Sep 18, 2019 - Health

Workers aren't so sure "Medicare for All" would raise their wages

Illustration of a pill bottle casting a shadow of a businessman

Illustration: Sarah Grillo/Axios

Advocates of a single-payer system may have a hard time persuading workers that their wages would go up if their employer-based health care went away.

Why it matters: “Medicare for All” would bring an enormous amount of change to the health system, and the disruption of employer-based insurance is already an important political flashpoint.

"For a socialist, you've got a lot more confidence in corporate America than I do,” former Vice President Joe Biden said to Sen. Bernie Sanders at last week’s Democratic debate, in response to Sanders’ assurances that employers would raise wages if they were no longer paying for health benefits.

By the numbers: Sanders’ view is an article of faith among most economists, but a majority of Americans aren’t so sure.

  • In a new Kaiser Family Foundation poll, 63% of people surveyed said they thought their wages would stay the same if their employers’ health costs went down; another 5% weren’t sure.
  • Just 32% said they thought their wages would go up.

Between the lines: It is likely true that employers would reap big savings if the government took insurance off their hands, and that many would plough savings back into wages, as economists believe.

  • It’s just that workers don’t necessarily believe those savings will end up in their paychecks, creating an additional challenge for selling Medicare for All.
  • Wage growth has been sluggish lately, making workers generally dubious that wages would increase.
  • Or it could simply be because they don’t trust their employers for any number of reasons.
  • Savings might also be offset if Medicare for All is financed by a substantial payroll tax.

My thought bubble: Economic orthodoxy aside, it’s not a crazy concern. As an employer, I know there are many competing priorities, including wage increases, vying for the windfall if our health costs went away.

The bottom line: One big knock on “Medicare for All” is voters’ distrust of government. But distrust of employers could matter, too.

  • It’s possible that lower-wage workers, who generally have lousier coverage, will be more willing than their higher-income counterparts to trade it in for something new.
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