Currently, total medicare spending is about a fifth of total medical spending in the US, so if you put everyone on it and assumed that there were no savings from moving everyone onto Medicare, you’d need a payroll tax of 15% to cover it (five times the current Medicare payroll tax).
But then you’d presumably no longer need to fund Medicaid, Tricare, etc and all the other federal health programs. These programs account for about two fifths of total spending, so if you took those savings and put them towards funding your new Medicare recipients, you’d really need a payroll tax of 9% (or 6% added to the current tax of 3%).
So take a 9% payroll tax as a conservative estimate. In reality, you’d have a decent amount of savings from moving everyone to Medicare, and the real number would be a point or two lower.
(also, note that assumes the new Medicare would assume all medical spending in the US: dental, perscription drugs, copays, etc. In reality, real Medicare doesn’t cover all these things, so presumably new medicare wouldn’t either, and the price tag would go down further from the 9% number)
That’s the Lower Earnings Limit which, despite the name, is not the point at which you start paying NI (you do get NI credits from that point, though, i.e. you accrue benefits as if you had paid). The point at which you start making actual NI contributions is the Primary Threshold, currently £139pw, very similar to the income tax threshold.
Tricky blighter, National Insurance.
One thing to think about is that the lower reimbursment rates of Medicare aren’t sustainable since a lot of providers lose money on Medicare patients. Instead of negotiating a sustainable or profitable rate with private insurers, Medicare tells the providers what they are going to get paid, and with few exceptions that they have to take it.
They don’t have to take Medicare (except for things like emergency care where they can’t turn any patients away). They take it at a lower rate because the elderly are the bulk of their business and they can’t afford not to. But its not true providers are forced to take medicare at a loss, and indeed those that do feel they’ll lose money seeing medicare patients do refuse to accept payment through medicare.
Just Googling around a bit, Daily Kos claims that, “A 1% sales tax should generate 75 billion a year.”
Playing with a few numbers, consider that Medicare cost $523 billion in 2010. So in theory you’d need a 7% sales tax to just pay for that alone.
That covered 48 million Americans, so that’s $11,000 per person, is that right? Seems insanely high. Anyway, if there are 320million Americans, we’d need almost $3.5trillion. That would require a sales tax of about 46%. If we subtract the originally 48million the number drops to 39% sales tax.
To put that into perspective, a $500 iPad would cost you $695.
In Canada, there is a sales tax that is estimated to generate about $5billion per year per percentage point. At this point you’ll realize that there are a million ways to apply a sales tax. Wiki says that in 2009 Canada spent $137.3 billion or $4,089 per person. So technically we’d need a 27% sales tax, instead it’s funded by a mixture of taxes and fees along with a 5% federal sales tax.
If the US spent the same $4k per person, the program would cost about $1,280billion. That would require a 17% sales tax, assuming the $75billion per percent from Daily Kos, and that includes all the seniors currently on Medicare.
You can’t assume that Medicare costs can be applied proportionately to the rest of the population, because Medicare covers people over 65 and people with disabilities. Providing medical care to everyone else costs much less per head.
It’s somewhere between Canada’s $4000 and Medicare’s $11,000. That translates into a low of 17% vs a high of 46%. Both based on the assumption that a 1% national tax could generate $75billion.
There is no such thing as an accurate number in this discussion, simply ranges that give a ballpark estimation.