Five things to know about Warren's 'Medicare for All' funding plan

Sen. Elizabeth WarrenElizabeth Ann WarrenFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE (D-Mass.) on Friday unveiled her long-awaited plan for funding “Medicare for All,” as she seeks to ease concerns about middle class taxes.

Her proposal outlined cost estimates for providing universal health care and how she plans to raise taxes on employers, corporations and the wealthy to finance a policy that’s become a defining aspect of her White House bid.

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As a front-runner in the crowded field of Democratic candidates, Warren’s health care plan quickly became a major topic of debate earlier in the 2020 race. The funding plan she released Friday is sure to add to that debate.

Here are five things to know about how Warren’s plan to fund Medicare for All.

 

Skepticism about effect on middle class taxes

Warren said her plan would be paid for without increasing taxes on the middle class, but not everyone agrees with her assertion.

Former Vice President Joe BidenJoe BidenFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE, a fellow front-runner in the field of Democratic candidates, singled out Warren’s proposed “employer Medicare contribution,” estimated to raise nearly $9 trillion, as a tax increase on the middle class.

“For months, Elizabeth Warren has refused to say if her health care plan would raise taxes on the middle class, and now we know why: because it does,” Biden deputy campaign manager Kate Bedingfield said Friday.

Warren responded to those criticisms by saying that “if Joe Biden doesn’t like that, I’m just not sure where he’s going,” adding that she’s building on ObamaCare.

Some tax experts, particularly on the right, agree with Biden’s critique.

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They argue the employer contribution is a “head tax” that would ultimately fall on workers’ shoulders. They also said Warren’s proposed increases in corporate taxes and her plan for a tax on financial trades could hit the middle class to some extent.

But other tax policy analysts, particularly on the left, said it appears Warren’s claim about not raising middle-class taxes is true.

They argued that the status quo would remain for employees, and employees could gain, under the employer-contribution proposal because employees are shifting from making payments to private insurers to making slightly smaller payments to the federal government to fund Medicare for All.

The analysts also argued the corporate tax changes and financial transaction tax would overwhelmingly be borne by the wealthy.

 

$20.5 trillion in new federal spending

Warren’s plan would cost just under $52 trillion over 10 years, including $20.5 trillion in new federal spending.

An Urban Institute estimate released last month showed a single-payer plan like Medicare for All would need an additional $34 trillion in new federal money over a decade.

John Holahan, a co-author of the study, said the assumptions Warren made in her spending estimate are “possible” but are “more aggressive” than the assumptions made by the Urban Institute.

Sen. Bernie SandersBernie SandersFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE (I-Vt.), the original author of Medicare for All legislation, has estimated his plan would cost $30 trillion.

Warren’s opponents are likely to cite those discrepancies in arguing her plan is not feasible.

“Warren’s new numbers are simply not believable, and have been contradicted by experts,” said fellow White House hopeful Sen. Michael BennetMichael Farrand Bennet2020 primary debate guide: Everything you need to know ahead of the November forum Fox News anchor apologizes for saying Booker dropped out of 2020 race Klobuchar unveils plan to secure elections as president MORE (D-Colo.). “Regardless of whether it’s $21 trillion or $31 trillion, this isn’t going to happen, and the American people need health care."

 

More details than her rivals

Warren’s health plan provides more details than her rivals. She released a 28-page economic analysis on top of her plan for taxes and spending.

Sanders, by contrast, has declined to spell out all the details of how he would pay for his plan.

“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,” Sanders told CNBC earlier this week. “I don’t think I have to do that right now.”

While Biden attacked Warren on Friday for some of the details in her proposal, he has also attacked Sanders for not providing details.

Biden and other moderates candidates like South Bend, Ind., Mayor Pete ButtigiegPeter (Pete) Paul ButtigiegFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Gabbard, Buttigieg battle over use of military in Mexico MORE have much smaller price tags on their plans, which unlike Medicare for All would make government-run insurance optional.

Buttigieg told NBC last month he would pay for the $1.5 trillion cost of his plan largely by repealing GOP tax cuts for corporations.

 

Ammo for Medicare for All opponents

A key component of Warren’s plan relies on cost savings by essentially eliminating the private insurance industry and cutting payments to hospitals, doctors and drug companies.

That is certain to generate significant blowback from special interest groups that already oppose Medicare for All and have spent millions of dollars this year campaigning against it, largely because it poses an existential threat to their businesses.

“What I think Warren is doing differently is putting out there front and center that we already have the most expensive health care system in the world. Doctors already make much more here than they would anywhere else,” said Karen Pollitz, senior fellow at the Kaiser Family Foundation.

Under Warren’s plan, providers would be paid at current Medicare rates, which are lower than what private insurance pays. It also would increase payments for primary care doctors while slashing rates for what she called “overpaid specialties,” like radiologists and orthopedic surgeons.

Hospitals would be reimbursed 10 percent more than current Medicare rates, which would still be a cut compared to what private insurance typically pays.

“If we expect the American people to be able to afford health care, we need to rein in these costs,” Warren wrote in her plan.

She estimated her proposal would lead to 30 percent savings on generic prescription drugs compared to what Medicare pays now.

Opposition from the health care industry would prove challenging amid any effort to overhaul of the health care system like Medicare for All would. Support from hospitals and doctors was crucial in passing the 2010 Affordable Care Act, and lobbying by the insurance industry at the time ensured a public option didn’t make it into the final bill.

 

Challenging to enact

If Warren is elected president in 2020, she is likely to face congressional obstacles in passing Medicare for All.

GOP lawmakers are almost certain to oppose any Democratic president’s health plan, especially if it’s Medicare for All. In order for Warren to have a chance at pushing through her proposal, Democrats would need to keep their House majority and win control of the Senate, where Republicans hold a 53-47 majority.

Additionally, not every Democrat backs Medicare for All. Notably, Speaker Nancy PelosiNancy PelosiKlobuchar shuts down idea a woman can't beat Trump: 'Pelosi does it every day' Budowsky: Trump destroying GOP in 2018, '19, '20 On The Money: Senate scraps plan to force second shutdown vote | Trump tax breaks for low-income neighborhoods draw scrutiny | McConnell rips House Dems for holding up trade deal MORE (D-Calif.) on Friday told Bloomberg News that she’s “not a big fan” of it.

A New York Times/Siena College poll of likely Iowa Democratic caucus participants, conducted late last month, found more support for the creation of a government health plan that anyone can purchase than for a single-payer system.

Some of Warren’s proposed financing for Medicare for All could also be difficult to enact. For example, she calls for raising revenue through immigration reform — an area where Congress has long struggled to pass comprehensive legislation.

Aspects of her proposals to raise taxes on the wealthy and corporations would likely face GOP resistance, though there is a growing appetite among Democrats to raise taxes in those areas.

Mark Zandi, one of the economists who provided Warren with revenue estimates of her proposed pay-fors in Medicare for All, said that if Warren is president and there’s a Democratic Congress, lawmakers might not pass her exact health plan, but they could pass something that’s in line with what Warren is proposing.

By releasing her proposal, Zandi said, Warren is letting everyone know “this is the direction I want to take.”