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On Friday, November 1, Senator Elizabeth Warren revealed a plan that sets out how she intends to fund the long term policy goals of her Medicare for All proposal.
Warren’s Medicare for All proposal would dismantle the current healthcare system and replace it with a government-run health insurance program. According to her, “American families are getting crushed by health costs” and “health care is a human right.”
The release of this detailed plan is in response to criticism over an alleged lack of clarity over the Medicare plan.
What is her plan?
Senator Bernie Sanders – US Senator from Vermont and candidate for the Democratic presidential nomination for the 2020 election, envisioned Medicare for All in a 2017 Senate bill. Elizabeth Warren was one of 16 other Democrats that co-signed the bill. The legislation proposed to enroll every American in a “federally administered national health insurance program.” In this system, the federal government would be the sole provider of health insurance. Private insurance, including coverage provided by employers, would be almost eliminated.
The plan released by Warren incorporates many of the benefits outlined in the Medicare For All Act of 2017. Similar to the bill proposed by Sanders, Warren’s Medicare For All plan includes long-term care, audio, vision, dental, and mental health benefits. The benefits will be available to “every single person in the US.”
Due to “common sense” payment reforms, Warren states that Medicare for All is “possible without spending any more money overall than we spend now.” Taxes on the financial sector, large corporations, and the top 1% of Americans would make the overhaul of the US healthcare system possible.
Under Warren’s plan, free federal coverage would replace the health insurance that more than half of Americans receive through their employers. Warren’s plan also intends to cut administrative costs, reign in the costs for medical treatments and prescription drugs, as well as restore competition between healthcare providers.
What is Warren’s financial strategy?
Warren bases her recommendations on an analysis from the Urban Institute, which found that, under the current system, Americans will spend $52 trillion on healthcare in the next decade.
The Urban Institute also estimates that under a single-payer healthcare plan like Medicare for All, Americans would pay $59 trillion during the same period. The new system would need $34 trillion in new federal spending.
The figures calculated in Warren’s plan are lower than those in the Urban Institute analysis. Warren estimates that the total cost could be confined to $52 trillion and that $20.5 trillion in new federal spending would be necessary.
Senator Warren proposed a variety of ways to pay for Medicare for All.
Warren affirmed that middle-class taxes wouldn’t rise “one penny.” Bernie Sanders, a rival for the Democratic nomination for president in 2020 and the architect of Medical for All, has not made the same commitment. Sanders has said his plan for Medicare would bring an increase in middle-class taxes.
Contributions from employers will be one of the main sources of funding for Medicare for All. Employers and companies send payments to insurance companies under the current system. Warren proposes that they send contributions to the federal government instead. Warren claims this would raise $8.8 trillion over ten years.
Instead of paying for Medicare For All by raising the taxes on the middle class, Warren would pay for the healthcare reforms with targeted spending cuts and new taxes on corporations and the wealthiest 1% of Americans.
The wealthiest 1% of people would have new taxes imposed upon them. Those with assets and savings over $1 billion face a 6% tax, rather than the previous proposal of 3%. The Warren campaign calculates the revenue from the increased taxation of the wealthiest individuals and corporations could provide an estimated $6 trillion.
By empowering the Internal Revenue Service (IRS), Warren argues that she can collect $2.3 trillion following an IRS crackdown on tax evasion and fraud. Also included in the plan is comprehensive immigration reform. According to Warren, these reforms would lead to $400 billion in new taxable income over ten years.
By disbanding the Overseas Contingency Operations Fund, Warren says the government can save $800 million. Warren’s campaign believes the changes will raise $20.5 trillion over ten years. The new revenue would go towards financing the rest of Warren’s estimated Medicare costs.
Reaction to Warren’s plan
The release of the detailed plan allows Warren’s campaign to say that they have not been vague about her healthcare proposals. But the plan has raised questions about whether it is realistic.
“This debate has moved so far and so fast within the Democratic Party, it makes your head spin,” said Larry Levitt, the executive vice president on health policy at the Kaiser Family Foundation. “Ideas that used to be political third rails are now being proposed by one of the leading candidates for president.”
There was little support for Warren’s plan amongst her Democratic rivals for the presidential nomination. Joe Biden’s (Former U.S vice president and candidate for the Democratic presidential nomination,) campaign said the proposal amounted to “mathematical gymnastics.” When asked about the estimated costs for the plan during an appearance on PBS NewsHour, Biden responded, “she’s making it up. Nobody thinks it’s $20 trillion. It’s between $30 and $40 trillion.”
Pete Buttigieg told Fox News that all the candidates “have a responsibility to explain how our plans are going to be paid for."
“My concern about the plan she’s putting forward is not just the multi-trillion-dollar hole, but also the fact that most Americans would prefer not to be told that they have to abandon their private plan," he added.
Responding to her critics and delivering a riposte to her less than supportive Democratic colleagues, Warren wrote on Medium “And make no mistake – any candidate who opposes my long-term goal of Medicare for All and refuses to answer these questions directly should concede that they have no real strategy for helping the American people address the crushing costs of healthcare in this country. We need plans, not slogans.”
Healthcare and the 2020 election
Observers expect healthcare to be among the primary issues of the 2020 election. It is the second most important issue for Democratic voters. Only a candidate’s ability to beat President Trump supersedes healthcare as a political issue.
Voters listed healthcare as the main concern during the midterm elections of 2018, in which the Democrats gained the House of Representatives. Alexandria Ocasio Cortez- U.S. Representative for New York’s 14th congressional district, credited her unexpected victory over 10-term incumbent Joe Crowley in part to her support of Medicare for All. Crowley served as U.S. Representative from New York’s 14th congressional district from 1999 to 2019.
But Warren’s support of Medicare for All has some Democrats worried about the electability of a candidate who advocates for the policy. Despite the concerns, a CBS poll found that 70% of respondents favored a national healthcare plan like Medicare for All.
Warren’s plan is a clear sign that Medicare for All will be a cornerstone of her campaign. The plan includes not only healthcare reform, but it also encompasses changes to the tax system and defense spending.
Other candidates have been less forthcoming in embracing a single-payer healthcare system. Joe Biden prefers to expand and protect Obamacare. Pete Buttigieg- Mayor of South Bend, Indiana and candidate for the Democratic nomination in the 2020 US presidential election, who has joined the list of frontrunners in the Democratic race for president, unveiled a ‘Medicare for All Who Want It’ healthcare plan. Buttigieg’s plan would keep employer-sponsored insurance and private individual plans while creating a government plan that any American could join.