Elizabeth Warren Releases $20.5 Trillion Plan to Pay for ‘Medicare for All’
By Thomas Kaplan, Abby Goodnough and
WASHINGTON — Senator Elizabeth Warren
on Friday proposed $20.5 trillion in new spending through huge tax
increases on businesses and wealthy Americans to pay for “Medicare for
all,” laying out details for a landmark government expansion that will
pose political risks for her presidential candidacy while also allowing
her to say she is not raising taxes on the middle class to pay for her
health care plan.
Ms. Warren, who has risen steadily in the polls with strong support from liberals excited about her ambitious policy plans, has been under pressure from top rivals like former Vice President Joseph R. Biden Jr. to release details about paying for her biggest plan, “Medicare for all.” Her new proposal marks a turning point for her campaign, in which she will have to sell voters on a tax-and-spending plan that rivals the ambitions of the New Deal and the Great Society while also defending it against both Democratic and Republican criticism.
Under Ms. Warren’s plan, employer-sponsored health insurance — which more than half of Americans now receive — would be eliminated and replaced by free government health coverage for all Americans, a fundamental shift from a market-driven system that has defined health care in the United States for decades but produced vast inequities in quality, service and cost.
Ms. Warren, who has risen steadily in the polls with strong support from liberals excited about her ambitious policy plans, has been under pressure from top rivals like former Vice President Joseph R. Biden Jr. to release details about paying for her biggest plan, “Medicare for all.” Her new proposal marks a turning point for her campaign, in which she will have to sell voters on a tax-and-spending plan that rivals the ambitions of the New Deal and the Great Society while also defending it against both Democratic and Republican criticism.
Under Ms. Warren’s plan, employer-sponsored health insurance — which more than half of Americans now receive — would be eliminated and replaced by free government health coverage for all Americans, a fundamental shift from a market-driven system that has defined health care in the United States for decades but produced vast inequities in quality, service and cost.
Ms.
Warren would use a mix of sources to pay for the $20.5 trillion in new
spending over a decade, including by requiring employers to pay
trillions of dollars to the government, replacing much of what they
currently spend to provide health coverage to workers. She would create a
tax on financial transactions like stock trades, change how investment
gains are taxed for the top 1 percent of households and ramp up her
signature wealth tax proposal to be steeper on billionaires. She also
wants to cut $800 billion in military spending.
Ms.
Warren’s estimate for the cost of Medicare for all relies on an
aggressive set of assumptions about how to lower national health care
costs while providing comprehensive coverage to all Americans. Like
Senator Bernie Sanders of Vermont, she would essentially eliminate
medical costs for individuals, including premiums, deductibles and other
out-of-pocket expenses.
Critically, her new plan would not raise taxes on middle-class Americans, a question she has been asked over and over but has not answered directly until now. When confronted on the campaign trail and debate stage, she emphasized instead that her plan would result in higher overall costs for wealthy people and big corporations but lower costs for middle-class families.
Her lack of specificity became a vulnerability as the primary race heated up, especially because she had established herself as the candidate who had a plan for everything. Democratic rivals like Mr. Biden and Pete Buttigieg, who prefer building on the existing system of health coverage, have pointedly criticized her on the issue, with Mr. Buttigieg calling her “extremely evasive.” Two weeks ago, with no sign that the pressure would relent, she announced she would soon release her own financing plan.
“A key step in winning the public debate over Medicare for all will be explaining what this plan costs — and how to pay for it,” Ms. Warren wrote in her plan. To do that, she added, “We don’t need to raise taxes on the middle class by one penny.”
Critically, her new plan would not raise taxes on middle-class Americans, a question she has been asked over and over but has not answered directly until now. When confronted on the campaign trail and debate stage, she emphasized instead that her plan would result in higher overall costs for wealthy people and big corporations but lower costs for middle-class families.
Her lack of specificity became a vulnerability as the primary race heated up, especially because she had established herself as the candidate who had a plan for everything. Democratic rivals like Mr. Biden and Pete Buttigieg, who prefer building on the existing system of health coverage, have pointedly criticized her on the issue, with Mr. Buttigieg calling her “extremely evasive.” Two weeks ago, with no sign that the pressure would relent, she announced she would soon release her own financing plan.
“A key step in winning the public debate over Medicare for all will be explaining what this plan costs — and how to pay for it,” Ms. Warren wrote in her plan. To do that, she added, “We don’t need to raise taxes on the middle class by one penny.”
The
issue of health care helped Democrats win control of the House in last
year’s midterm elections, after unsuccessful attempts by President Trump
and Republicans in Congress to repeal the Affordable Care Act. It has
been a central issue again this year as Ms. Warren and other Democrats
have competed for their party’s presidential nomination, highlighting a
divide on policy between the party’s moderates and its liberal wing that
favors transformative change.
But in responding to her rivals and more tightly embracing Medicare for all, Ms. Warren is taking a significant political risk. Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total.
Still, the idea of government-run health insurance excites many liberal voters seeking a more equitable health care system. Mr. Sanders, one of Ms. Warren’s top rivals in the Democratic primary race, has long championed single-payer health care, and Ms. Warren has aligned herself with him on the issue. She co-sponsored his Medicare for all legislation in the Senate, and speaking on health care at the first Democratic presidential debate in June, she declared, “I’m with Bernie.”
Ms. Warren’s proposal shows just how large a reorganization of spending Medicare for all represents. By eliminating private health insurance and bringing every American into a federal system, trillions of dollars of spending by households, employers and state governments would be transferred into the federal budget over the course of a decade.
Her financing plan is based on cost estimates that are on the low side, relative to those from other serious economists who have assessed the program. Her estimate of $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, but with several different assumptions that lower the cost from Urban’s estimate of $34 trillion over the same period.
But in responding to her rivals and more tightly embracing Medicare for all, Ms. Warren is taking a significant political risk. Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total.
Still, the idea of government-run health insurance excites many liberal voters seeking a more equitable health care system. Mr. Sanders, one of Ms. Warren’s top rivals in the Democratic primary race, has long championed single-payer health care, and Ms. Warren has aligned herself with him on the issue. She co-sponsored his Medicare for all legislation in the Senate, and speaking on health care at the first Democratic presidential debate in June, she declared, “I’m with Bernie.”
Ms. Warren’s proposal shows just how large a reorganization of spending Medicare for all represents. By eliminating private health insurance and bringing every American into a federal system, trillions of dollars of spending by households, employers and state governments would be transferred into the federal budget over the course of a decade.
Her financing plan is based on cost estimates that are on the low side, relative to those from other serious economists who have assessed the program. Her estimate of $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, but with several different assumptions that lower the cost from Urban’s estimate of $34 trillion over the same period.
Ms. Warren attempts to minimize
fiscal disruption by asking the big payers in the current system to keep
paying for health care through new taxes. She would create a new
“employer Medicare contribution” that would effectively redirect what
employers are already paying to health insurers, totaling $8.8 trillion
over a decade. Small businesses would be exempt if they are not
currently paying for their employees’ health care.
Ms. Warren has also proposed that states pay the federal government much of what they currently spend to cover state workers and low-income residents under the Medicaid program.
But she also describes new revenue streams to replace the other big chunk of health spending: the money spent by households on premiums, deductibles and direct payments for services like dental care that are not always covered by insurance.
Ms. Warren would raise $3 trillion in total from two proposals to tax the richest Americans. She has previously said that her wealth tax proposal, another signature of her campaign, would impose a 3 percent annual tax on net worth over $1 billion; she would now raise that to 6 percent. She would also change how investment gains are taxed for the top 1 percent of households.
