US election 2020: Elizabeth Warren sets out health funding plan
1 November 2019
She said "Medicare for All" would not raise taxes "one
penny" for ordinary Americans, but would largely be paid for by businesses
and the wealthy.Ms Warren is a Democratic front-runner in the 2020 race to the White House.
But she has faced criticism over lack of detail about her Medicare plan.
What does her plan say?
Ms Warren, who moved clear of her key rival Joe Biden in a poll in the early-voting state of Iowa on Friday, said her plan would not spend "any more money overall than we spend now". But she said the share spent by the federal government would increase to $20.5tn.Her plan would mandate that employers pay the government the same amount that they currently contribute for private health insurance for their staff.
According to her campaign, the current US health system will cost $52tn over the next decade. Economists have estimated the cost of Medicare for All at $13.5tn to $34tn in the same timeframe.
"The $11tn in household insurance and out-of-pocket expenses projected under our current system goes right back into the pockets of America's working people," her plan states.
"And we make up the difference with targeted spending cuts, new taxes on giant corporations and the richest 1% of Americans, and by cracking down on tax evasion and fraud. Not one penny in middle-class tax increases."
·
raise her previously proposed wealth tax on
billionaires from 3% to 6%
·
increase corporate taxes
·
tax transactions such as stock trades
·
raise revenue through immigration reform - by
turning undocumented migrants into legal, taxpaying workers
"Healthcare in America is world-class," the Massachusetts senator
wrote in her proposal. "Medicare for All isn't about changing any of that.
It's about fixing what is broken - how we pay for that care."What is 'Medicare for All'?
First proposed by Ms Warren's fellow liberal senator, Bernie Sanders, it is a measure to expand the federally run health programme for the elderly and disabled, Medicare, into a single-payer health system.The federal government would become the sole insurance provider for all essential and preventative healthcare.
Under Ms Warren's plan, the private health insurance that more than half of Americans now receive through their employers would be replaced by free federal medical coverage for everyone.
According to her campaign, the array of often puzzling medical bills currently faced by US patients - such as premiums, deductibles, co-pays and other out-of-pocket expenses - would be abolished.
Several more moderate Democratic candidates - including another front-runner, Joe Biden - favour adding the option of government-run medical insurance for all Americans while allowing those who wish to to keep their private medical coverage.
It is not a universal healthcare system under which the government would own and operate hospitals - instead, the government would pay private providers an agreed-upon rate for their services.
Unlike Ms Warren, Mr Sanders has said his plan to pay for Medicare for all would require an increase in taxes on the middle class, without offering specifics.
Being "realistic" isn't necessarily the goal of Ms Warren's proposal or even the central point of her plan-heavy campaign, however. The Massachusetts senator and her supporters would argue that pragmatism and a misplaced sense of what's possible are the enemies of substantive progress.
Critics may pick apart portions of her sweeping healthcare proposal, but it is substantive enough to protect Ms Warren from allegations that she is making promises without considering the price tag. Such questions proved to be a point of weakness for the candidate in recent debates. In the clashes to come she will be better prepared to respond.
Mr Sanders said during the debate that it was "appropriate to acknowledge" that taxes would go up.
Mr Biden, with whom Ms Warren has vied for status as frontrunner, said in an interview with PBS on Friday: "She's making it up. Nobody thinks it's $20 trillion. It's between $30-40 trillion. Every major independent study that's gone out there that 's taken a look at this. There's no way."
Pete Buttigieg told Fox News on Thursday that all the candidates "have a responsibility to explain how our plans are going to be paid for".
"My concern about the plan she's putting forward is not just the multi-trillion-dollar hole but also the fact that most Americans would prefer not to be told that they have to abandon their private plan."
The criticisms from more moderate Democrats continued after Ms Warren's announcement on Friday.
Voters are sick and tired of politicians promising them things that they know they can’t deliver. @ewarren's new Medicare for All numbers are simply not believable, and have been contradicted by experts.
— Michael Bennet (@MichaelBennet) November
1, 2019
End of Twitter post by @MichaelBennet
— John Delaney (@JohnDelaney) November
1, 2019
End of Twitter post by @JohnDelaney
Elizabeth Warren announces $20-trillion ‘Medicare for
all’ proposal
Sen. Elizabeth Warren is the first
of the Democratic presidential candidates to fully describe how a “Medicare for
all” plan would be paid for.
