Sen. Elizabeth Warren’s “Medicare for All” funding plan has come under fire from her rivals for the Democratic nomination, but some in her own party say her framing of the issue could ease the concerns of centrist voters.
The Massachusetts senator and leading Democratic presidential candidate said when she released her funding plan earlier this month that it “doesn’t raise middle-class taxes by one penny.”
She estimated that Medicare for All would require $20.5 trillion in federal spending and said that would be paid for with taxes that would directly fall on employers, corporations, wealthy individuals and financial institutions.
For Democratic strategists, Warren’s approach could be a way to soothe voters’ worries about Medicare for All while advancing key progressive ideas.
“The fact that she has devised a plan that would benefit middle class Americans without taxing [them] is certainly reassuring to a lot of people,” said Brad Bannon, a Democratic strategist who isn’t working for any of the presidential campaigns.
“What Warren’s plan does is giving voters bold change without raising middle class taxes,” Bannon added.
The plan has stoked controversy, with some critics questioning Warren’s claims that it will avoid raising taxes on the middle class.
A key component is payments that employers would make to the federal government, estimated to raise $8.8 trillion.
Some policy experts say that Warren’s proposed employer contribution is a tax that would ultimately be paid by workers. But others argue that burdens on the middle class wouldn’t go up because employers would be shifting from making payments to private insurers to payments to the federal government.
Supporters of Warren’s plan also note that the plan makes clear that Warren would eliminate premiums, deductibles and copays, which should be a relief for voters with questions about Medicare for All.
Adam Green — co-founder of the Progressive Change Campaign Committee (PCCC), which has endorsed Warren — said that “Warren’s Medicare for All financing plan is functionally like an $11 trillion tax cut for middle class families,” because it eliminates out-of-pocket health costs for workers and targets tax increases at the wealthy and corporations.
Warren is one of the leading candidates in the Democratic primary, and health care is one of the most prominent issues in the race. But her plan also came after she faced intense pressure to provide details on how she would fund Medicare For All.
She had avoided saying in debates whether she’d raise taxes on the middle class to pay for Medicare for All, leading to criticism from more moderate candidates such as former Vice President Joe Biden. Sen. Bernie Sanders (I-Vt.), the other top-tier candidate with a Medicare for All plan that would do away with private insurance, has said he would directly raise taxes on the middle class to pay for his plan.
Because Warren’s plan claims it won’t raise taxes on the middle class, it “takes some of the starch” out of attacks she’ll receive from Biden, Bannon said. It also “puts her up as a great selling point in the battle against Sanders,” he added.
The release of Warren’s plan also allowed her to provide answers to a question that debate moderators had consistently pressed her on, even as she rose in the polls and voters viewed her debate performances favorably.
“In each of the last debates, while pundits were obsessing about magic words around taxes, voters were consistently saying Elizabeth Warren won,” Green said.
Strategists also said they see Warren’s Medicare for All plan as an effort to reinforce that she is the candidate with detailed policy solutions.
Michael Fraioli, a Democratic strategist who had worked on Rep. Tim Ryan‘s (D-Ohio) now-defunct presidential campaign and is unaffiliated, said that Warren — who has used the slogan “I have a plan for that” — needed to provide details on her “signature issue” of Medicare for All.
Warren’s Medicare for All funding plan isn’t the only area where she’s taken steps to make her proposals for big changes to the economy seem more palatable to moderate voters. For example, Warren stresses that she’s a capitalist, unlike Sanders, who describes himself as a democratic socialist.
But it remains to be seen how effective Warren’s health care funding plan will be in easing the concerns of voters who have reservations about Medicare for All.
Some of the fiercest critics of her plan have been her more centrist rivals in the Democratic primary, such as Biden.
The proposal also has drawn criticism from some Democratic-leaning economic policy experts, in addition to many tax experts on the right. For example, Larry Summers, a key player on economic policy in past Democratic presidents’ administrations, argued in a Washington Post op-ed on Tuesday that “the combined tax impact of Warren’s various plans is extreme.”
Jim Kessler, executive vice president for policy at the center-left think tank Third Way, said he thinks Warren tried to ease people’s concerns with her funding plan, but “there’s a lot of skepticism out there by reasonable people.”
“It needs to hold up to scrutiny and I’m not sure it can,” he said.
GOP politicians have also already started to attack Warren over her Medicare for All plan.
