Here’s What It Costs…

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?

Calculation:

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


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