Bernier’s Tax Plan. Retrieved from:

6.Health Care as a Human Right –Medicare for All. (2020). Bernie. Retrieved from

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