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Elizabeth Warren releases plan to pay for Medicare For All, says middle class won't pay more

The $52 trillion plan would seek to bring in about $9 trillion over 10 years by diverting funds employers pay to private health plans.

Jeff Lagasse, Associate Editor

Of the Democratic presidential candidates, Senator Elizabeth Warren has been one of the more vocal proponents of a Medicare For All plan, which would achieve universal health coverage by expanding the federal program to encompass all Americans. But that has left questions as to how the government would pay for such a dramatic overhaul.

Today, Warren released her plan for funding Medicare For All, saying that taxes would not be raised for the middle class. This differentiates her plan from rival Senator Bernie Sanders' Medicare For All plan, which Sanders acknowledged would be paid for partly through increases to middle class taxes.

Warren's proposal, outlined on her campaign website, purports to lower medical costs by $11 trillion over 10 years, and lower the total cost of healthcare in the U.S. by about $7 trillion over that same period.

The plan would seek to bring in about $9 trillion over that 10-year window by diverting to the government the funds employers pay to private health plans. Another $11 trillion would be collected through a series of proposal including a county-by-county tax on foreign earnings of 35%, according to CBS News.

In all, the single-payer healthcare plan would cost slightly less than $52 trillion over a decade, including more than $20 trillion in new federal spending. That's slightly less than the estimated $52 trillion in spending that the current system would accumulate over that same timeframe.

Other funding mechanisms for the plan include a new employer Medicare contribution to raise $8.8 trillion, a sum the campaign contends would save companies $200 billion compared to what they would pay under the current system.

Warren's plan also aims to cut administrative costs by scrapping private insurers, negotiate reductions in drug spending, and better enforce existing tax laws.

It also would impose new taxes on what the campaign called "the financial sector, large corporations and the top 1% of individuals," which Warren estimates would raise just under $4 trillion. This is essentially an extension of what has been referred to as Warren's "wealth tax," in which wealth over $1 billion would be taxed at 6% rather than the currently proposed 3%.

While the plan has proven popular among Warren's supporters, it has drawn criticism from groups such as The Partnership for America's Health Care Future.

Lauren Crawfoed Shaver, the organization's executive director, said Friday that "the unaffordable costs of Medicare for All mean working families would have to pay higher taxes. This has been confirmed not only by economists, but by the bill's own author, who acknowledges that its tax hikes would need to hit Americans making as little as $29,000 a year.  And Senator Warren's own plan would slam American workers with nearly $9 trillion in new taxes."

WHAT'S THE IMPACT

Warren's funding proposal seeks to differentiate itself from Sanders' plan, though both plans would accomplish the same result: expand the Medicare program to provide national, universal healthcare coverage and get rid of private health insurance.

It's unclear at this point what effect the details of her Medicare For All plan will have on her rankings in the polls. To date, former Vice President Joe Biden has been considered the front-runner, but a New York Times poll released today shows Warren leading Biden in the crucial early voting state of Iowa.

THE LARGER TREND

Medicare For All has been a contentious issue for Democrats in the early primary debates. Providers are against such a plan, saying reimbursement will be hit, while insurers are in no hurry to see their industry disappear.

Biden is on record as opposing a Medicare For All approach, instead favoring a plan that would strengthen the existing Affordable Care Act and add a public option. Mayor Pete Buttigieg has proposed a Medicare For All plan that is optional, and would retain private insurance.

Whether Medicare For All is optional or mandatory might have a large effect on how voters perceive it, at least based on a HealthPrep Data Service poll released this week. Optional Medicare For All was the most popular policy among respondents to the poll, at 45.4%. Keeping the current private system intact came in second at 33.3%, while a mandatory Medicare for All system garnered the least support at 21.2%.

This suggests that, while there's public support for a shift to some form of universal healthcare, voting age Americans are wary of a complete break from the current system.
 

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com