Harris-Walz Would Dismantle Private Health Insurance, Reducing Access to Care and Requiring Massive Tax Hikes

Vice President Kamala Harris and Governor Tim Walz support a government takeover of private health insurance. Under their leadership, Americans would see their access to quality health care limited, medical innovation would be dwindled, and their plans’ enormous costs would require massive tax hikes.

During her run for President, Kamala Harris said in a post-debate interview with CNN’s Anderson Cooper that, under her Medicare for All plan, all Americans would be taken off of their private health insurance plans.

In 2017, Harris was the first Senator to co-sponsor Senator Bernie Sanders’ Medicare-for-all bill. If passed, this bill could raise taxes by $26,000 per household per year. Further, this proposal goes even further left than most foreign versions of socialized medicine. Canada, for example, has about 30 percent of its healthcare spending coming from the private insurance market. The Sanders-Harris proposal would have had none. 

In 2018, Governor Tim Walz ran on implementing a public health insurance option, stating in his 2019 inaugural address as Governor, “We must also reaffirm our Minnesotan value that health care is a basic human right.” A “public option” is a government-run, taxpayer-funded healthcare plan competing with the private sector.

A public option is merely a step towards the Left’s ultimate goal of socialized healthcare, replacing patient-centered healthcare with one-size fits all care as dictated by federal bureaucrats.

Both proposals would limit Americans’ access to health care, would threaten the United States’ role as the place to innovate, and would lead to disastrous tax hikes. The Harris-Walz vision for healthcare is radical, even according to Democrats.

The Harris-Walz Admin Would Limit Access to Quality Health Care

A public option health plan relies on the government setting arbitrarily low payment rates for providers. In other words, any reduction in costs is through the use of price controls that cut pay for doctors, hospitals, and other healthcare providers by reimbursing providers less than typical commercial plans. This is already the case with government healthcare programs.

Advocates of the public option inaccurately claim it would increase competition. This is false – there is no true competition because socialized healthcare would “compete” with the private sector. The federal government would not have to be sensitive to prices or worry about turning a profit and could leverage its massive size to price out competitors. ​ For instance, a government health plan could keep premiums and deductibles artificially low and offer other incentives to enrollees that private plans could not.

Compared to employer healthcare, hospitals could see a 50 percent pay cut if Medicare payment rates were adopted, while physicians could see a 30 percent pay cut, according to a study by the Kaiser Family Foundation reviewing 19 recent studies.

Medicaid payment rates are even lower. In 2016, Medicaid reimbursed 72 percent of what Medicare reimbursed, according to an analysis by Health Affairs. As noted by former CMS administrator Seema Verma, the low reimbursement rates provided by Medicare and Medicaid are a major impediment to care and many providers opt out of serving these populations because they lose too much money from doing so. This will not just harm healthcare providers, it will harm Americans that receive this care. Of course, under a fully socialized system (which Kamala Harris has endorsed), these effects on providers, and thus patients, would be even more disastrous.

By relying on price controls and price setting, both a public option and a fully socialized system would create healthcare shortages that harm American patients across the country.

Healthcare shortages occur often in developed nations with government-run health care systems. Many countries experience understaffed hospitals and long waiting lines for even basic treatment. 

In 2019, The United Kingdom had a shortage of 10,000 doctors and 43,000 nurses, with 9 in 10 managers in the National Health Service saying that too few doctors and nurses presented a danger to patients. At any one time, 4.5 million patients were waiting for hospitalization.

In Canada, the typical patient had to wait a record 21.2 weeks – or five months – to receive treatment from a specialist after being referred by their general practitioner in 2017. By comparison, 77 percent of Americans are treated within four weeks of referral, while just 6 percent wait more than two months. 

Before the pandemic, the U.S. had 35 intensive care unit beds per 100,000 people – nearly three times the 12 beds Italy and five times the 7 ICU beds in the UK.

In 2018, the UK’s National Health System (NHS) cut or restricted access to 17 medical operations which they deemed ‘unnecessary’ in order to cut costs. In every country where it’s been tried, a single-payer system eliminates choice and gives government the power to make healthcare decisions for regular people, often to their detriment.   

The fact is, most Americans are happy with the care they already receive. 180 million Americans currently receive high quality healthcare through employer provided health insurance plans. According to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates, 81 percent of Americans were satisfied with their employer provided care.

Harris-Walz Proposals Would Lead to Less Medical Innovation

In addition to poor care and long waits, socialized medicine would reduce innovation, thus limiting future access to lifesaving, life-changing treatments. The U.S. is currently a world leader when it comes to medical innovation.

The world has greatly benefited from, and relied on, profit incentives existing for pharmaceutical manufacturers in the United States. Without it, medical science would be decades behind where it is today.

According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures, a rate far greater than comparable foreign countries. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent. 

Price controls and low reimbursement rates threaten pharmaceutical manufacturers’ ability to recoup the money they invested in research and development. Thus, socialized healthcare increases the cost of innovation. To be clear, the cost of innovation is already radically high.

Politicians like Harris and Walz develop their policy positions under an assumption that manufacturers are charging high prices to squeeze consumers and receive incredible profits. This is false.

During an average drug development process, a manufacturer must invest an average of $2.6 billion and spend 11.5 to 15 years in research and development. Even so, most drug development programs fail.