(Steve Pope / Getty Images)
By Evan HalperStaff
Writer
Nov. 1, 2019
7:54 AM
WASHINGTON —
Ending her months-long silence
on how to pay for moving the entire nation into a government-run healthcare
system, Elizabeth Warren on Friday laid out a detailed plan that relies on
trillions of dollars in new taxes on the rich and corporations, big pay-ins
from employers and aggressive cost cutting.
With her proposal, Warren becomes
the first of the Democratic candidates to fully describe how a “Medicare for
all” plan would be paid for. Her chief rival on the party’s left, Sen. Bernie
Sanders of Vermont, who has campaigned in favor of a government-run medical
plan for years, has outlined various options for financing, but has not
committed to one.
Warren argues in her plan that
America could do away with private insurance — entirely eliminating premiums,
deductibles and co-payments — and move everyone into a single-payer system
without sacrificing care and without hiking taxes on the middle class.
“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 in a Medium post describing her
plan. She vowed the single-payer system could be achieved “without a tax
increase on the middle class — and, in fact, without any increase in income
taxes at all.”
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Warren maintains that a
single-payer, Medicare for all system could cover everyone in the U.S. and
provide expanded benefits, including long-term care, for roughly what
the country is currently slated to spend on healthcare — about $52 trillion
over a decade.
Covering more people with more
benefits for the same amount of money would require holding down the amounts
paid to doctors and hospitals, limiting doctors to the amount currently paid by
Medicare and hospitals to slightly above current Medicare rates.
And even if overall costs do not
increase, government spending would surge under the Warren plan, to cover the
costs currently generated by premiums and out-of-pocket costs for families. The
tab to the federal government would be more than $20 trillion over the next
decade — roughly a one-third increase in the total federal budget.
Instead of income tax hikes, Warren
would cover nearly half that cost by collecting $9.1 trillion in additional
taxes from corporations and high-income families over the next 10 years.
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The amount would eclipse the wealth
tax Warren has earlier proposed to fund such things as student debt relief and
free public college. Several liberal economists have already
warned the wealth tax might generate only a fraction of the revenue she
envisions.
Warren would cover much of the rest
of the cost by requiring employers to continue paying, on average, what they
currently pay to cover their workers under group insurance plans. Instead of
paying an insurance company, however, they would pay the government. Their bill
would be calculated based on their average spending on employee health
insurance over the last few years.
Warren argues the cost would be less
onerous than what those employers currently face, as they would be shielded
from existing runaway healthcare price increases because costs would not rise
faster than inflation under her plan.
“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,” Warren wrote.
The new taxes and the curbs on
payments to doctors and hospitals almost certainly will provide fresh lines of
attack for Warren’s opponents as she moves to lock down her place as a
front-runner in the final stretch before voting begins in February, starting
with the Iowa caucuses.
Warren’s tax proposals include a
substantial increase in her wealth tax, aimed largely at billionaires.
A new, annual capital gains tax
would be billed to the richest 1% of Americans. Warren called for several
trillion dollars of new taxes on financial firms and large corporations. They
include rolling back the tax cuts signed into law by President Trump, but also
go far beyond that.
Among the new taxes would be one on
financial transactions, with levies collected when stocks and bonds are bought
and sold. Large financial institutions would pay a new “systemic risk fee.”
Corporations would lose trillions of dollars of tax deductions they are
currently eligible to claim, and firms that move their profits abroad would be
targeted with substantial new levies on the overseas money.
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To collect all of this money — and
trillions more Warren argues could be collected under current law if tax
enforcement were adequate — the senator is arguing for a significant expansion
of the Internal Revenue Service.
“The wealthy and their allies in
Washington have worked to slash the IRS budget, leaving it without the
resources it needs,” Warren wrote. She argued that the “tax gap” in the U.S.,
the money that is currently owed the IRS but is going unpaid and uncollected,
is substantially larger than it is in other wealthy nations, such as the United
Kingdom.
Yet most every element of her plan —
from expanding the IRS to putting cost controls on healthcare to vastly
expanding taxes on the rich — would be almost certain to face stiff resistance
in Congress. The plan would be a historic political lift.
As Warren has with her other plans,
she presented this one with a stamp of approval from pedigreed experts in the
field. Among those who vetted Warren’s revenue projections were Simon Johnson,
the former chief economist at the International Monetary Fund.
Sources:
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