Fact or Fiction: Bernie Sanders Claims Self-Employed Families Pay $28,000/Year for Health Care

Bernie Sanders
Carlos Barria/Reuters

On April 15, Sen. Bernie Sanders (I-Vt.) became the first and only presidential candidate so far to attend a Fox News town hall for the 2020 cycle. In the midst of a heated exchange regarding the cost of health insurance, Sanders claimed that the average self-employed family of four pays $28,000 a year for health care.

Question

Does Sanders’ statement correctly characterize the health care costs for the average self-employed family?

During the Fox News town hall, Sanders attempted to explain how he would pay for his “Medicare for All” system. To make his point, Sanders offered up a hypothetical picture of what the single-payer system could look like for the average self-employed family of four:

“Let’s just say, hypothetically, you are self-employed, and you have — you’ve got a husband and two kids, OK? Family of four. You know how much that family is paying today for health care? $28,000 a year.

[…] We are saying to that family of four, ‘You ain’t gonna pay that $28,000. You’re not paying any more premiums, you’re not paying any more co-payments, you’re not paying any more deductibles. How’s that?’ $28,000, you’re not paying. But does that mean you’re not gonna pay something? Of course it does. You’re going to pay more in taxes.”

Watch the video below:

Research

Sanders appears to be alluding to data from the 2018 Milliman Medical Index (MMI). The MMI reported that the average cost of health care in 2018 for a typical family of four who gets its insurance through an employer was $28,166. The MMI broke down the costs into the following three categories:

  • 56% ($15,788) – Employer contribution
  • 27% ($7,674) – Employee contribution
  • 17% ($4,704) – Employee out-of-pocket

However, Sanders is specifically discussing a “self-employed” person who would be purchasing insurance through the health insurance exchange. Sanders appears to be using this data as a proxy for the figure for the self-employed family.

IJR reached out to a number of sources, including the folks at HealthCare.gov, to try to find information on what the average family of four who purchases insurance through the exchange is paying, but there doesn’t seem to be a national database where these numbers are calculated.

There are a few reasons for this. First, the costs of going through the exchange vary from state to state. Also, depending on a person’s income, many people who purchase health care via the exchange are eligible for partial subsidies, which result in fluctuating costs.

Additionally, according to a Gallup poll, a rising number of people may have elected not to get health insurance altogether in 2018 due to factors such as the repeal of the Affordable Care Act’s (ACA) individual mandate and the rising costs of the premiums associated with the ACA health insurance plans.

In order to get a more definitive conclusion as to whether or not it was appropriate to utilize the MMI’s data to speculate about the health care costs of self-employed individuals, IJR reached out to Jeremy Engdahl-Johnson, who is the director of media relations at the New York branch of the MMI.

“The Milliman Medical Index measures the health care costs for a typical American family of four covered by an employer-sponsored PPO,” Engdahl-Johnson said when asked about the extent to which one could argue that self-employed individuals face the same costs.

Fact or Fiction

Fiction.

There are simply too many factors at hand (fluctuating costs, subsidies, the uninsured) for Sanders to assume that the MMI’s numbers are cross-applicable to the self-employed family. Sanders claimed that self-employed families are paying $28,000 a year in health care costs and that “you ain’t gonna pay that” anymore under Medicare for All.

Even when examining the employee who does get insurance through an employer, this claim doesn’t hold up. As stated above, the MMI differentiates between the money that an employer spends toward an employee’s health care costs and the contributions the employee makes. Of the $28,166, an employee actually pays $12,378.

While the figures above indicate his plan is likely to save families some money, the amount he arrives upon is an overstatement that falsely bolsters what it truly stands to save the average family.

In light of the assumptive nature of Sanders’ leap that the self-employed family is paying the same as the family who gets insurance through an employer, as well as the fact that he is overstating what the latter family pays in the first place, IJR rates this claim as fiction.

IJR made numerous attempts to reach out to Sanders’ campaign for comment regarding the data pool used to come up with the figure and clarification on some components of Sanders’ position but had not received a response at the time of publication.

What do you think?

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Don McCanne
Member

Virtually all economists agree that the employer contribution to the health insurance premium represents forgone wage increases, therefore the $28,000 does represent the health care costs for the typical working family of four. Further, our national health expenditures are now $10,739 per person (CMS data) which would be $43,000 for a family of four except that working families are typically healthier than the overall general population, thus they pay an average of “only” $28,000.

Chuck McEachern
Member

As a Self Employed family of six 28-30k a year is about what I payed in Premiums, deductibles and coinsurance. For reference I only make about 65-70k a year. I say payed because there was not an insurance option for us in GA last year or this one. And yes we get s deduction but only on personal side. Should be on business side like it was in 2010. Bernie can spew all the crap he wants but none of the idiots in Congress are trying to do anything about it.

Ed
Member

That’s almost exactly what I pay for healthcare each year. The numbers are just about spot-on what my employer and I pay, according the the benefits statement I get each year. Healthcare is almost 20% of our entire economy. The costs are so well hidden from the average person that most don’t even know how much they’re really paying.

Mark Simmons
Member

I personally know a number of people in the health care industry who interact regularly with members of Congress and their staffs. They tell me they are clueless about the subject. …and they have lots of real life stories to back up their assessment.

Vic Stewart
Member

Who cares what the idiots in the movie industry think? Trump is not a politician, he’s a NY’er.
What he’s accomplished speaks for him. As for Sanders and the other liberal wannabes, they should keep their day jobs . . . if they can.

TOM
Member

As someone on Medicare it costs me a fortune and covers nothing. Let us not forget that after ramming Obummercare down our throats that Bernie as a member of Congress exempted themselves from having to have Obummercare. As a 77 year old he should be on Medicare but I am sure that he has a way around that and when he gets his Medicare for All that Congress will exempt themselves from having to have Medicare.

TOM
Member

It seems that the author is smoking something just as funny as what Bernie is.
If you are self-employed, your spouse does not work somewhere else that provides health insurance, and you have a family of 4 you may well be paying close to $28,000 / year for health insurance. But you are getting real insurance, with dental and vision. There is also likely someplace in the self-employment tax forms where you can write off that health insurance cost.

Craig
Member

So, an uninsured millennial who pays nothing now will get his taxes tripled under Bernie’s plan. You will get Bernie’s plan whether you like it or not, whether you want it or not. Say good-bye to lattes.

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