Private insurance cover under threat from latest Sanders proposal

Democratic nomination contender releases $1.3 trillion plan that would have far reaching ramifications for health insurers

Insurance News


Arit John and Alex Wayne

Vermont Senator Bernie Sanders laid out an ambitious $1.3 trillion plan to remake the U.S. healthcare system, in which the government would pay most Americans' medical bills in place of private insurers.

Sanders' plan, released hours before he confronts Hillary Clinton in a Democratic primary debate, would go far beyond the Affordable Care Act that she supports. He would upend healthcare in the nation, essentially swapping higher taxes for most individuals and businesses for the private insurance premiums Americans pay today. Overall, Sanders said, his plan would save the nation $6 trillion over the next decade.

“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 announcing the plan. “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.”

Under the Sanders proposal, health care would be paid for by a 2.2 percentage-point increase in the individual income tax, a new 6.2 percent health care payroll tax on employers, higher estate taxes on wealthy Americans and a “more progressive” tax code, including higher tax brackets for the wealthy.

While the current highest tax bracket is 39.6 percent for Americans making $415,051 and more, the proposal calls for a 43 percent tax rate on income between $500,000 and $2 million; a 48 percent rate on income between $2 million and $10 million; and a 52 percent rate on income above $10 million. The Sanders campaign estimates his health plan would cost $1.38 trillion a year. 

Hillary Clinton's campaign has targeted Sanders's proposal, saying it would be a massive tax hike on middle class families and demanding details on his payment plan before the Iowa caucuses. He and Clinton are expected to continue to spar Sunday night over his health care plan as well as his voting record on guns. 

In a statement responding to Sanders's plan, Clinton spokesman Brian Fallon noted that Sunday's plan differs from past single-payer bills the Vermont senator has introduced in Congress. Fallon also knocked Sanders for introducing the plan so close to the start of the debate, after also announcing his support for repealing immunity for gun manufacturers on Saturday.

“After weeks of denying the legitimacy of the questions Hillary Clinton raised about flaws in the health care legislation he’s introduced 9 times over 20 years, he proposed a new plan two hours before the debate,” Fallon wrote. “When you’re running for President and you’re serious about getting results for the American people, details matter—and Senator Sanders is making them up as he goes along.”

Sanders has argued that, despite whatever taxes included in his health care plan, Americans would save money because they would no longer pay for private insurance. “If you were paying $10,000 in private health insurance and I said to you, guess what, you ain’t going to pay that $10,000 and more but you’re going to pay $5,000 more in healthcare premiums, you’d be jumping up and down for joy,” Sanders told Time magazine Sunday. “You save $5,000 on your healthcare bills.”

While Sanders will be forced to debate his plan with Clinton, he'll eventually have to contend with opposition from the health care industry and voters' reluctance to pay higher taxes. In December 2014, Sanders' home state of Vermont abandoned its push for a single-payer system because the proposed tax increases on business and individuals were considered too high. 


Keep up with the latest news and events

Join our mailing list, it’s free!