In addition to imposing a tax on financial transactions, she would also make changes to corporate taxation. She is counting on stronger tax enforcement to bring in $2.3 trillion in taxes that would otherwise go uncollected. And she is banking on passing an overhaul of immigration laws — which itself would be a huge political feat — and gaining revenue from taxes paid by newly legal residents.
Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. She expects that an aggressive negotiation system could lower spending on generic medications by 30 percent compared with what Medicare pays now, for example, and spending on prescription drugs could fall by 70 percent. Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care.
When Mr. Sanders introduced the latest version of his Medicare for all legislation in April, he released a list of options that could help pay for it, including a 4 percent “income-based premium” for employees and a 7.5 percent “income-based premium” for employers, and an increase to the top marginal income tax rate to as high as 70 percent for people making above $10 million. Mr. Sanders has acknowledged that taxes would go up on middle-class families.
Ms. Warren has also proposed that states pay the federal government much of what they currently spend to cover state workers and low-income residents under the Medicaid program.
But she also describes new revenue streams to replace the other big chunk of health spending: the money spent by households on premiums, deductibles and direct payments for services like dental care that are not always covered by insurance.
Ms. Warren would raise $3 trillion in total from two proposals to tax the richest Americans. She has previously said that her wealth tax proposal, another signature of her campaign, would impose a 3 percent annual tax on net worth over $1 billion; she would now raise that to 6 percent. She would also change how investment gains are taxed for the top 1 percent of households.
In addition to imposing a tax on financial transactions, she would also make changes to corporate taxation. She is counting on stronger tax enforcement to bring in $2.3 trillion in taxes that would otherwise go uncollected. And she is banking on passing an overhaul of immigration laws — which itself would be a huge political feat — and gaining revenue from taxes paid by newly legal residents.
Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. She expects that an aggressive negotiation system could lower spending on generic medications by 30 percent compared with what Medicare pays now, for example, and spending on prescription drugs could fall by 70 percent. Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care.
When Mr. Sanders introduced the latest version of his Medicare for all legislation in April, he released a list of options that could help pay for it, including a 4 percent “income-based premium” for employees and a 7.5 percent “income-based premium” for employers, and an increase to the top marginal income tax rate to as high as 70 percent for people making above $10 million. Mr. Sanders has acknowledged that taxes would go up on middle-class families.
Still, he has not produced a definitive plan for how to pay for Medicare for all, and in a recent interview with CNBC,
he declined to do so. “You’re asking me to come up with an exact
detailed plan of how every American — how much you’re going to pay more
in taxes, how much I’m going to pay,” he said. “I don’t think I have to
do that right now.”
https://www.nytimes.com/2019/11/01/us/politics/elizabeth-warren-medicare-for-all.html
https://www.nytimes.com/2019/11/01/us/politics/elizabeth-warren-medicare-for-all.html
Elizabeth Warren releases Medicare for All plan, promising no middle class tax increase
by Shirley Leung - The Boston Globe - November 1, 2019
The
issue meant sustained tough headlines for Warren, who had ridden a
steady summer rise in the polls to catch former Vice President Joe Biden
atop the crowded 2020 primary field.
Her plan is built on transferring to the government 98% of the $8.8 trillion she estimates that employers will spend on private insurance for their employees.
‘‘We can generate almost half of what we need to cover Medicare for All just by asking employers to pay slightly less than what they are projected to pay today, and through existing taxes,’’ Warren wrote in a 20-page online post detailing her program.
Companies with fewer than 50 employees would be exempted and — in a nod to unions whose support will be key in the Democratic primary — Warren said that employers already offering health benefits reached under collective bargaining agreements will be allowed to reduce how much they send to federal coffers — provided that they pass those savings on to employees.
If the program fails to raise $8.8 trillion, Warren says she'd make up the difference by imposing a supplemental contribution requirement for big companies ‘‘with extremely high executive compensation and stock buyback rates.’’
Medicare for All’s chief proponent is Warren’s friend and White House hopeful rival Sen. Bernie Sanders of Vermont, who was asked on CNBC this week if he'd provide full details on how he'd pay for his universal health insurance plan and replied, ‘‘I don’t think I have to do that right now.’’
Still, Sanders had previously released payment options, including a 4% tax ‘‘premium’’ on income that kicks in after the first $29,000 for a family of four — very much affecting the middle class.
Warren instead insisted that overall health care costs would increase for big corporations and the wealthy while falling for most everyone else. Friday’s proposal attempts to explain why middle class taxes don’t have to increase — even if the figures involved are staggering.
She says that Medicare for All’s wiping out of private health insurance’s premiums, deductibles and co-pays will effectively result in an $11 trillion pay raise for Americans, which will generate $1.4 trillion in new taxes.
‘‘When fully implemented, my approach to Medicare for All would mark one of the greatest federal expansions of middle class wealth in our history,’’ Warren wrote.
She plans to generate another $2.3 trillion by increasing funding to the Internal Revenue Service to better enforce existing tax laws. Another $3 trillion would come from tax increases on capital gains and on the wealthiest 1% of Americans — a segment of the population that would already be affected by Warren’s separate wealth tax of 2% on fortunes worth more than $50 million. On Friday, she proposed an additional 6% tax on fortunes worth more than $1 billion.
Warren also plans to impose new investment taxes — including on the sale of stocks and bonds, and on large banks, as well as increase levies for large corporations — to generate $3.8 billion in new federal revenue.
Her plan also calls for providing a ‘‘pathway to citizenship’’ for people in the country illegally, and increasing legal U.S. immigration, which she says will result in $400 billion in new tax revenue. Finally, she plans to generate $798 billion over 10 years by eliminating what she called a Pentagon ‘‘slush fund’’ for defense spending.
All told, that would provide $20.5 trillion — or more than four times the current fiscal year’s federal budget. Still, the price tag could be far higher.
Other estimates have put the decade-long price tag for universal health care at $34 trillion, but Warren promised to slash $13.5 billion from that over 10 years through sweeping cost-saving efforts, including imposing new pricing and payment rules and reducing administrative and prescription drug costs.
She said Medicare for All would give the government real negotiating power to lower costs while also becoming a boon to rural hospitals since sparsely populated areas often currently have higher concentrations of uninsured people and would no longer be forced to provide unreimbursed care in places like emergency rooms.
‘‘Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone,’’ Warren wrote. ‘‘Or, if they are unwilling to do that, they should concede that they think it’s more important to protect the eye-popping profits of private insurers and drug companies and the immense fortunes of the top 1% and giant corporations, rather than provide transformative financial relief for hundreds of millions of American families.’’
https://www.bostonglobe.com/news/politics/2019/11/01/elizabeth-warren-released-detailed-plan-raise-trillon-pay-for-medicare-for-all-promising-middle-class-taxes-won-increase-one-penny/yWXQ1gsnfxwZ7T2UAqzr6I/story.html
How Americans Split on Health Care: It’s a 3-Way Tie
Her plan is built on transferring to the government 98% of the $8.8 trillion she estimates that employers will spend on private insurance for their employees.
‘‘We can generate almost half of what we need to cover Medicare for All just by asking employers to pay slightly less than what they are projected to pay today, and through existing taxes,’’ Warren wrote in a 20-page online post detailing her program.
