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Policy Matters: Elizabeth Warren Has a (Fully Paid for) Health Care Plan. Who’s Next?

Ever since the first debate, the question has hounded U.S Senator Elizabeth Warren (D-Massachusetts): Where’s the plan? Never mind that she and several of her Senate colleagues technically already had one in the form of S.1129. No, she needed to release her own plan and answer another question: How are we supposed to pay for it?

This morning, Elizabeth Warren finally answered these two questions with a “Medicare for All” single-payer health care plan that’s fully paid for. Let’s go under the hood to see what’s in there, how she intends to make it work, and what this says about Warren and her 2020 Democratic competitors as they all try to convince voters that they have the best health care plan of them all.

Why are we talking about this?
Photo by Andrew Davey

For over four months, the 2020 Democratic presidential candidates have been arguing over health care. While all of them oppose President Donald Trump’s drive to destroy Obamacare (or the Affordable Care Act [ACA]) and roll back pre-Obamacare health care programs, they disagree on how to build upon it and improve the American health care system that’s still leaving 27.5 million Americans uninsured and additional Americans underinsured (or only having “junk insurance” plans that are mostly “health insurance in name only”).

Some of the Democratic contenders, such as former Vice President Joe Biden and South Bend, Indiana, Mayor Pete Buttigieg, argue that an opt-in public health insurance plan (or public option), more generous consumer subsidies on the Obamacare insurance exchanges, and action to lower prescription drug costs should suffice. Senator Kamala Harris (D-California) is still listed as a S.1129 co-sponsor, but she’s since distanced herself from that bill and instead proposes a hybrid “Medicare for All” system where everyone is technically covered under the Medicare banner, but consumers choose between a public Medicare plan and what will essentially be more generous (but still privately run) Medicare Advantage plans.

Photo by Andrew Davey

Then we have S.1129 original sponsor Senator Bernie Sanders (I-Vermont), who regularly reminds critics that he “wrote the damned bill” for “Medicare for All” single-payer. Indeed he has, but he and fellow S.1129 co-sponsor Elizabeth Warren have come under fire at this year’s Democratic debates for not committing to a plan to pay for “Medicare for All” single-payer. Sanders’ Senate office has merely identified multiple options, including a 4% income-based surtax on workers earning over $29,000 (based on families of four) that functions as an annual premium. Biden, Buttigieg, and other opponents have since seized on these explainers from Sanders’ Senate office to claim Sanders and Warren support “tax increases on the middle class”, even though this would functionally replace private insurance premiums, and even though Warren never proposed this surtax and Sanders merely presented it as an option.

How does Elizabeth Warren’s plan work?
Photo by Andrew Davey

After Buttigieg and other moderates attacked Warren for lacking a specific plan to pay for the “Medicare for All” she and Sanders want at last month’s CNN-New York Times Debate, Warren promised an imminent and thorough “pay-for” plan. This morning, Warren followed through on her promise.

According to her campaign’s policy team and confirmed by Moody’s Analytics chief economist Mark Zandi, MIT professor and former International Monetary Fund (IMF) Chief Economist Simon Johnson, former (Obama) Director of the Centers for Medicare and Medicaid Services (CMS) Dr. Donald Berwick, and former (Obama) Labor Department chief economist Betsey Stevenson as independent experts, the total cost of Warren’s health care plan comes in at $52 trillion from 2020-2029. That may sound like a lot, but it’s virtually unchanged from how much we’ll spend in the next decade if we leave Obamacare as-is.

Photo by Andrew Davey

How does this work, and who pays for it? For one, global budget payment and Warren’s own prescription drug plan (which includes the government manufacturing its own generics if brand-name pharmaceutical companies refuse to lower their prices) shave $7 trillion off the bill. Additional cost savings and re-positioning of current public insurance programs (like the current Medicare and Medicaid programs) into single-payer bring the total bill for new federal health investment down to $20.5 trillion.

From here, Warren proposes a new Medicare tax on employers that will generate $8.8 trillion in revenue over the next decade while bringing employers’ total costs down by $200 billion, as this tax replaces the costs employers have now for providing private insurance to their workers. The independent economists then figure additional take-home pay for workers will result in another $1.4 trillion in tax revenue, and that Warren’s plan to enforce current tax law more thoroughly will bring in another $2.3 trillion. Warren’s proposed corporate tax reforms, such as restoring the top 35% corporate tax rate, cracking down on international tax evasion schemes, and a new 0.1% financial transaction tax on stock, bond, and derivative sales, will bring in another $3.8 trillion. And then, her newly improved “wealth tax” (where top-earning individuals with assets over $1 billion pay a 6% “wealth tax” instead of just 3% under her old plan, while those with assets between $50 million and $1 billion still pay 2%) will bring in another $3 trillion in revenue.

What does this say about the other candidates?
Photo by Andrew Davey

To finish this off, Warren’s economist peer-reviewed plan calls for the elimination of the Defense Department’s Overseas Contingency Operations fund, long criticized by some progressives as the Pentagon’s “slush fund”, which will free up $800 billion in spending over the next decade to redirect to health care. In addition, Warren’s proposed comprehensive immigration reform will generate another $400 billion in tax revenue by providing legal status to immigrants who are currently stuck with undocumented status. All of these tax reforms, policy reforms that generate more revenue, and cost savings add up to the $20.5 trillion needed to shift America into “Medicare for All” single-payer health care.

While Vox’s Ezra Klein casts doubt on whether Warren can truly achieve all these “pay-for’s” along with single-payer, he does acknowledge all the hidden and upfront costs of the centrist candidates’ more modest alternatives due to their reluctance to rein in the prices that the government and consumers pay for health care like Warren and Sanders aspire to with single-payer. As health care super-activist Ady Barkan points out in The Intercept, and as I’ve pointed out in these pages while analyzing Biden’s, Buttigieg’s, and Harris’ respective plans, there’s a real trade-off in authorizing private insurance companies to charge more for health care services in order to preserve the “choice” of private health insurance.

Photo by Andrew Davey

Thus far Bernie Sanders is declining to follow suit with his own specific plan to pay for “Medicare for All” single-payer, but Elizabeth Warren has already shown how she plans to achieve it while keeping costs as low as possible for middle and working-class Americans. Joe Biden’s campaign has already dismissed Warren’s plan as “unrealistic”, but he has yet to specify how he’ll pay for the $720 billion Biden acknowledges he’ll need for his health care plan or how he’ll win over Congressional Republicans when they’re already attacking Biden’s plan as ferociously as Warren’s and Sanders’. 

For the last four months, Joe Biden has attacked Elizabeth Warren and Bernie Sanders for allegedly hiding their secret plan to “raise taxes on the middle class”. More recently, Pete Buttigieg suggested that Warren wasn’t being totally honest about her health care plan while leaving several questions unanswered on his own health care plan, and his campaign continues to cast doubt on Warren’s new plan. Now that Warren is being completely upfront on health care, it’s time for the rest of the Democratic field to follow suit. If they want to convince Democratic voters here in Nevada and elsewhere that they have a better plan, they might as well show us their own facts and figures to prove it.

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