Senate Majority Leader Mitch McConnell (R-Ky.) said on the Senate floor Tuesday that Warren’s proposal was “breathtaking.”
“In order to take away employer-sponsored insurance from 180 million Americans, Democrats want to kill American jobs and bring the economy to a screeching halt,” McConnell said.
Democratic strategist Craig Varoga said that Republicans will likely ignore the fact that Warren’s funding mechanisms are targeted on businesses and wealthy people, and instead hone in on her proposing around $20 trillion in tax increases.
“Republicans will not discuss the specifics of Warren’s funding mechanism, only the size of it, and they will reduce it to bumper-sticker simplicity, that it’s the biggest tax increase in American history,” he said. “It doesn’t matter whether that’s accurate or not, or how it polls 12 months before the election, that’s what they will say, and Trump will say it louder than anyone.”
The Progressive Change Institute, also co-founded by Green, is planning in the coming days to make public the results of a poll, done in partnership with Public Citizen and Business for Medicare For All, that finds that a majority of registered voters support Medicare for All, both nationally and in battleground states.
However, a recent poll released by the Kaiser Family Foundation (KFF) and the Cook Political Report found that most Democratic voters in four key battleground states think Medicare for All is a good idea, but that most swing voters in those states view it as a bad idea.
Both the Progressive Change Institute and the KFF surveys were conducted before Warren released her funding plan.
Ashley Kirzinger, associate director for public opinion and survey research at KFF, said it is “yet to be determined” how the plan will resonate with the public, given that Republicans will use it against Warren but that people become more favorable toward Medicare for All when they learn it will eliminate their out-of-pocket costs.
“People are still learning how it works,” she said.
“You just don’t think that that plan would ever get enacted?” interviewer Andrew Ross Sorkin asked Clinton at The New York Times DealBook Conference.
“No, I don’t. I don’t, but the goal is the right goal,” the former secretary of State responded.
“I believe the smarter approach is to build on what we have. A public option is something I’ve been in favor of for a very long time,” Clinton said. “I don’t believe we should be in the midst of a big disruption while we are trying to get to 100 percent coverage and deal with costs.”
Amid the raging health care debate among the Democratic presidential candidates, Clinton, the party’s 2016 nominee, appears to line up more with former Vice President Joe Biden and South Bend, Ind., Mayor Pete Buttigieg, who are pushing for an optional government insurance plan, rather than Warren and Sen. Bernie Sanders (I-Vt.), who are pushing government insurance for all.
Clinton, though, tried to shift the debate back to highlighting the contrast between Democrats and Republicans, pointing to the fact that the GOP is trying to repeal the Affordable Care Act, including backing a lawsuit currently in the courts to overturn the entire law.
“Yeah, we’re having a debate on our side of the political ledger, but it’s a debate about the right issue, how do we get to health care coverage for everybody that we can afford?” Clinton said, noting the GOP is “in court right now to strike the entire law down.”
Elizabeth Warren, who rose to the top with big liberal bets, is banking a big slice of her presidential run on full-throated support for Medicare for All.
Why it matters: Warren is taking a beating on social media after claiming middle class Americans won’t pay higher taxes to fund health care coverage fully paid for by taxpayers, according to data from NewsWhip provided exclusively to Axios. At the same time, her poll numbers nationally are slipping.
Despite Trump administration warnings about “Medicare for All” and other expansions of public coverage upending the private market, some executives at HLTH last week seemed more agnostic about the Democrat-backed plans, some of which would eliminate private insurance altogether.
”It’s a symptom of a pricing issue, and a rate issue,” Vivek Garpialli, CEO of Medicare Advantage plan provider Clover Health, said. “Until we see a better idea, it’s actually not a bad framework to have a debate around and, unless a better one comes along in the next three, five, 10 years, it probably is inevitable.”
Democratic candidates hoping to take on incumbent President Donald Trump in 2020 are pitching a slate of proposals to give the current healthcare system a major facelift. Former Vice President Joe Biden endorses a public option and bolstering the Affordable Care Act, while Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., are stumping for a Medicare for All-type system that would terminate private insurance.
The debate itself is a “good example of the fact that the status quo needs to change,” Tom Richards, global strategy and business development leader at Cigna, told Healthcare Dive.
Many healthcare tech startups have configured their products to be compatible within multiple platforms or companies, including myriad providers, Medicare, insurance on the ACA exchanges or employer-based coverage, so the payer platform doesn’t matter as much to them — or their margins.
