Sanders proposes tax hike to pay for universal health care

CHARLESTON, S.C. (AP) — Vowing to achieve universal health care, Vermont Sen. Bernie Sanders released a sweeping proposal hours before Sunday’s Democratic presidential debate to create a new single-payer health care system in the United States paid for with a variety of widespread tax increases.

Sanders’ “Medicare for all” plan was poised to play a starring role in the final Democratic debate before the leadoff Iowa caucuses and came as rival Hillary Clinton has ramped up her critique of Sanders’ health care plans.

Clinton has pressed Sanders for details on whether middle-class families would face a higher tax burden under his plan, which she has warn would undermine President Barack Obama’s signature health care overhaul.

Her campaign noted Sanders’ plan was released a little more than two hours before the debate. “When you’re running for president and you’re serious about getting results for the American people, details matter — and Sen. Sanders is making them up as he goes along,” said Clinton spokesman Brian Fallon.

Sanders would replace the nation’s existing employer-based system of insurance with one in which the government becomes a “single payer,” providing coverage to all. It would eliminate co-pays and deductibles, and Sanders’ campaign argued, bring health care spending under control.

“Universal health care is an idea that has been supported in the United States by Democratic presidents going back to Franklin Roosevelt and Harry Truman,” Sanders said in a statement. “It is time for our country to join every other major industrialized nation on earth and guarantee health care to all citizens as a right, not a privilege.”

His campaign said the plan would cost $1.38 trillion a year, but would save $6 trillion over the next decade compared to the current health care system, citing an analysis by Gerald Friedman, an economist at University of Massachusetts at Amherst.

But much of the cost would be paid for through a 6.2 percent payroll tax paid by employers and a 2.2 percent “health care premium” on workers. It also relies on taxing capital gains and dividends on families earning more than $250,000 a year, eliminate deductions for wealthy Americans and raising the estate tax.

The plan would also raise income taxes on Americans making more than $250,000 a year, including a top tax rate of 52 percent for those earning $10 million annually or more.

While Sanders’ proposal is similar to the single-payer health care plan that he has introduced nearly a dozen times since joining Congress in 1991, it is a reversal of his campaign rhetoric.

In December, he promised to raise taxes on the middle class only to pay for a plan to provide paid family leave. His other programs, like tuition-free college and health care, would be paid for with higher taxes on the wealthy.

“I think it is appropriate to ask the wealthy and large corporations to start paying their fair share of taxes,” he said on NBC’s “Meet The Press.”

Some liberal activists said Sanders’ plan, like other federal programs such as Social Security, would deliver a better value for low and middle income taxpayers.

“If you had a universal health care plan people wouldn’t have to pay premiums. They would gain far more than they would shell out in taxes,” said Roger Hickey, a co-director of the Campaign for America’s Future. “Social Security wouldn’t have existed if FDR had said, ‘I’m not going to raise anyone’s taxes.’”

Advocates of creating a single-payer health care system say it wouldn’t immediately slash spending. With health care accounting for 18 percent of the economy, a change to such an approach would be a shock with wide-reaching consequences. The U.S. still would be likely spend more on health care than any other economically advanced country.

Instead, single-payer would aim to slow the rate of growth in costs by putting hospitals on budgets, negotiating drug prices with pharmaceutical companies and eliminating much of the waste that many experts believe characterizes the U.S. health care system.

Any expected savings from a single-payer system would likely take time before it showed up, especially when the costs of the transition to such an approach are factored in.

__

Associated Press writers Lisa Lerer and Meg Kinnard contributed to this report.

__

Follow Ken Thomas on Twitter at: https://twitter.com/kthomasDC