Computing the Payroll Deduction for Medistate:
Some basic data:
Medicare payroll tax: 1.45% for employee, 1.45% for employer, total 2.9% collected.
Payroll deductions fund approx 38% of Medicare program; 41% is funded by general revenues and 13% by premiums. Remaining 8% is other (trust fund?)
Medicare covers approximately 13% of population.
Medicaid covers approximately 20% of population.
Together Medicare and Medicaid cover approximately 33% or 1/3 of nations population.
Medicare, nationwide, spends about $10,500 per enrollee annually.
What will it cost to care for the remaining 67% of the population that Medistate will cover?
To completely fund Medicare by payroll deduction, i.e., no general revenues, no premiums or trust fund contributions, would take increasing payroll deductions to 100/38 X 2.9%, or 7.6%.
If caring for the 67% percent younger population cost the same as the 13% 65+ year population, or about 1/5 the cost per person, than you will need to collect 8% total from the payroll deduction to fund Medistate in its entirety .
If employers and employees split the cost, the price is 4% each.
Example: For a middle class New York family with two wage earners and children earning together $90,000, that costs the family $300 per month.
Here’s the formula if more accurate price data is available:
(Percent of population to be enrolled in Medistate)/13 (percent of population covered by Medicare)
X (Estimated Medistate cost per enrollee)/(10,500 (per enrollee cost of Medicare))
X 8% = Estimated required total Medistate payroll tax to fund Medistate in its entirety