“So long as innovation is maintained, I think it could go either way,” Pranay Kapadia, CEO of voice-enabled digital assistant startup Notable, said.
But executives, even on the startup side, seemed leery about the uncertainty Medicare for All would inject into the system.
“At the end of the day, the government is already unable to fully fund its obligations, from Social Security, to Medicare, to Medicaid,” Ali Diab, CEO of employer-sponsored insurance startup Collective Health, said.
“Unless someone proposes a means to actually fund it that’s credible, I just don’t see a way for the government to take on more of the financial burden,” he said, though he clarified he didn’t have an opinion on the politics either way.
Moving to some form of a nationalized healthcare system could drag down profit margins across the industry (especially for payers). Cost estimates for the plans vary in the tens of trillions, from Sanders’ $33 trillion to Warren’s $52 trillion, both spread out over a decade.
Democratic backers say Medicare for All will drive down overall costs in the long run, despite hiking federal spending. Warren, who released her plan Friday, pledged there would be no middle-class tax increases and that Americans’ pocketbooks would be helped overall due to the elimination of premiums and other out-of-pocket costs.
But industry isn’t so sure the government could implement such a sweeping plan, even if it wanted to.
“I just don’t see the legislators getting their act together to make this happen and, frankly, I don’t want to wait for them,” Marijka Grey, executive leader for transformation implementation at 150-hospital CommonSpirit Health, said.
At HLTH, Trump administration officials kept up their drumbeat of criticism of the idea.
It would “hand the reins to government bureaucrats to fix all our problems” and is marked by an “unwarranted confidence in government central planners,” CMS Administrator Seema Verma said, while White House policy official and ex-pharma lobbyist Joe Grogan said Democrats “cannot accept no one is smart enough to design a healthcare system for all Americans.”
Few Democrats have released comprehensive healthcare proposals, though 11 of the remaining 16 candidates support some version of single-payer healthcare.
“Quite frankly, branding-wise it’s not horrible,” Adam Boehler, the former head of CMS’ innovation center, said. “In my opinion, it’s the content versus the brand in terms of whether something will work or not.”
A new report from the Georgetown University Health Policy Institute says the number of uninsured children in the U.S. increased by more than 400,000 between 2016 and 2018.
Some key findings from the report:
The report’s authors said it’s no coincidence that the increases in the number of uninsured children have occurred since President Trump took office in 2017.
“This serious erosion of child health coverage is likely due in large part to the Trump Administration’s actions that have made health coverage harder to access and have deterred families from enrolling their eligible children in Medicaid and CHIP,” they wrote in their conclusion. “These actions include attempting to repeal the ACA and deeply cut Medicaid, cutting outreach and advertising funds, encouraging states to put up more red tape barriers that make it harder for families to enroll or renew their eligible children in Medicaid or CHIP (or ignoring it when they do), eliminating the ACA’s individual mandate penalty, and creating a pervasive climate of fear and confusion for immigrant families.”
Elizabeth Warren on Friday detailed how she intends to pay for Medicare for All without raising costs for middle-class households. The senator from Massachusetts said her plan will cover everyone in the country without raising overall spending, “while putting $11 trillion back in the pockets of the American people by eliminating premiums and virtually eliminating out-of-pocket costs.”
Warren’s plan relies in large part on redirecting existing spending toward a universal, federal health care system, while adding new revenues from taxes on the wealthy, the financial sector and large corporations. “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 said.
Some key details from the Warren plan:
Much lower cost estimate: Warren starts with the Urban Institute’s estimate that the federal government would need $34 trillion more over 10 years to pay for Medicare for All, but she slices that number dramatically — down to $20.5 trillion — by using existing federal and state spending on programs including Medicaid to fund a portion of her proposal, along with larger assumed savings produced by a streamlined system paying lower rates to hospitals, doctors and other health care providers.
Total health care spending stays about the same: Warren projects about $52 trillion in national health care spending over 10 years, close to estimates for the existing system, despite covering more people and offering more generous benefits, including long-term care, audio, vision and dental benefits. Applying Medicare payment levels across the health care system is projected to produce substantial savings that would be used to finance the expanded size and scope of the plan.
Heavy reliance on employer funding: The employer contribution to Medicare for All is pegged at $8.8 trillion, with employers required to contribute to the federal government 98% of what they would pay in employee premiums. Businesses with fewer than 50 employees would be exempt.
