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Tuesday, November 5, 2019

How Medicare for All might work

Warren releases Medicare for All financing plan, without middle class tax hikes
Joan McCarter, Daily Kos Staff

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Sen. Elizabeth Warren has expanded, dramatically, on the initial healthcare page her campaign released with a full-blown, carefully considered, expert-vetted Medicare for All plan, with financing that doesn't require a middle-class tax increase.

She created a big task for herself: "Under my plan, Medicare for All will cover the full list of benefits outlined in the Medicare for All Act, including long-term care, audio, vision, and dental benefits. My plan will cover every single person in the U.S., and includes common-sense payment reforms that make Medicare for All possible without spending any more money overall than we spend now."

On paper, she succeeds. That's an important factor to note—there are a lot of unknowns in future spending, but working with the current system and with an expansive knowledge of what's working and what's broken within it, she's created a plan with financing that is grounded in today's reality.

Noting that overall spending on health care is estimated to be $52 trillion over the next 10 years, Warren has structured a plan that would stay under that target by:

  • Using existing Medicare and Medicaid spending at the federal and state levels;
  • Shifting other spending to provide universal coverage through a combination of:
    • Redirected employer spending on health insurance;
    • Shifting from insurance companies to a federal insurance;
  • New taxes on financial firms, giant corporations, and the top 1%;
  • Increased enforcement of tax laws to capture taxes the rich and corporations regularly evade now and
  • Shifting wasteful defense spending.
That will make up the $11 trillion that individuals spend out of pocket "in the form of premiums, deductibles, copays, and out-of-pocket costs."

With it comes more certainty than either employers or employees have now. Employers will be less subject to the whims of insurers and will have a set formula for determining what they pay.

Her plan is structured to keep their spending on what's essentially a new from of payroll tax under what they currently spend.

The savings will be directed to increased compensation to employees; they'll get back in direct wages what have been indirect compensation in the form of insurance premiums paid by employers.

Without changing the current tax structure for middle class workers, the increase in taxes on their wages will constitute their contribution.

Some unions have been hostile to a Medicare for All scheme because of the good health insurance they've bargained for. 

She addresses that as well by allowing employers who have collective bargaining agreements to reduce their "Employer Medicare Contribution if they pass along those savings to workers in the form of increased wages, pensions, or other collectively-bargained benefits."

She also encourages companies which don't have these agreements to create them by giving them the same deal, creating "a significant new incentive for unionization generally by making collective bargaining appealing for both workers and employers as a way of potentially reducing the employer's Employer Medicare Contributions."

She also acknowledges the role that immigration reform can play, noting that a CBO analysis of the 2013 comprehensive immigration reform would generate $400 billion in direct federal revenue.

Her plan was developed with expert assistance on two fronts—how to make a universal healthcare system and secondly, how to pay for it.

On the delivery side, she consulted with Don Berwick, the former director of the Centers for Medicare and Medicaid Services; and Simon Johnson, the former chief economist at the World Bank.

She worked with Betsey Stevenson, who served as chief economist at the Labor Department under President Obama and Mark Zandi, the head economist at Moody’s Analytics, along with Johnson to develop the tax portion of the plan.

There's much more in this plan to unpack, including how she'll deal with providers and pharmaceutical companies and every other stakeholder, but it's key to note that it's classic Elizabeth Warren.

It has grown out of the value system and her "two absolute non-negotiables when it comes to health care: 

  • "No American should ever, ever die or go bankrupt because of health care costs" and 
  • "Every American should be able to see the doctors they need and get their recommended treatments, without having to figure out who is in-network."

And it reflects the policy seriousness and understanding that is Warren's trademark.

She's answered the tax "gotcha" question that every debate moderator and her primary opponents have thrown at her emphatically and comprehensively. Which is good news for future debates.

Maybe less time will be spent on that question and on the multitude of other issues facing the nation that need be addressed.