Companies with fewer than 50 employees would be exempted and — in a nod to unions whose support will be key in the Democratic primary — Warren said that employers already offering health benefits reached under collective bargaining agreements will be allowed to reduce how much they send to federal coffers — provided that they pass those savings on to employees.
If the program fails to raise $8.8 trillion, Warren says she'd make up the difference by imposing a supplemental contribution requirement for big companies ‘‘with extremely high executive compensation and stock buyback rates.’’
Medicare for All’s chief proponent is Warren’s friend and White House hopeful rival Sen. Bernie Sanders of Vermont, who was asked on CNBC this week if he'd provide full details on how he'd pay for his universal health insurance plan and replied, ‘‘I don’t think I have to do that right now.’’
Still, Sanders had previously released payment options, including a 4% tax ‘‘premium’’ on income that kicks in after the first $29,000 for a family of four — very much affecting the middle class.
Warren instead insisted that overall health care costs would increase for big corporations and the wealthy while falling for most everyone else. Friday’s proposal attempts to explain why middle class taxes don’t have to increase — even if the figures involved are staggering.
She says that Medicare for All’s wiping out of private health insurance’s premiums, deductibles and co-pays will effectively result in an $11 trillion pay raise for Americans, which will generate $1.4 trillion in new taxes.
‘‘When fully implemented, my approach to Medicare for All would mark one of the greatest federal expansions of middle class wealth in our history,’’ Warren wrote.
She plans to generate another $2.3 trillion by increasing funding to the Internal Revenue Service to better enforce existing tax laws. Another $3 trillion would come from tax increases on capital gains and on the wealthiest 1% of Americans — a segment of the population that would already be affected by Warren’s separate wealth tax of 2% on fortunes worth more than $50 million. On Friday, she proposed an additional 6% tax on fortunes worth more than $1 billion.
Warren also plans to impose new investment taxes — including on the sale of stocks and bonds, and on large banks, as well as increase levies for large corporations — to generate $3.8 billion in new federal revenue.
Her plan also calls for providing a ‘‘pathway to citizenship’’ for people in the country illegally, and increasing legal U.S. immigration, which she says will result in $400 billion in new tax revenue. Finally, she plans to generate $798 billion over 10 years by eliminating what she called a Pentagon ‘‘slush fund’’ for defense spending.
All told, that would provide $20.5 trillion — or more than four times the current fiscal year’s federal budget. Still, the price tag could be far higher.
Other estimates have put the decade-long price tag for universal health care at $34 trillion, but Warren promised to slash $13.5 billion from that over 10 years through sweeping cost-saving efforts, including imposing new pricing and payment rules and reducing administrative and prescription drug costs.
She said Medicare for All would give the government real negotiating power to lower costs while also becoming a boon to rural hospitals since sparsely populated areas often currently have higher concentrations of uninsured people and would no longer be forced to provide unreimbursed care in places like emergency rooms.
‘‘Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone,’’ Warren wrote. ‘‘Or, if they are unwilling to do that, they should concede that they think it’s more important to protect the eye-popping profits of private insurers and drug companies and the immense fortunes of the top 1% and giant corporations, rather than provide transformative financial relief for hundreds of millions of American families.’’
https://www.bostonglobe.com/news/politics/2019/11/01/elizabeth-warren-released-detailed-plan-raise-trillon-pay-for-medicare-for-all-promising-middle-class-taxes-won-increase-one-penny/yWXQ1gsnfxwZ7T2UAqzr6I/story.html
Warren’s Medicare for All Plan Includes No New Taxes on the Middle Class
The deeply detailed proposal cuts
health care costs and finds other revenues, saving ordinary Americans
$11 trillion in premiums and deductibles.
by David Dayen - The American Prospect - November 1, 2019
Presidential hopeful Elizabeth Warren today released a
much-anticipated plan to finance Medicare for All, which she says would
require no new taxes on middle-class families. New revenues to fund the
single-payer system come mostly from an employer head tax; additional
taxes on large corporations, banks, investors, and the wealthy; and
military budget cuts. Significant savings to the cost of providing
health care, roughly $7 trillion over ten years, also help to reduce the
price tag.
The financing does not include Warren’s signature wealth tax, though she does add a 3 percent surtax on wealth over $1 billion.
In shifting this financing mix, $11 trillion currently paid by individuals in insurance premiums and deductibles would go back into Americans’ pockets. Individuals would still pay the current taxes on Medicare, and whatever taxes fund the state share of health programs, but nothing more. Premium payments and co-pays would be wiped away.
The result is “substantially larger than the largest tax cut in American history,” Warren writes in a Medium post on the proposal, framing it as something that significantly lowers overall costs to everyday families. “We can meet these commitments without a tax increase on the middle class—and, in fact, without any increase in income taxes at all.”
The detailed plan will test the limits of voter endurance: The Medium post clocks in at over 9,300 words. But the concept is quite simple: Figure out what it costs to pay for health care for the entire country, figure out how much you can reduce that spending, add in health funding that the government already pays for, and then make up the difference.
The whole thing is kind of a ridiculous political exercise, a burden placed upon single-payer advocates that other health care reform plans never have to shoulder. Warren perhaps hopes that she can drill down to such detail to take the issue off the table politically, and challenge other campaigns to step up with similar substance.
But in doing so, Warren’s team incorporates a number of other policy preferences outside of health care, including comprehensive immigration reform, banking regulation, initiatives to fight inequality, antitrust enforcement, boosts to unionization, tax compliance, anti-corruption measures, military spending, and more. It really reflects an entire agenda and value set that values working families over the oligarchs currently running roughshod over America.
While there would be enormous challenges to advancing such a complete economic and social transformation, the plan does a meticulous job of answering the nagging “how will you pay for that” question, while attempting to shift the debate by foregrounding the significant benefits of universal coverage, and the personal freedoms it would usher in.
“It gives her a chance to put her stamp on it,” Representative Pramila Jayapal (D-WA), author of the Medicare for All bill in the House, told me earlier this week, before the Warren plan came out. And if nothing else, this plan does that.
Here’s how it breaks down.
The campaign leaned heavily on Don Berwick, President Obama’s head of the Centers for Medicare and Medicaid Services, the governing body for those federal programs. Berwick has been a single-payer advocate for years since exiting the Obama administration, most recently in a USA Today op-ed. He is as knowledgeable as anyone on how the health care system works, and therefore perfect for analyzing how to realize savings.
If anything, the steps on costs are conservative, considering the U.S. pays nearly twice as much as most industrialized countries on national health expenditures.
The plan envisions dropping administrative spending—the cost of billing and accounting and haggling with different providers—from 12 percent of premiums collected, as with private insurance, to 2.3 percent, which is Medicare’s approximate expense. That alone knocks $1.8 trillion off the total cost.
Then, Warren’s team goes after high provider prices, easily the biggest driver of health cost inflation. The plan calls for reimbursing physicians and outpatient providers at current Medicare rates, while reimbursing hospitals at 110 percent of Medicare rates. There would be adjustments to that mix, like more reimbursement for primary and preventive care (which could generate its own cost savings), and less for specialty care. Rural and teaching hospitals would get higher reimbursements. And all providers would benefit from simpler administrative processes, lower drug prices, more patients with insurance, and the lifting of uncompensated care.
In addition, Warren proposes ending large geographic cost variances (where hospitals charge wildly different rates for the same treatment), slashing overpayments for rehabilitation and palliative care, and expanding bundled payments that cut down on fee-for-service medicine. All the provider-related savings trim another $2.9 trillion.
