Elizabeth Warren releases her plan to finance Medicare for All

Elizabeth Warren releases her plan to finance Medicare for All

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Sen. Elizabeth Warren, D-Mass., released a detailed plan Friday that she says would fully fund a “Medicare for All” bill and cover every American without premiums or deductibles, all with “not one penny in middle-class tax increases.”

Warren’s campaign estimates her plan would keep combined public and private health spending “just under” $52 trillion over the next 10 years, in line with projections under existing law, but would require the federal government to absorb $20.5 trillion in new spending. It seeks to use efficiency savings generated by Medicare for All to cover the uninsured at a similar total cost and add new benefits for dental, vision and long-term care.

“Medicare for All is about the same price as our current path — and cheaper over time,” Warren said in a Medium post. “That means the debate isn’t really about whether the United States should pay more or less. It’s about who should pay.”

Warren places most of the revenue burden on businesses and the wealthy. She plans to carry over almost all existing health funding from employers and state governments while also levying a variety of new taxes on the rich, corporations and high-earning investors — including doubling her signature wealth tax on billionaires.

Warren backs up her revenue and cost estimates with 44 pages of analysis from experts, including former International Monetary Fund chief economist Simon Johnson, former Obama economic adviser Betsey Stevenson, Moody’s chief economist Mark Zandi, and former Obama-appointed Medicare and Medicaid administrator Dr. Donald Berwick.

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At the same time, there’s likely to be significant skepticism from outside experts about whether Warren could achieve the tens of trillions of dollars in revenue and savings targets that the plan calls for and whether its provisions would create unintended consequences for health care and the broader economy.

Politically, though, the hotly anticipated white paper should serve to quell critics and fellow 2020 opponents — at least temporarily — as it answers directly, and in detail, the latest prominent line of attack against her.

With her own answer now firmly in hand, Warren challenged those Democratic candidates who oppose Medicare For All to “put forward their own plan to cover everyone, without costing the country anything more in health care spending,” adding a final counter: “We need plans, not slogans.”

While Warren’s plan promises “not one penny in middle-class tax increases,” it does assume a reversal of President Donald Trump’s tax cut — a move Warren previously had backed that would raise taxes on some middle income families. Other sources of revenue include raising her wealth tax to 6 percent on fortunes over $1 billion, treating capital gains for the top 1 percent as earned income and requiring taxes to be paid annually, imposing $2.9 trillion in new taxes on corporations and foreign earnings and creating a new 0.1 percent tax on financial transactions.

Her plan also predicts $2.3 trillion in additional revenue from stepping up enforcement of existing tax laws, $400 billion from overhauling the immigration system, and about $800 billion in savings from ending the Overseas Contingency Operations fund, an emergency pool of defense spending that Warren argues should go through the regular budget process.

In writing her plan, Warren largely did not challenge outside cost estimates of Medicare for All by independent groups. But she argued she would generate more savings with additional policy moves that go beyond what those groups analyzed, some of which fill in more details on the Medicare for All bill authored by Sen. Bernie Sanders, I-Vt.

Warren’s proposal uses as a baseline a recent estimate by the Urban Institute that a similar Medicare for All plan that eliminates premiums and deductibles and adds coverage for vision, dental, and long-term care would add $34 trillion to the federal budget over 10 years.

But Warren’s campaign argues she would bring the cost down by an additional $14 trillion by redirecting existing public spending on health care, cutting overhead and negotiating lower prices for care.

Her plan suggests it would save money by reducing payments to physicians to Medicare rates, which tend to be significantly lower than private insurance, and to 110 percent of Medicare rates for hospitals, and instituting a variety of payment changes to encourage health providers to generate more savings.

The plan sets an ambitious goal of cutting Medicare drug prices by 70 percent for brand-name drugs and 30 percent for generics through a series of reforms. It would also require the new Medicare system to run with much less administrative overhead than the Urban Institute predicted would be necessary — 2.3 percent of total costs instead of 6 percent.

Perhaps more telling than the plan itself is the larger message Warren has tried to craft on the campaign trail in recent days, painting the health care issue as one that will provide a clear distinction in the general election. Campaigning in Durham, New Hampshire, on Wednesday, the Massachusetts senator cast 2020 as a fight “between the people who think health care should be reserved for those who are rich and the rest of us who think health care should be there for every American.”

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