Medicare for All could require nearly $3 trillion per year in additional federal spending. We modeled what that could mean for your tax bill.

Key Takeaways

  • Medicare for All would require roughly $1.37 trillion to $2.73 trillion in additional federal spending in a single year, based on Congressional Budget Office estimates adjusted to 2026 dollars.
  • If the cost were spread across taxpayers, middle-class households could pay up to $10,500 more in federal taxes each year.
  • If the entire cost fell on the top 1% of earners, a family’s annual tax bill could be more than 100% of their annual income.

If Democrats win control of the House this year – as all the polls suggest they will – expect Medicare for All to be front and center on the Congressional agenda.

A record 163 Democratic House candidates support Medicare for All or a similar single-payer healthcare system. Rep. Ro Khanna, a leading voice among progressives, called for a floor vote on Medicare for All if Democrats take the House.

At its core, Medicare for All is simple: all Americans receive the government-provided health insurance that seniors over 65 receive today, except without premiums, copays, and out-of-pocket expenses. The number of people covered by Medicare would go from 71 to 340 million overnight.

Paying for it is more complicated.

The Congressional Budget Office (CBO) has estimated that different versions of a single-payer system like Medicare for All would increase federal spending by trillions of dollars each year.

But what would that mean for regular people?

In reality, Congress might try to rely on borrowing for a good chunk of the funding, further ballooning our $40 trillion national debt and making a debt crisis – like the one No Labels wrote about in Nightmare on Main Street – that much more likely.

But No Labels assessed what it would look like if Medicare for All were fully paid for with new revenues. We modeled three broad approaches to financing it: one where all taxpayers chip in, one collected entirely from the top 10% of earners, and one relying exclusively on the top 1%.

How Much Would Medicare for All Cost?

In 2020, CBO evaluated five different models of single-payer healthcare. Depending on program specifics (provider payment rates, patient cost sharing, benefits, and coverage of long-term care), CBO found that federal health spending in 2030 would be $1.5 trillion to $3 trillion (in 2030 dollars) higher than under current law.

Adjusted to 2026 dollars using CBO inflation projections, that works out to approximately:

$1.37 trillion to $2.73 trillion in additional federal spending per year.

How Much Would Taxes Rise?

Our analysis uses CBO data on effective federal tax rates to estimate what households at different income levels currently pay. Those rates include individual income, payroll, corporate, and excise taxes. For consistency, we use CBO’s income ranges for three-person households – think two parents and a child. The dollar figures shown represent the midpoint of each income bracket (except for the top bracket, which has no upper limit, so we used an illustrative example amount).

Under the most straightforward approach, the additional costs of Medicare for All get distributed across taxpayers proportionally to the federal taxes they already pay. The middle-income bracket, for example, currently pays 9% of all federal taxes, so they get assigned 9% of the costs of Medicare for All.

Get the Data
Spreading the cost of Medicare for All across all taxpayers would mean substantial tax increases for the middle and working class.
Income group Annual household income Effective Federal Tax Rate (Current) Effective Federal Tax Rate (New) Additional Annual Taxes
Bottom 20% $30,000 0.50% 0.65–0.81% $46–$93
Second 20% $81,000 9.50% 12.44–15.38% $2,383–$4,766
Middle 20% $127,000 13.40% 17.55–21.70% $5,270–$10,539
Fourth 20% $192,000 17.30% 22.66–28.01% $10,285–$20,571
Top 20% $450,000 26.00% 34.05–42.10% $36,230–$72,459

While most of the added costs are concentrated at the top, the middle and working classes would still receive a hefty tax bill.

A three-person family making $127k combined (the median combined income) could pay up to an additional $10,500 in federal taxes every year under Medicare for All.

CBO also estimates that gross domestic product (GDP) – a broad measure of the size and health of the economy – would be 1-10% lower under Medicare for All. So in addition to losing more money to taxes, Americans would have less money overall.

But progressives don’t typically call for across-the-board tax increases. Sen. Bernie Sanders’s Medicare for All financing plan, for example, shields working-class households from new taxes while placing much of the burden on higher earners. So the second approach in our analysis looks at what happens if the top 10% of income earners pay the entire added cost of Medicare for All.

Get the Data
Well-off families would have to spend well over half of their income on taxes under this Medicare for All projection.
Income group Annual household income Effective Federal Tax Rate (Current) Effective Federal Tax Rate (New) Additional Annual Taxes
91st–95th percentiles $393,000 23.00% 38.77–54.54% $61,971–$123,943
96th–99th percentiles $752,000 26.20% 41.97–57.74% $118,581–$237,163
Top 1% $1,000,000 32.40% 48.17–63.94% $157,688–$315,376

When the pool of taxpayers shrinks, the size of the tax increases rises sharply. Under the highest-cost scenario, effective federal tax rates would rise above 50% for households across the top 10% of earners, reaching nearly two-thirds for top earners.