On prescription drugs, Warren explicitly promises to reduce brand-name drug prices by 70 percent, and generic prices by 30 percent. She gets there by negotiating all purchases of pharmaceuticals (unlike the 25 high-cost drugs envisioned in House Democrats’ H.R. 3) and setting a ceiling of 110 percent of an international index as the highest possible price. If negotiations fail, the plan calls for seizing pharmaceutical patents and licensing them to competitors, or manufacturing them directly, as Warren called for in a bill released late last year. That saves $1.7 trillion, all told, and considering the limited negotiation in H.R. 3 brings an estimated $345 billion in savings, that’s a reasonable number.
All told, Warren seeks to slow growth of health care costs over time in line with future expected GDP growth (roughly 3.9 percent). And if the aforementioned options don’t get there, Warren suggests using automatic reimbursement reductions or global budgeting, where hospitals get a set amount of money annually as payment. Hitting the growth target, according to the estimates Warren’s team provided, would save another $1.1 trillion.
One policy Warren identifies but sets no cost savings for is antitrust enforcement of the health sector. Virtually every part of the health system is incredibly concentrated; research from Cal-Berkeley’s Brent Fulton shows that 90 percent of all metropolitan areas have highly concentrated hospital markets, buoyed by 1,667 hospital mergers in the past 20 years. The concentration goes across the chain, from outpatient clinics to group purchasing organizations that raise the cost of medical supplies to pharmacy benefit managers that increase drug costs, and on and on.
Warren has vowed to block all health sector mergers unless they prove that they will maintain or improve care, and rein in anti-competitive behavior sector-wide. But the bean-counters put no savings toward this, despite documented evidence that market power explains much of the rise in health care prices. In fact, a lot of the potential cost savings aren’t really accounted for in the Warren plan, like the benefits of widespread preventive care in eliminating the need for more expensive treatments down the road.
That’s part of why this whole exercise is somewhat foolish, governed by a Congressional Budget Office whose assumptions are often mercurial and frequently mistaken. Nevertheless, adding up all the savings knocks around $7 trillion off the Urban Institute’s $59 trillion, ten-year figure for total health expenditures. In essence, this means that you can cover 24 million more Americans, and ensure that another 63 million aren’t underinsured, with the expansion paying for itself through bringing U.S. health care more in line with international norms.
Then there’s another $6 trillion that reflects the state and local government share of spending for health programs like Medicaid, the Children’s Health Insurance Program (CHIP), and coverage for government employees. By using a “maintenance of effort” function that keeps those states paying the same amount for Medicare for All, that lowers the new revenues needed even further. Because overall health spending growth will reduce over time, states will end up spending less through this maintenance of effort provision than they would under current law.
After doing the math, Warren’s team projects that new government revenues necessary to finance Medicare for All would come to $20.5 trillion.
Part-time employees would count toward that per capita total, along with those workers seen as independent contractors today, who would fall under Warren’s expanded definition of an employee. Small businesses under 50 employees would be exempt from the head tax unless they’re providing employee health care today. Pass-through businesses like law firms and private equity firms would have to pay the head tax.
In an ingenious twist, employers operating under a collective-bargaining agreement would have their head tax reduced, if they pass any savings under that to workers in wages or benefits. In other words, the plan would incentivize collective bargaining, not just for workers, but for employers as well.
In all, this estimates revenues of $8.8 trillion, over 40 percent of the way to the total. If it doesn’t get there, Warren would trigger a supplemental tax on companies with high executive salaries and large amounts of stock buybacks. Repeatedly in this plan, she discourages behavior she wants to get rid of, and vice versa.
The next bucket of money may be a little tricky. Because workers will not contribute to health insurance through their paycheck, Warren’s team presumes they will take home that pay. That additional $3.7 trillion in workers’ pockets would constitute newly taxable income, and therefore another $1.15 trillion in tax revenue.
This assumes that employers won’t assess a “fair share fee” to have workers pay for health care, which you could envision happening. A senior Warren aide doubted this would take place, because employers make out better under the plan than what they contribute today. But that’s not true for large corporations and multinationals, as we’ll see. The question of whether workers will realize higher take-home pay after Medicare for All is a critical one, and not a complete slam dunk in my view.
It is true that workers won’t have to bother with health savings accounts to shelter money for medical costs, or tax deductions for medical expenses. That saves another $250 billion.
The plan gets another $2.3 trillion by collecting what is already owed to the government. Warren goes about reducing the gap between the taxes people are supposed to pay and what they actually do by adding significant enforcement funding, expanding tax compliance measures, and redirecting audits to high-income earners.
Then there are targeted taxes on the financial sector: a 0.1 percent financial transaction tax on stocks, bonds, and derivatives, and a “systemic risk” fee on banks with more than $50 billion in assets. Ironically, the latter fee was part of Dodd-Frank until Scott Brown, whom Warren replaced in the Senate, forced the fee out as a condition for his vote. These two taxes reap another $900 billion.
Warren would close the expensing loophole, which allows businesses to realize the full cost of equipment investments up front. She would increase the minimum tax on multinationals that park earnings abroad to 35 percent, while prohibiting deferring those tax payments. She would put a tax on the domestic sales of foreign firms as well. That adds $2.9 trillion.
There’s an expansion of the “two cent” wealth tax through a surcharge of an additional three cents on wealth over $1 billion. Warren would also include a “mark-to-market” system of annually collecting capital gains taxes based on gains from that year, rather than only collecting capital gains on a sale. Senator Ron Wyden (D-OR) has proposed this change. A total of $3 trillion comes from these two changes.
Another $800 billion comes from eliminating an egregious slush fund for military spending called Overseas Contingency Operations, or OCO. This was supposed to be a short-term fund to finance war fighting, but has become a way to increase military budgets magically without counting the spending.
Finally, Warren applies the increased revenues from comprehensive immigration reform, around $400 billion according to an earlier estimate of an immigration bill from 2013. That revenue comes from taking the undocumented out of the shadows and giving them a path to citizenship, whereupon they pay federal taxes. To actually use such a pay-for, you would have to put the immigration bill into the Medicare for All bill; either one of them alone would be a heavy lift to pass, let alone both together.
All told, this $11 trillion in new revenue would still put America in the middle of the pack among developed nations in terms of taxation.
More than anything, this comprehensive assessment allows Warren to pivot. Other candidates can quibble with her numbers, but she starts from the base of giving Americans back $11 trillion in individual premium and deductible payments. She can now assert the principles she leads her Medium post with, that nobody should go bankrupt in America from high-cost health care, that nobody should endure the hassle of determining in-network doctors and what treatments insurers will cover, that nobody should die from lack of access. She can lead on values instead of costs and financing.
“Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone, without costing the country anything more in health care spending, and while putting $11 trillion back in the pockets of the American people,” Warren writes, turning the tables on her opponents. “If they are unwilling to do that, they should concede that they think it’s more important to protect the eye-popping profits of private insurers and drug companies and the immense fortunes of the top 1% and giant corporations.”
I could see hardcore Sanders supporters cherry-picking the words “long-term goal” and claiming that Warren is not committed to getting Medicare for All done. But this plan is so wrapped up with her other concerns, and so in line with her populist message, that I think it will pass the test for most single-payer fans. And it allows her to go on offense against Joe Biden, Pete Buttigieg, and others, asking them why they don’t cover everyone, why they don’t cut costs, why they don’t want to end the horror of medical bankruptcies and unnecessary deaths.
