Chelsea Clinton was Right: Everyone's Health Care is Threatened under Bernie's Plan

Recently, Chelsea Clinton got panned for saying that Bernie Sanders' health care plan - commonly heralded as 'Medicare for All' by the revolution-peddlers - would give Republican governors the opportunity to dismantle publicly funded health insurance for the poor and middle class, that is, Medicaid and the health insurance exchanges. Seems absurd to accuse a self-proclaimed socialist with a proclaimed demand for single-payer universal health insurance of trying to take away health care. Politifact rated Chelsea Clinton's claims 'mostly false.'

Politifact got it wrong. Bernie Sanders' plan does, in fact, allow for states to take away health care from the poor and middle-income, if not most everyone in a state. Although, that shouldn't be a surprise, given that Sanders' plan itself targets the economically disadvantaged for punishment. As Politifact notes, Sanders hasn't proposed a full health care plan for his presidential campaign, instead choosing to use a bill Sanders introduced in the Senate in 2013 without a single cosponsor, titled 'American Health Security Act of 2013' as the template.

Poltiifact notes it is in fact true that Sanders' plan repeals all health insurance funding from Medicare, Medicaid, and the Affordable Care Act Health Insurance exchanges. But he would channel the revenue instead to fund the single-payer system!

The bill, the American Health Security Act of 2013, specifically strips insurance benefits from the Affordable Care Act, the Children’s Health Insurance Program, Medicare and Medicaid. The bill also bans the sale of private health insurance that duplicates benefits provided by the government program. [...]

...but Sanders’ health care seeks to immediately replace all of these programs, as well as attempt to cover all those currently uninsured. That would be a federal-level change, rather than governors choosing to scrap those federal programs, and Sanders’ bill does make an effort to establish measures to circumvent the states that try to undermine the law.

The problem is, what Sander's bill "seeks to" do and what it actually does are quite different. Since Politifact helpfully pointed us to Sanders' 2013 bill, I decided to read it. In short, it ends all funding to Medicaid, Medicare, SCHIP an the ACA insurance provisions, directs it to this single-payer insurance program, raises additional revenue on the back of those who can least afford it, and charges states with the job of actually running it.

Each state, in theory, would have its own program that follows basic guidelines and the vast majority of the funding (80-90%) is provided by the federal government.  Nonetheless, for states that refuse to run their own program, federal authorities - specifically, a Board - can do so instead. Sanders' bill would also ban the sale of private health insurance.

Still looking for the problem here, Spandan.

Here it is. Severability of enforcement of a law. In general, if courts find that one part of a law is unconstitutional or unenforceable, the rest of the law not affected by such ruling still remains in effect. Therefore, all that would be needed to dismantle all American health care - especially the public responsibility part of it - is for a single part, say, the the part that allows the federal authority to set up a state program if the state is responsible for even part of the funding to be struck down.

A state can easily submit a subpar plan, get rejected by the federal Board, in turn reject federal funding, sue the federal government for setting up a program and making it (the state) pay for it, and win. Sanders' bill requires that funding in no event be greater than 91% of expenses in a state (Sec. 604), and it requires that states pay for the expenditure that is above an estimate provided by the federal government, so that is not only a possibility, it is a likelihood.

Given the Supreme Court's decision to allow states to opt out of the Affordable Care Act's Medicaid expansion even though the federal government would cover 90% of the costs in perpetuity, courts would more than likely find that in fact, the federal government can't set up a program in a state if the state is at all responsible for the funding and refuses to accept it. Further, things don't even have to get to the Supreme Court. A single federal court - a single federal judge - can wreck havoc simply by refusing to stay their adverse decision as even temporary damage would be too large to repair.

If courts invalidate just that part of a hypothetical Sanders law, remember that the remainder of the bill would remain in effect. In other words, if the courts block a federal authority to set up a health insurance body in a state in which it is unwelcome, the defunding of Medicaid, Medicare, CHIP, and ACA exchanges remain in full effect, leaving the residents of those states - including their elderly citizens - with only private insurance as an option for health coverage.

The other, though certainly not mutually exclusive, possibility is that courts strike down the ban on the sale of private insurance just because the government also provides certain benefits. If a ban on private insurance is struck down, there would be immediate appeals of those who wish to obtain private insurance that they not have to pay any of the costs associated with the public system, which the courts are also likely to grant. Because the relatively affluent are the most likely to take advantage of this "out", it would starve the entire public system of the additional revenue it needs to effectively fund a "Medicare for All" type system.

Which brings us to funding. Sanders' funding mechanism punishingly cruel to low-income workers, small businesses, and the self-employed. Sec. 811 imposes an additional 6.7% payroll tax on the employer side, which self-employed individuals also have to pay, and increases income taxes by an additional 2.2% on most everyone. This means that a self-employed income earner would pay 8.9-percentage point more in federal taxes (a self-employed individual making $50,000 a year would go from paying roughly 38% of their income in taxes, including payroll taxes, to paying almost 50% in federal taxes), the local bakery would have to pay 6.7% more in payroll taxes, and the mom working minimum wage at McDonald's would have to shell out an extra 2.2% of her income in taxes.

In effect, Sanders' bill makes health care more expensive for the most vulnerable. People who are eligible for Medicaid now at no cost and no premiums would have to pay money they cannot afford out of their paychecks. Struggling new small business owners that can now rely on the Affordable Care Act health insurance exchanges for insurance for themselves and their employees would have to find additional money to pay for the hightened payroll tax (any guesses to where they would find this)?

To add insult to injury, Sanders' plan imposes no additional burden on large corporations, and only nominal extra taxes on the incredibly wealthy.

We already knew that Sanders' world is one of fantasy. Now we know his fantasy includes financially torturing low and moderate income Americans.

Chelsea Clinton was right. Even residents of the Sanders fantasy world cannot discount that this dream law of theirs would not be allowed to stand without lawsuits and all it would take for the entire public health care system to unravel is one single part of one single lawsuit to be successful the way the Medicaid expansion was stifled. In the case of the ACA, the states that rejected the Medicaid expansion only stripped its potential beneficiaries of health care, but a similar lawsuit success for a hypothetical Sanders law, at a minimum, would dismantle all public funding of health care in a given state as the sections stripping funding from the current system is allowed to stand.

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