Public spending continues: State and local governments would be still on the hook for the $6 trillion they currently spend on Medicaid, the Children’s Health Insurance Program and public employee premiums.
New taxes on the wealthy: Warren proposes a new 3% tax on household wealth over $1 billion — and that’s on top of her proposed wealth tax, which calls for a separate 3% tax on wealth over $1 billion (and a 2% tax on wealth between $50 million and $1 billion). Combined with an annual capital gains tax on the top 1% of households, her proposal projects that the new health-care-focused wealth taxes would produce $3 trillion.
Taxes on business and finance: Warren says she can raise $3.8 trillion through “targeted” taxes on big business and financial transactions, including a financial transaction tax of .01% on the sale of stocks, bonds and derivatives.
Reduced tax evasion: Cracking down on tax evasion is projected to bring in $2.3 trillion. “The federal government has a nearly 15% ‘tax gap’ between what it collects in taxes what is actually owed because of systematic under-enforcement of our tax laws, tax evasion, and fraud,” Warren said. “By investing in stronger enforcement and adopting best practices on tax reporting, withholding, and filing, experts predict that we can close the tax gap by a third.”
Revenue increase from higher take-home pay: Employees would no longer pay premiums for health insurance, providing a pay hike and higher tax revenues, estimated to total $1.4 trillion.
Abolishing the Overseas Contingency Operations fund: Warren is calling for reduced military spending, with a focus on what some call the “slush fund” that covers the cost of overseas military operations. Eliminating this off-budget spending is projected to save $800 billion.
Immigration reform: Expanded legal immigration would bring in $400 billion in revenue as more incomes are subject to taxes, Warren says.
A record tax cut? Once the new revenues and cost savings are added up, Warren says her plan will deliver what amounts to an historic tax cut. “No middle class tax increases. $11 trillion in household expenses back in the pockets of American families. That’s substantially larger than the largest tax cut in American history.”
Warren won plaudits from some analysts and policy wonks for releasing a plan, but the details she laid out are also being picked apart by critics and rivals, with some experts already expressing doubts about her assumptions and numbers. Here’s some of the reaction:
Congratulations from a conservative: “Kudos to Senator Warren for actually releasing a plan,” said Scott Greenberg, formerly an analyst with the right-leaning Tax Foundation. “There are a lot of things in here that will draw attacks from the left and from the right, and it might have been politically easier not to release it at all. But Warren has stuck by her commitment to explain her proposals.”
Criticism from a key rival: “The mathematical gymnastics in this plan are all geared towards hiding a simple truth from voters: it’s impossible to pay for Medicare for All without middle class tax increases,” said Kate Bedingfield, deputy campaign manager for Joe Biden. Bedingfield argued that employees would end up paying the tax on employers.
Dire warnings from the White House: “It is the middle class who would have to pay the extra $100 billion or more to finance this kind of socialist government takeover of health care,” said Larry Kudlow, President Trump’s top economic adviser. “It would have a catastrophic effect on the economy and all these numbers that we’re seeing, all these numbers, on incomes per household, on wage increases, on jobs, all these numbers would literally evaporate and by the by, so would the stock market.”
Tax vs. premium: Warren’s plan will likely kick off a debate about the difference between taxes and health care premiums, and whether that difference matters, says William Gale of the Brookings Institution. “Does [the Warren plan] raise ‘taxes’ on the middle class?,” Gale asked Friday. “Short answer — it does not raise ‘burdens’ on the middle class.”
Cost reduction is crucial: “The key to Warren’s plan for financing Medicare for all is aggressively constraining prices paid to hospitals, physicians, and drug companies. We’d still have the most expensive health system in the world, but it would be less expensive than it is now,” said Larry Levitt of the Kaiser Family Foundation. “Warren’s plan to aggressively constrain health care prices under Medicare for all would be quite disruptive. On the other hand, every other developed country has managed to figure it out, so we know it’s possible.”
And the battle is ultimately political: “In laying out the specifics of her Medicare for all plan, Warren’s challenge is more about politics than arithmetic,” Levitt continued. “She is taking on the wealthy, corporations, and pretty much every part of the health care and insurance industries. Those are some powerful enemies.”
So don’t expect major legislation soon: “Experts will argue for months whether [Warren is] 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,” said economist Paul Krugman. “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.”