“We need plans, not slogans,” Warren concludes.
https://prospect.org/health/warrens-medicare-for-all-plan-includes-no-new-taxes-on-the-middle-class/?emci=c64ab91c-cefc-e911-828b-2818784d6d68&emdi=547ef794-d6fc-e911-828b-2818784d6d68&ceid=1112297
The financing does not include Warren’s signature wealth tax, though she does add a 3 percent surtax on wealth over $1 billion.
In shifting this financing mix, $11 trillion currently paid by individuals in insurance premiums and deductibles would go back into Americans’ pockets. Individuals would still pay the current taxes on Medicare, and whatever taxes fund the state share of health programs, but nothing more. Premium payments and co-pays would be wiped away.
The result is “substantially larger than the largest tax cut in American history,” Warren writes in a Medium post on the proposal, framing it as something that significantly lowers overall costs to everyday families. “We can meet these commitments without a tax increase on the middle class—and, in fact, without any increase in income taxes at all.”
The detailed plan will test the limits of voter endurance: The Medium post clocks in at over 9,300 words. But the concept is quite simple: Figure out what it costs to pay for health care for the entire country, figure out how much you can reduce that spending, add in health funding that the government already pays for, and then make up the difference.
The whole thing is kind of a ridiculous political exercise, a burden placed upon single-payer advocates that other health care reform plans never have to shoulder. Warren perhaps hopes that she can drill down to such detail to take the issue off the table politically, and challenge other campaigns to step up with similar substance.
But in doing so, Warren’s team incorporates a number of other policy preferences outside of health care, including comprehensive immigration reform, banking regulation, initiatives to fight inequality, antitrust enforcement, boosts to unionization, tax compliance, anti-corruption measures, military spending, and more. It really reflects an entire agenda and value set that values working families over the oligarchs currently running roughshod over America.
While there would be enormous challenges to advancing such a complete economic and social transformation, the plan does a meticulous job of answering the nagging “how will you pay for that” question, while attempting to shift the debate by foregrounding the significant benefits of universal coverage, and the personal freedoms it would usher in.
“It gives her a chance to put her stamp on it,” Representative Pramila Jayapal (D-WA), author of the Medicare for All bill in the House, told me earlier this week, before the Warren plan came out. And if nothing else, this plan does that.
Here’s how it breaks down.
Driving Down Costs
Warren’s plan is modeled after the Medicare for All Act, introduced by fellow presidential candidate Bernie Sanders. But that plan doesn’t outline exactly how to handle reimbursement of doctors and hospitals, prices for prescription drugs, cuts to administrative costs, and handling of existing state funding of Medicaid. Warren’s team tries to fill in these gaps and explicitly identify the savings, relative to an estimated $59 trillion in national health spending under Medicare for All over ten years, contained in an analysis from the Urban Institute.The campaign leaned heavily on Don Berwick, President Obama’s head of the Centers for Medicare and Medicaid Services, the governing body for those federal programs. Berwick has been a single-payer advocate for years since exiting the Obama administration, most recently in a USA Today op-ed. He is as knowledgeable as anyone on how the health care system works, and therefore perfect for analyzing how to realize savings.
If anything, the steps on costs are conservative, considering the U.S. pays nearly twice as much as most industrialized countries on national health expenditures.
The plan envisions dropping administrative spending—the cost of billing and accounting and haggling with different providers—from 12 percent of premiums collected, as with private insurance, to 2.3 percent, which is Medicare’s approximate expense. That alone knocks $1.8 trillion off the total cost.
Then, Warren’s team goes after high provider prices, easily the biggest driver of health cost inflation. The plan calls for reimbursing physicians and outpatient providers at current Medicare rates, while reimbursing hospitals at 110 percent of Medicare rates. There would be adjustments to that mix, like more reimbursement for primary and preventive care (which could generate its own cost savings), and less for specialty care. Rural and teaching hospitals would get higher reimbursements. And all providers would benefit from simpler administrative processes, lower drug prices, more patients with insurance, and the lifting of uncompensated care.
In addition, Warren proposes ending large geographic cost variances (where hospitals charge wildly different rates for the same treatment), slashing overpayments for rehabilitation and palliative care, and expanding bundled payments that cut down on fee-for-service medicine. All the provider-related savings trim another $2.9 trillion.
On prescription drugs, Warren explicitly promises to reduce brand-name drug prices by 70 percent, and generic prices by 30 percent. She gets there by negotiating all purchases of pharmaceuticals (unlike the 25 high-cost drugs envisioned in House Democrats’ H.R. 3) and setting a ceiling of 110 percent of an international index as the highest possible price. If negotiations fail, the plan calls for seizing pharmaceutical patents and licensing them to competitors, or manufacturing them directly, as Warren called for in a bill released late last year. That saves $1.7 trillion, all told, and considering the limited negotiation in H.R. 3 brings an estimated $345 billion in savings, that’s a reasonable number.
All told, Warren seeks to slow growth of health care costs over time in line with future expected GDP growth (roughly 3.9 percent). And if the aforementioned options don’t get there, Warren suggests using automatic reimbursement reductions or global budgeting, where hospitals get a set amount of money annually as payment. Hitting the growth target, according to the estimates Warren’s team provided, would save another $1.1 trillion.
One policy Warren identifies but sets no cost savings for is antitrust enforcement of the health sector. Virtually every part of the health system is incredibly concentrated; research from Cal-Berkeley’s Brent Fulton shows that 90 percent of all metropolitan areas have highly concentrated hospital markets, buoyed by 1,667 hospital mergers in the past 20 years. The concentration goes across the chain, from outpatient clinics to group purchasing organizations that raise the cost of medical supplies to pharmacy benefit managers that increase drug costs, and on and on.
Warren has vowed to block all health sector mergers unless they prove that they will maintain or improve care, and rein in anti-competitive behavior sector-wide. But the bean-counters put no savings toward this, despite documented evidence that market power explains much of the rise in health care prices. In fact, a lot of the potential cost savings aren’t really accounted for in the Warren plan, like the benefits of widespread preventive care in eliminating the need for more expensive treatments down the road.
That’s part of why this whole exercise is somewhat foolish, governed by a Congressional Budget Office whose assumptions are often mercurial and frequently mistaken. Nevertheless, adding up all the savings knocks around $7 trillion off the Urban Institute’s $59 trillion, ten-year figure for total health expenditures. In essence, this means that you can cover 24 million more Americans, and ensure that another 63 million aren’t underinsured, with the expansion paying for itself through bringing U.S. health care more in line with international norms.
Using the Dollars Already in the System
From that $52 trillion figure, Warren’s team then fills in all the existing payments and taxes that the government already puts toward health care. Federal spending through Medicare taxes, as well as Medicare and Medicaid health spending financed by general taxes, comes to a little over $25 trillion over the ten-year period.Then there’s another $6 trillion that reflects the state and local government share of spending for health programs like Medicaid, the Children’s Health Insurance Program (CHIP), and coverage for government employees. By using a “maintenance of effort” function that keeps those states paying the same amount for Medicare for All, that lowers the new revenues needed even further. Because overall health spending growth will reduce over time, states will end up spending less through this maintenance of effort provision than they would under current law.
After doing the math, Warren’s team projects that new government revenues necessary to finance Medicare for All would come to $20.5 trillion.