As detailed by Stephen Ezell of the Information Technology & Innovation Foundation (ITIF), as little as 0.05 percent of drugs make it from drug discovery to clinical trials. Of the few medicines that make it to clinical testing, only about 12 percent of medicines that begin clinical trials are approved for introduction by the FDA. Even if a drug is approved, it is likely that the profits from said drug will not recoup its R&D costs. One study in the Health Economics journal found that 80 percent of new drugs made less than their capitalized R&D costs.

Starting a new drug program is, statistically, an almost guaranteed financial loss for drug manufacturers. Simply, it is bad policy to add on to already-high risks. Especially because, in doing so, countless life-saving and life-preserving medications will not be made.

Harris-Walz Proposals Would Lead to Trillions in Middle-Class Tax Hikes 

A national public option will cost an estimated $800 billion per year, according to a study by Lanhee J. Chen, Tom Church, and Daniel L. Heil of the Hoover Institution. This equates to a tax hike of $2,000 per year on middle income families, could require a top income tax rate of 60 percent, or payroll taxes on families totaling $3,900 per year.

Given the public option is an incremental step toward increased government control over healthcare, this would be the first tax hike of many. Of course, the person on the top of the ticket would prefer to start with full government control over healthcare.

The Medicare-for-all plan Kamala Harris endorsed as a Senator would increase taxes by $14.3 trillion over the next decade. This would pay for roughly half of the cost of single payer healthcare, which costs between $32 trillion and $36 trillion according to estimates. 

By Senator Sanders’ own admission, Americans making more than $29,000 per year would pay more in taxes under Medicare For All. This plan would undoubtedly be footed by middle-income taxpayers, with estimates showing the program could raise taxes by $26,000 per household per year.  Of course, this would violate Kamala Harris’s pledge to not raise any tax on anyone earning less than $400,000. 

A majority of these taxes would be on the middle class, not “the rich.” The Committee for a Responsible Federal Budget finds that “impossibly high taxes on high earners” would raise just one third of the total cost. The rest — some $20 trillion – would come from us. 

The list of proposed tax hikes in the Sanders-Harris plan are unfathomable. They include, but are (certainly) not limited to the following:

• A New, 4 Percent Employee Payroll Tax. This would impose another 4 percent payroll tax on employees which he calls an “income-based premium paid by employees.” This increases taxes on American families and individuals by $3.9 trillion.
• A New, 7 Percent Employer Payroll Tax. This would impose another 7 percent payroll tax on employees which he calls an “income-based premium paid by employers.” This is a $3.5 trillion tax increase over ten years.
• Eliminating Health Tax “Expenditures.” The proposal would ban employer-provided insurance and repeal the deduction for health care, increasing taxes on businesses by over $3 trillion over a decade.
• Repealing Health Savings Accounts, which are utilized by an 35.5 million Americans. These tax advantaged savings accounts largely benefit the middle class – roughly half of all HSAs are owned by families earning between $60,000 and $200,000. In all, this will increase taxes on families and businesses by $4.2 trillion.
• 70 percent top tax bracket for ordinary income and capital gains income. This would give America the highest income tax rate in the world. According to the Tax Foundation, a top 70 percent rate for ordinary income and capital gains income above $10 million will raise $51.4 billion over a decade. After accounting for macroeconomic effects, the proposal would actually cost the government $63.5 billion because the proposal suppresses investment and economic growth.
• 77 Percent Death Tax. This would raise the death tax rate to 77 percent for inheritances. Under the proposal, the death tax would kick in at $3.5 million with a rate of 45 percent. This proposal will increase taxes by $315 billion over ten years.

Even Democrats Consider the Harris-Walz Vision for Healthcare Radical

Even Joe Biden, the most progressive U.S. President to date, slammed Medicare-for-all proposals during an interview with KWWL , stating that it will raise taxes on the middle class and is “totally unrealistic”:

“Bernie Sanders, who up to this time has been honest about the need to raise taxes including the middle class is now saying ‘well, I don’t have to have a plan, I don’t have to tell you how much it will cost now, there’s time.’ And Elizabeth Warren is saying she’s going to come up with a plan. It is totally unrealistic and can’t be done. My plan can occur the day after I’m elected, we can get it done, you don’t have to wait 5-10 years to get it done. I’m not criticizing them personally but look there’s a little truth in advertising here. Bernie and Elizabeth: How much is your plan going to cost?”

In 2019, Joe Biden echoed the same sentiment in a tweet:

“Let’s put this in perspective: if you eliminate every single solitary soldier, tank, satellite, nuclear weapon, eliminate the Pentagon and it would only pay for 4 months of Medicare for All. 4 months.

Where do the other 8 months come from? Your paycheck.”

President Barack Obama’s former Chief of Staff Rahm Emanuel also slammed the Democrat party’s obsessive focus on socialized medicine in an appearance on ABC’s “This Week”:

“That is an untenable position for the general election…I just biked around Lake Michigan, nearly 1,000 miles, through Michigan and Wisconsin, two really important states. Nobody at a diner ran at me and said, take my healthcare away. Nobody. This is — this is reckless as it relates to — and you don’t have to take the position to win the primary. And you’re basically literally hindering yourself for the general election.”

While the Democratic party is more radical than it has ever been, its leaders still believe this ticket’s proclaimed policy positions are too extreme.

A socialized healthcare system would lead to massive tax increases on middle-income Americans, would reduce access to quality care, and would decimate medical innovation. This should, and must, concern voters.