And remember, these are effective rates across a household’s entire income – not marginal rates that apply only to the highest dollars earned.

The top 10% are certainly well-off, but they’re not all “millionaires and billionaires.” So our final analysis is of the “tax the rich” approach often advocated by leading progressives, where the top 1% of earners bear the entire brunt of Medicare for All’s cost.

Get the Data
 
Relying on the top 1% alone to finance Medicare for All could result in tax bills higher than a household’s annual income
Annual household income Effective Federal Tax Rate (Current) Current Tax Bill Effective Federal Tax Rate (New) New Tax Bill
$1,000,000 32.40% $324,000 70.87–109.33% $708,670–$1,093,339

Under the highest-cost scenarios, families earning $1+ million per year could end up owing more in taxes than they earn in income.

Whatever your views of taxes are, this is a plainly untenable setup. No one would continue working when they’re losing all of their paycheck – and then some – to taxes. They would either retire early or leave the country (and take their tax dollars with them).

So, How Much Would Medicare for All Cost You?

There is no single answer.

It would depend on your income, how Medicare for All is designed, and how Congress chooses to finance it. But all signs point to even working-class Americans having to pay thousands of dollars in new taxes every year if Congress wants to pay for the program without new borrowing.

Frequently Asked Questions

How much would Medicare for All cost?

CBO estimated that the illustrative single-payer systems it analyzed could increase federal health subsidies by $1.5 trillion to $3 trillion in 2030 compared with current law. Using CBO inflation projections to express those figures in 2026 dollars produces a range of approximately $1.37 trillion to $2.73 trillion in additional federal spending in one year.

Would Medicare for All raise taxes?

Yes. The size and distribution of any tax increase would depend on how Congress chose to pay for the program. This analysis models several hypothetical ways that additional revenue could be raised.

How much could a middle-class family’s taxes increase under Medicare for All?

If the additional cost were distributed proportionally across taxpayers under No Labels’ model, a household earning roughly $127,000 could pay up to $10,500 more per year in federal taxes.

Could taxing the rich pay for Medicare for All?

Mathematically, concentrating the entire financing burden on the top 10% would require much larger tax increases on those households under our assumptions. Households could end up paying more than half of their income on federal taxes each year under No Labels’ model.

Could the top 1% pay for Medicare for All by themselves?

Under the No Labels model, financing the entire additional federal cost of Medicare for All through the top 1% would require extremely large increases in federal taxes. At the upper end of the cost range, the tax bill for wealthy households would exceed their annual income, which raises the question: If the government took every dollar you earned in taxes, why would anyone work?

What would the impact of Medicare for All be on the overall finances of the federal government?

Medicare for All would move a much larger share of U.S. health care spending onto the federal budget. CBO estimated that the single-payer systems it examined could increase federal spending by roughly $1.5 trillion to $3 trillion in a single year.

Washington would have several ways to finance that increase. It could borrow more, adding to deficits and debt that are already historically high. CBO projects a $1.9 trillion federal deficit in 2026 and debt held by the public equal to 101% of GDP, rising to 120% by 2036 under current law.

It could instead raise taxes or reduce other federal spending enough to cover the added cost, or use some combination of borrowing, taxes, and spending reductions. As the calculations in this analysis illustrate, fully covering the additional cost through taxes alone could require very large increases, depending on who pays.

But even fully financing Medicare for All would not eliminate the federal government’s existing fiscal problems. Social Security’s retirement trust fund is projected to exhaust its reserves in 2032, at which point continuing revenue would cover about 78% of scheduled retirement benefits absent legislative action. The federal government is also projected to continue running substantial deficits under current law.

What would Medicare for All tax increases do to economic growth?

CBO has estimated that financing a single-payer health care system with large income or payroll tax increases could significantly reduce economic output.

CBO estimated that GDP in 2030 could be roughly 1% to 10% lower than under current law if the system were financed through an income tax or payroll tax. The size of the effect depends on both the design of the health care system and how the government raises the money to pay for it.

The reason is that higher tax rates can change economic incentives. CBO finds that higher marginal taxes on labor reduce the incentive to work, while higher taxes on capital can discourage saving and investment. In the short term, tax increases can also reduce demand by leaving households with less after-tax income to spend.