Paying the Difference
Warren’s biggest mechanism to fill this gap amounts to an employer head tax. The plan estimates that all businesses with over 50 employees—who must provide health care to workers or pay a fee under the Affordable Care Act’s employer mandate—will pay around $9 trillion over the next ten years on coverage. Through a complicated formula, the plan creates an employer Medicare contribution that’s around 98 percent of the average cost per employee. This means that businesses would save $200 billion in health care costs over ten years.Part-time employees would count toward that per capita total, along with those workers seen as independent contractors today, who would fall under Warren’s expanded definition of an employee. Small businesses under 50 employees would be exempt from the head tax unless they’re providing employee health care today. Pass-through businesses like law firms and private equity firms would have to pay the head tax.
In an ingenious twist, employers operating under a collective-bargaining agreement would have their head tax reduced, if they pass any savings under that to workers in wages or benefits. In other words, the plan would incentivize collective bargaining, not just for workers, but for employers as well.
In all, this estimates revenues of $8.8 trillion, over 40 percent of the way to the total. If it doesn’t get there, Warren would trigger a supplemental tax on companies with high executive salaries and large amounts of stock buybacks. Repeatedly in this plan, she discourages behavior she wants to get rid of, and vice versa.
The next bucket of money may be a little tricky. Because workers will not contribute to health insurance through their paycheck, Warren’s team presumes they will take home that pay. That additional $3.7 trillion in workers’ pockets would constitute newly taxable income, and therefore another $1.15 trillion in tax revenue.
This assumes that employers won’t assess a “fair share fee” to have workers pay for health care, which you could envision happening. A senior Warren aide doubted this would take place, because employers make out better under the plan than what they contribute today. But that’s not true for large corporations and multinationals, as we’ll see. The question of whether workers will realize higher take-home pay after Medicare for All is a critical one, and not a complete slam dunk in my view.
It is true that workers won’t have to bother with health savings accounts to shelter money for medical costs, or tax deductions for medical expenses. That saves another $250 billion.
The plan gets another $2.3 trillion by collecting what is already owed to the government. Warren goes about reducing the gap between the taxes people are supposed to pay and what they actually do by adding significant enforcement funding, expanding tax compliance measures, and redirecting audits to high-income earners.
Then there are targeted taxes on the financial sector: a 0.1 percent financial transaction tax on stocks, bonds, and derivatives, and a “systemic risk” fee on banks with more than $50 billion in assets. Ironically, the latter fee was part of Dodd-Frank until Scott Brown, whom Warren replaced in the Senate, forced the fee out as a condition for his vote. These two taxes reap another $900 billion.
Warren would close the expensing loophole, which allows businesses to realize the full cost of equipment investments up front. She would increase the minimum tax on multinationals that park earnings abroad to 35 percent, while prohibiting deferring those tax payments. She would put a tax on the domestic sales of foreign firms as well. That adds $2.9 trillion.
There’s an expansion of the “two cent” wealth tax through a surcharge of an additional three cents on wealth over $1 billion. Warren would also include a “mark-to-market” system of annually collecting capital gains taxes based on gains from that year, rather than only collecting capital gains on a sale. Senator Ron Wyden (D-OR) has proposed this change. A total of $3 trillion comes from these two changes.
Another $800 billion comes from eliminating an egregious slush fund for military spending called Overseas Contingency Operations, or OCO. This was supposed to be a short-term fund to finance war fighting, but has become a way to increase military budgets magically without counting the spending.
Finally, Warren applies the increased revenues from comprehensive immigration reform, around $400 billion according to an earlier estimate of an immigration bill from 2013. That revenue comes from taking the undocumented out of the shadows and giving them a path to citizenship, whereupon they pay federal taxes. To actually use such a pay-for, you would have to put the immigration bill into the Medicare for All bill; either one of them alone would be a heavy lift to pass, let alone both together.
All told, this $11 trillion in new revenue would still put America in the middle of the pack among developed nations in terms of taxation.
The Politics
In theory, that all costs out, according to top economists like MIT’s Simon Johnson, former Obama Council of Economic Advisers member Betsey Stevenson, and Moody’s Mark Zandi. The financing pays for a universal single-payer system without new taxes on the middle class. Individuals would pay for health care, of course, just as they do now: through dedicated Medicare taxes, and state and federal taxes that get put toward health care programs. But that would be it.More than anything, this comprehensive assessment allows Warren to pivot. Other candidates can quibble with her numbers, but she starts from the base of giving Americans back $11 trillion in individual premium and deductible payments. She can now assert the principles she leads her Medium post with, that nobody should go bankrupt in America from high-cost health care, that nobody should endure the hassle of determining in-network doctors and what treatments insurers will cover, that nobody should die from lack of access. She can lead on values instead of costs and financing.
“Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone, without costing the country anything more in health care spending, and while putting $11 trillion back in the pockets of the American people,” Warren writes, turning the tables on her opponents. “If they are unwilling to do that, they should concede that they think it’s more important to protect the eye-popping profits of private insurers and drug companies and the immense fortunes of the top 1% and giant corporations.”
I could see hardcore Sanders supporters cherry-picking the words “long-term goal” and claiming that Warren is not committed to getting Medicare for All done. But this plan is so wrapped up with her other concerns, and so in line with her populist message, that I think it will pass the test for most single-payer fans. And it allows her to go on offense against Joe Biden, Pete Buttigieg, and others, asking them why they don’t cover everyone, why they don’t cut costs, why they don’t want to end the horror of medical bankruptcies and unnecessary deaths.
“We need plans, not slogans,” Warren concludes.
https://prospect.org/health/warrens-medicare-for-all-plan-includes-no-new-taxes-on-the-middle-class/?emci=c64ab91c-cefc-e911-828b-2818784d6d68&emdi=547ef794-d6fc-e911-828b-2818784d6d68&ceid=1112297
Did Warren Pass the Medicare Test? I Think So
by Paul Krugman - NYT - November 1, 2019
Last week I worried
that Elizabeth Warren had painted herself into a corner by endorsing
the Sanders Medicare-for-all plan. It was becoming obvious that she
couldn’t stay vague about the details, especially how to pay for it; and
some studies, even by center-left think tanks, suggested that any plan
along these lines would require large tax hikes on the middle class. So
what would she come up with?
Well, the Warren plan is now out. And I’d say that she passed the test. Experts will argue for months whether she’s being too optimistic — whether her cost estimates are too low and her revenue estimates too high, whether we can really do this without middle-class tax hikes. You might say that time will tell, but it probably won’t: Even if Warren becomes president, and Dems take the Senate too, it’s very unlikely that Medicare for all will happen any time soon.
Nonetheless, Warren needed to show that she was working the problem. And she did. She brought in real experts like Donald Berwick, who ran Medicare during the Obama years, and Betsey Stevenson, former chief economist at the Labor Department. And they have produced a serious plan. As I said, experts will argue with the numbers, but this is the real thing — not some left-leaning version of voodoo economics.
How does the Warren plan expand Medicare to cover everyone without raising taxes on the middle class? There are four main components.
Well, the Warren plan is now out. And I’d say that she passed the test. Experts will argue for months whether she’s being too optimistic — whether her cost estimates are too low and her revenue estimates too high, whether we can really do this without middle-class tax hikes. You might say that time will tell, but it probably won’t: Even if Warren becomes president, and Dems take the Senate too, it’s very unlikely that Medicare for all will happen any time soon.
Nonetheless, Warren needed to show that she was working the problem. And she did. She brought in real experts like Donald Berwick, who ran Medicare during the Obama years, and Betsey Stevenson, former chief economist at the Labor Department. And they have produced a serious plan. As I said, experts will argue with the numbers, but this is the real thing — not some left-leaning version of voodoo economics.
