Senator Elizabeth Warren (D-MA) kicked off November by releasing her plan to pay for Medicare for All without raising middle-class taxes. She’s faced increasing pressure from media outlets and fellow presidential candidates to do so after evading the question several times in the last Democratic debate.
How much would it cost?
With the help of several economists and health policy experts, her team estimates the plan will cost around $20.5 trillion over 10 years–a whopping $31.5 trillion less than current single-payer budget projections. These funds will partially come from states redirecting funds from Medicaid, the Children’s Health Insurance Program (CHIP), and public employee premiums, as they would no longer be necessary under universal coverage.
Without billions of dollars in healthcare spending going into the pockets of pharmaceutical and private insurance industry CEOs, the plan also anticipates healthcare costs (including prescription drug costs) going down significantly.
In a Medium post detailing her plan to fund single-payer healthcare, she wrote, “We don’t need to raise taxes on the middle class by one penny to finance Medicare for All.”
Where would the money come from?
- Employer contributions. Instead of sending premiums into the pockets of private insurance companies’ CEOs, her plan would create an “Employer Medicare Contribution,” into which American companies would pay $8.4 trillion over 10 years.
- Tax on the 1%. In addition to the 3% tax she’s proposed on annual incomes exceeding $1 billion, her plan also details another 3% tax on these incomes, as well as an annual tax on capital gains. This would rake in another $3 trillion.
- Transactional levies on stocks and bonds. Warren’s plan also imposes a transactional tax on stocks, bonds, and derivatives, as well as significant changes to existing corporate tax laws, generating another $3.8 trillion.
- Increasing paychecks. Since employees would no longer have their private insurance premiums taken out of their paychecks, their monthly take-home pay would go up significantly. The existing tax on this additional income would contribute another $1.4 trillion.
- Immigration reform. Another point of her plan would reform immigration laws, which would boost taxable income and bring in another $1.2 trillion.
How does it differ from Sanders’s plan?
The Elizabeth Warren Medicare for All plan stands in stark contrast with that of her Medicare for All ally, Senator Bernie Sanders (I-VT), who has said that middle-class taxes would be increased to pay for his version of Medicare for All. However, his plan would still have middle-class workers paying less out of pocket with the elimination of deductibles, copays, and insurance premiums coming out of paychecks. For example, taxes under his plan might increase 5 percent, but healthcare costs in total could drop by about 20 percent, leaving the middle-class with a net positive 15 percent decrease in healthcare spending.
Diverging even further away from Sanders’s plan, Warren’s Medium post also indicated her team would come up with their own plan to transition to the program. “My transition plan will take seriously and address substantively the concerns of unions, individuals with private insurance, hospitals, people who work for private health insurers, and medical professionals who worry about what a new system will mean for them,” she wrote. The post did not state how long the transition would take, indicating it could take longer than the four years Sanders’s plan would take to cover every American.
Striking back at fellow Dem candidates
Her Medium post also challenged “every candidate who opposes my long-term goal of Medicare for All (to) put forward their own plan to cover everyone, without costing the country anything more in health care spending, and while putting $11 trillion back in the pockets of the American people by eliminating premiums and virtually eliminating out-of-pocket costs.”
With Warren sitting at the top of many national polls, even after a very contentious debate in October in which moderators and candidates alike pressed her for this exact plan, she could see an additional increase in support going into the one-year countdown to the 2020 election.