Opinion | Universal Health Care Might Cost You Less Than You Think

Consider the impact of these insurance premiums on American families with children. Through the earned-income tax credit and the child tax credit, the federal tax code does a lot to ensure that the effective tax rates of lower-middle-class workers go down considerably when they have kids. But these efforts are effectively negated by the burden of employer-based health insurance.

When single workers decide to start a family, they need to switch from an individual health plan to a family health plan. The average individual health plan has an annual premium of just under $6,400 — with employees directly paying around $1,400 of that. For family plans, the premium is around $19,000 with employees responsible for around $5,200.

This jump in premiums for workers who start families is what ensures that middle-class workers with children put around 40 percent of their labor compensation toward taxes and health care, despite policies that reduce their formal taxes.

Moving from our system to a European-style system would make our overall system of taxes and health insurance payments much more progressive for the majority of Americans, because the elimination of private health premiums would more than offset the rise in formal taxes for all but the wealthy.

Although the financing details of Medicare for All remain provisional at the moment, a RAND report on a more concrete single-payer proposal for New York State found that the plan would cut health care costs dramatically for the lowest income group, while increasing them by about 50 percent for the highest income group. Middle-class people would also experience net savings on health care equal to around 10 percent of their income, with only those earning 10 times the federal poverty line or above — that’s $134,000 for an individual or $276,000 for a family of four — paying more than they do now.

If we don’t move toward a European-style health program, we’ll remain stuck in a system where Americans, regardless of their incomes, pay ever larger amounts out of their paychecks to fund health care. The fact that we don’t call these payments “taxes” doesn’t change that fact, so it shouldn’t blind us to the best solutions.

If policymakers in America want to boost the fortunes of the middle class, and especially middle-class families with children, shifting the health insurance burden up the income ladder while bringing down overall health care costs, as Medicare for All would, is one of the surest ways to do that.

Matt Bruenig is the founder of People’s Policy Project, a think tank funded by small donors.

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