How does the Warren plan expand Medicare to cover everyone without raising taxes on the middle class? There are four main components.
First, the Warren team
argues that a single-payer system would provide significant savings in
overall medical costs — more than other studies are assuming. Some of
these would come from bargaining down prices, especially on drugs.
Others would come from a reduction in administrative costs.
Are these savings plausible? Well, America does pay incredibly high prices for drugs compared with other countries, and the complexity of our system imposes a huge administrative burden — not just the overhead of insurance companies, but the sheer number of people doctors and hospitals have to employ to deal with multiple insurers. I’ve been puzzled at the reluctance of other studies to credit Medicare for all with big savings on these fronts.
And we should note that even with these assumed cost savings, U.S. health spending per capita would remain far above that of other advanced countries. So there’s a case — not an open-and-shut case, but a reasonable one — for optimism here.
Second — and the cleverest item in the plan — the Warren team would basically require employers who are now offering health insurance to their employees to pay the cost of that insurance to the government instead. Bear in mind that large employers are already required by law (specifically, the Affordable Care Act) to provide insurance. So this would just redirect those funds.
Third, state and local governments currently spend a lot on health care, mainly but not only through their share of Medicaid spending. The Warren plan would require “maintenance of effort,” basically requiring that states continue to spend that money, but on supporting a national plan.
Are these savings plausible? Well, America does pay incredibly high prices for drugs compared with other countries, and the complexity of our system imposes a huge administrative burden — not just the overhead of insurance companies, but the sheer number of people doctors and hospitals have to employ to deal with multiple insurers. I’ve been puzzled at the reluctance of other studies to credit Medicare for all with big savings on these fronts.
And we should note that even with these assumed cost savings, U.S. health spending per capita would remain far above that of other advanced countries. So there’s a case — not an open-and-shut case, but a reasonable one — for optimism here.
Second — and the cleverest item in the plan — the Warren team would basically require employers who are now offering health insurance to their employees to pay the cost of that insurance to the government instead. Bear in mind that large employers are already required by law (specifically, the Affordable Care Act) to provide insurance. So this would just redirect those funds.
Third, state and local governments currently spend a lot on health care, mainly but not only through their share of Medicaid spending. The Warren plan would require “maintenance of effort,” basically requiring that states continue to spend that money, but on supporting a national plan.
Finally,
even with all this there’s a significant budget hole. Warren’s team
argues that this can be closed in two ways: some further taxes on
corporations and large fortunes, and — an important point —
strengthening the I.R.S., which we know fails to collect large amounts
of legally owed taxes, principally from people with high incomes,
because Republicans have starved the agency of resources.
Am I enthusiastically endorsing this plan? No. I still think that a public-option-type plan, which lets people buy into Medicare, would have a better chance of actually becoming reality — and may well be where a President Warren actually ends up if she gets to the White House. And the plan’s optimism on costs and revenues could be wrong.
But this is a serious plan that reflects hard thinking. In particular, it’s nothing like the snake oil that passes for policy analysis on the right, whether it’s the continual insistence that tax cuts pay for themselves or Paul Ryan budgets that assumed that discretionary spending could be cut to Calvin Coolidge levels.
So what has Warren achieved here? Realistically, her health care plan is more aspirational than her other plans. Enhanced financial regulation and universal child care are things she might well be able to accomplish if she not only wins, but wins big, next year. Medicare for All, not so much. And may I say, it would serve the public well if these topics — plus climate change! — got more attention in future debates, and health care a bit less.
Warren’s task was, instead, to counter criticism that she was being evasive on a big issue. I think she has met that challenge.
https://www.nytimes.com/2019/11/01/opinion/did-warren-pass-the-medicare-test-i-think-so.html?action=click&module=Opinion&pgtype=Homepage
Am I enthusiastically endorsing this plan? No. I still think that a public-option-type plan, which lets people buy into Medicare, would have a better chance of actually becoming reality — and may well be where a President Warren actually ends up if she gets to the White House. And the plan’s optimism on costs and revenues could be wrong.
But this is a serious plan that reflects hard thinking. In particular, it’s nothing like the snake oil that passes for policy analysis on the right, whether it’s the continual insistence that tax cuts pay for themselves or Paul Ryan budgets that assumed that discretionary spending could be cut to Calvin Coolidge levels.
So what has Warren achieved here? Realistically, her health care plan is more aspirational than her other plans. Enhanced financial regulation and universal child care are things she might well be able to accomplish if she not only wins, but wins big, next year. Medicare for All, not so much. And may I say, it would serve the public well if these topics — plus climate change! — got more attention in future debates, and health care a bit less.
Warren’s task was, instead, to counter criticism that she was being evasive on a big issue. I think she has met that challenge.
https://www.nytimes.com/2019/11/01/opinion/did-warren-pass-the-medicare-test-i-think-so.html?action=click&module=Opinion&pgtype=Homepage
How Americans Split on Health Care: It’s a 3-Way Tie
Despite the lack of consensus, a new survey finds that almost two-thirds of the public favors Democratic approaches.
When
Americans are asked whether they support a “Medicare for all” system
that would replace all current insurance with a generous government
program, a majority often say yes. But when they’re asked follow-up
questions, they often reveal that they’re not familiar with the details
of that plan — or that they would also be happy with other Democratic
policy proposals.
In a new survey from The New York Times as well as the Commonwealth Fund and the Harvard T.H. Chan School of Public Health, we forced the issue. We asked a panel of 2,005 adults to pick their favorite plan from three choices. One resembled the Medicare for all proposal; one was like more incremental Democratic proposals; and one was like a plan proposed by congressional Republicans, which would reduce federal involvement in the health system and give more money and autonomy to states.
The share of the public supporting each option wound up being almost identical — around 30 percent each.
That means that most Americans support Democratic approaches to changing the health care system. But that group is about evenly split between an expansive set of changes under the Medicare for all proposal favored by Senators Elizabeth Warren and Bernie Sanders, and a less sweeping overhaul that would simply move the country closer to universal coverage, such as those from Joe Biden and Pete Buttigieg. (Not every politician’s health plan fits neatly in these categories. Kamala Harris, for example, has proposed a system that would eliminate most existing insurance arrangements, but replace them with a system with both public and private coverage options.)
In a new survey from The New York Times as well as the Commonwealth Fund and the Harvard T.H. Chan School of Public Health, we forced the issue. We asked a panel of 2,005 adults to pick their favorite plan from three choices. One resembled the Medicare for all proposal; one was like more incremental Democratic proposals; and one was like a plan proposed by congressional Republicans, which would reduce federal involvement in the health system and give more money and autonomy to states.
The share of the public supporting each option wound up being almost identical — around 30 percent each.
That means that most Americans support Democratic approaches to changing the health care system. But that group is about evenly split between an expansive set of changes under the Medicare for all proposal favored by Senators Elizabeth Warren and Bernie Sanders, and a less sweeping overhaul that would simply move the country closer to universal coverage, such as those from Joe Biden and Pete Buttigieg. (Not every politician’s health plan fits neatly in these categories. Kamala Harris, for example, has proposed a system that would eliminate most existing insurance arrangements, but replace them with a system with both public and private coverage options.)
So what are people really saying when they say they like Medicare for all?
They don’t like the health system
The group that preferred Medicare for all was more disgruntled with the current system than other groups, and more comfortable with drastic change. Only 21 percent said they thought the United States had the best health care system in the world, compared with 55 percent among those supporting the Republican plan. Majorities of the Medicare for all group said they were dissatisfied with the cost of their health care and worried about their ability to pay if they became ill in the next year. Still, a majority of this group also said they were satisfied with the quality of their care and their current insurance.
Robert
Blendon, a professor of health policy and political analysis at the
Harvard School of Public Health, who helped write the study, said the
overlap between dissatisfaction and support for the proposal showed that
Medicare for all’s strong supporters understand that it would cause
substantial disruption of the current system. Critics have said that the
proposal goes too far because it would involve eliminating most private health insurance and could reshuffle the finances of major health care companies.
“There’s no question that the level of dissatisfaction leads to interest in big proposals,” he said, describing their perspective. “When I’m really dissatisfied, I’m interested in Canada. I want to do big new things.”
The Republican proposal would also cause large disruptions in the system, upending the current Medicaid expansion and the markets for people who buy their own insurance. The survey respondents who favored that plan seemed largely satisfied with the status quo. That may be because they do not think those changes will affect them personally. It may also be because a Republican is in the White House now, so the status quo seems rosier to them than it did a few years ago.
“There’s no question that the level of dissatisfaction leads to interest in big proposals,” he said, describing their perspective. “When I’m really dissatisfied, I’m interested in Canada. I want to do big new things.”
The Republican proposal would also cause large disruptions in the system, upending the current Medicaid expansion and the markets for people who buy their own insurance. The survey respondents who favored that plan seemed largely satisfied with the status quo. That may be because they do not think those changes will affect them personally. It may also be because a Republican is in the White House now, so the status quo seems rosier to them than it did a few years ago.
They think taxes are a fair trade-off for coverage
Supporters of Medicare for all were more approving of socialism and showed stronger support for the notion that the government should be responsible for ensuring universal access to health care for all Americans. When asked if they were comfortable paying higher taxes in exchange for health coverage for everyone, 79 percent said they would be willing, a substantially higher proportion than respondents in the other two groups.
Those findings suggest
that critiques based on the high cost of the proposal probably won’t do
much to deter its strongest supporters. But the idea of higher taxes was
less popular over all. Fifty-three percent of all respondents said they
would personally pay more taxes so that everyone could have health
care. Only 23 percent of those favoring the Republican plan said they
would.
“Protection for people with pre-existing conditions is the status quo, and it can’t be taken away except at a huge political cost,” said David Blumenthal, the president of the Commonwealth Fund.
They think the government should play a bigger role
All three groups showed consensus on some points. Large majorities thought the government should require insurers to continue offering coverage to people with pre-existing health conditions. That answer, consistent with some other recent surveys, represents a shift. The Affordable Care Act first provided robust consumer protections for such people, and as recently as two years ago, most Republicans in Congress voted for legislation that would have substantially weakened those protections. Obamacare itself now consistently enjoys majority support in surveys, after years of being under water.“Protection for people with pre-existing conditions is the status quo, and it can’t be taken away except at a huge political cost,” said David Blumenthal, the president of the Commonwealth Fund.
There was
also relatively broad agreement that health care is a right. When asked
whether all Americans should have a right to health care regardless of
their ability to pay, nearly 80 percent of all respondents agreed. Sixty
percent of those favoring the Republican health plan believed health
care was a right, but among those favoring the two Democratic proposals,
support exceeded 90 percent.
Where the groups
differed was in how a universal health care system should be achieved.
Eighty-five percent of the Medicare for all enthusiasts thought it was
the responsibility of government to ensure all Americans had health
coverage. Only 73 percent of those supporting more incremental
Democratic reforms agreed. Among those supporting the Republican plan,
the number was 20 percent. Sixty-five percent of people in that group
said the government should become less involved in health care in the
future.
Those factors lead Mr. Blendon to believe there are immediate opportunities for Democrats to devise a plan with broad appeal. The underlying shared values endorsed by supporters of both Democratic approaches — about rights to health care, protections for the sick, and a larger role for the government in ensuring equity — could be paired with a more modest set of policy changes.
In the long term, however, the appeal of Medicare for all may hinge on how well the current health care system serves the public. Recent research has found that employer health plans, the most common and popular form of health insurance for working-age Americans, have become substantially less affordable. More Americans are now what experts call “underinsured,” meaning that their coverage still leaves them exposed to a damaging financial hit if they get sick. If those trends continue, a greater share of Americans may find themselves dissatisfied with the system and fearful about how it will treat them if they need it.
“Most Americans want everyone to have coverage, but some people are willing to sacrifice more to get there than others,” Mr. Blumenthal said. “The people who are willing to sacrifice more are the people who have less to lose.”
If the status quo gets bad enough, the number of people seeking big changes could grow.
The survey included landline and cellphone telephone interviews with 2,005 nationally representative adults. Interviews were conducted in English and Spanish. The margin of error is plus or minus 2.5 percentage points for most questions.
To divide the panel into the three groups, respondents were asked to select a favorite of three policies described as:
Changing our health care system so that all Americans would get health insurance from Medicare, which is now mainly for people age 65 or over and is paid for by taxpayers. This plan is often called Medicare for all.
Keeping the existing Affordable Care Act, also known as Obamacare, and passing additional legislation to improve how it works.
Replacing the Affordable Care Act, also known as Obamacare, with a new law that would give taxpayer funding to states to design their own health insurance systems with fewer rules.
https://www.nytimes.com/2019/10/30/upshot/Survey-health-3-way-tie.html?smid=nytcore-ios-share
Will their ranks grow?
On many questions about policy and values, there was broad overlap between the supporters of Medicare for all and supporters of a more incremental approach to coverage expansion. And many survey respondents struggled to express a strong preference between the two choices.Those factors lead Mr. Blendon to believe there are immediate opportunities for Democrats to devise a plan with broad appeal. The underlying shared values endorsed by supporters of both Democratic approaches — about rights to health care, protections for the sick, and a larger role for the government in ensuring equity — could be paired with a more modest set of policy changes.
In the long term, however, the appeal of Medicare for all may hinge on how well the current health care system serves the public. Recent research has found that employer health plans, the most common and popular form of health insurance for working-age Americans, have become substantially less affordable. More Americans are now what experts call “underinsured,” meaning that their coverage still leaves them exposed to a damaging financial hit if they get sick. If those trends continue, a greater share of Americans may find themselves dissatisfied with the system and fearful about how it will treat them if they need it.
“Most Americans want everyone to have coverage, but some people are willing to sacrifice more to get there than others,” Mr. Blumenthal said. “The people who are willing to sacrifice more are the people who have less to lose.”
If the status quo gets bad enough, the number of people seeking big changes could grow.
The survey included landline and cellphone telephone interviews with 2,005 nationally representative adults. Interviews were conducted in English and Spanish. The margin of error is plus or minus 2.5 percentage points for most questions.
To divide the panel into the three groups, respondents were asked to select a favorite of three policies described as:
Changing our health care system so that all Americans would get health insurance from Medicare, which is now mainly for people age 65 or over and is paid for by taxpayers. This plan is often called Medicare for all.
Keeping the existing Affordable Care Act, also known as Obamacare, and passing additional legislation to improve how it works.
Replacing the Affordable Care Act, also known as Obamacare, with a new law that would give taxpayer funding to states to design their own health insurance systems with fewer rules.
https://www.nytimes.com/2019/10/30/upshot/Survey-health-3-way-tie.html?smid=nytcore-ios-share
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