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| Elizabeth Warren Releases $20.5 Trillion Plan to Pay for ‘Medicare for All’ | |
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| WASHINGTON — Senator Elizabeth Warren on Friday proposed $20.5 trillion in new spending through huge tax increases on businesses and wealthy Americans to pay for “Medicare for all,” laying out details for a landmark government expansion that will pose political risks for her presidential candidacy while also allowing her to say she is not raising taxes on the middle class to pay for her health care plan. | WASHINGTON — Senator Elizabeth Warren on Friday proposed $20.5 trillion in new spending through huge tax increases on businesses and wealthy Americans to pay for “Medicare for all,” laying out details for a landmark government expansion that will pose political risks for her presidential candidacy while also allowing her to say she is not raising taxes on the middle class to pay for her health care plan. |
| Ms. Warren, who has risen steadily in the polls with strong support from liberals excited about her ambitious policy plans, has been under pressure from top rivals like former Vice President Joseph R. Biden Jr. to release details about paying for her biggest plan, “Medicare for all.” Her new proposal marks a turning point for her campaign, in which she will have to sell voters on a tax-and-spending plan that rivals the ambitions of the New Deal and the Great Society while also defending it against both Democratic and Republican criticism. | |
| Under Ms. Warren’s plan, employer-sponsored health insurance — which more than half of Americans now receive — would be eliminated and replaced by free government health coverage for all Americans, a fundamental shift from a market-driven system that has defined health care in the United States for decades but produced vast inequities in quality, service and cost. | Under Ms. Warren’s plan, employer-sponsored health insurance — which more than half of Americans now receive — would be eliminated and replaced by free government health coverage for all Americans, a fundamental shift from a market-driven system that has defined health care in the United States for decades but produced vast inequities in quality, service and cost. |
| Ms. Warren would use a mix of sources to pay for the $20.5 trillion in new spending over a decade, including by requiring employers to pay trillions of dollars to the government, replacing much of what they currently spend to provide health coverage to workers. She would create a tax on financial transactions like stock trades, change how investment gains are taxed for the top 1 percent of households and ramp up her signature wealth tax proposal to be steeper on billionaires. She also wants to cut $800 billion in military spending. | |
| Ms. Warren’s estimate for the cost of Medicare for all relies on an aggressive set of assumptions about how to lower national health care costs while providing comprehensive coverage to all Americans. Like Senator Bernie Sanders of Vermont, she would essentially eliminate medical costs for individuals, including premiums, deductibles and other out-of-pocket expenses. | Ms. Warren’s estimate for the cost of Medicare for all relies on an aggressive set of assumptions about how to lower national health care costs while providing comprehensive coverage to all Americans. Like Senator Bernie Sanders of Vermont, she would essentially eliminate medical costs for individuals, including premiums, deductibles and other out-of-pocket expenses. |
| Critically, her new plan would not raise taxes on middle-class Americans, a question she has been asked over and over but has not answered directly until now. When confronted on the campaign trail and debate stage, she emphasized instead that her plan would result in higher overall costs for wealthy people and big corporations but lower costs for middle-class families. | Critically, her new plan would not raise taxes on middle-class Americans, a question she has been asked over and over but has not answered directly until now. When confronted on the campaign trail and debate stage, she emphasized instead that her plan would result in higher overall costs for wealthy people and big corporations but lower costs for middle-class families. |
| Her lack of specificity became a vulnerability as the primary race heated up, especially because she had established herself as the candidate who had a plan for everything. Democratic rivals like Mr. Biden and Pete Buttigieg, who prefer building on the existing system of health coverage, have pointedly criticized her on the issue, with Mr. Buttigieg calling her “extremely evasive.” Two weeks ago, with no sign that the pressure would relent, she announced she would soon release her own financing plan. | Her lack of specificity became a vulnerability as the primary race heated up, especially because she had established herself as the candidate who had a plan for everything. Democratic rivals like Mr. Biden and Pete Buttigieg, who prefer building on the existing system of health coverage, have pointedly criticized her on the issue, with Mr. Buttigieg calling her “extremely evasive.” Two weeks ago, with no sign that the pressure would relent, she announced she would soon release her own financing plan. |
| “A key step in winning the public debate over Medicare for all will be explaining what this plan costs — and how to pay for it,” Ms. Warren wrote in her plan. To do that, she added, “We don’t need to raise taxes on the middle class by one penny.” | “A key step in winning the public debate over Medicare for all will be explaining what this plan costs — and how to pay for it,” Ms. Warren wrote in her plan. To do that, she added, “We don’t need to raise taxes on the middle class by one penny.” |
| The issue of health care helped Democrats win control of the House in last year’s midterm elections, after unsuccessful attempts by President Trump and Republicans in Congress to repeal the Affordable Care Act. It has been a central issue again this year as Ms. Warren and other Democrats have competed for their party’s presidential nomination, highlighting a divide on policy between the party’s moderates and its liberal wing that favors transformative change. | The issue of health care helped Democrats win control of the House in last year’s midterm elections, after unsuccessful attempts by President Trump and Republicans in Congress to repeal the Affordable Care Act. It has been a central issue again this year as Ms. Warren and other Democrats have competed for their party’s presidential nomination, highlighting a divide on policy between the party’s moderates and its liberal wing that favors transformative change. |
| But in responding to her rivals and more tightly embracing Medicare for all, Ms. Warren is taking a significant political risk. Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total. | But in responding to her rivals and more tightly embracing Medicare for all, Ms. Warren is taking a significant political risk. Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total. |
| Still, the idea of government-run health insurance excites many liberal voters seeking a more equitable health care system. Mr. Sanders, one of Ms. Warren’s top rivals in the Democratic primary race, has long championed single-payer health care, and Ms. Warren has aligned herself with him on the issue. She co-sponsored his Medicare for all legislation in the Senate, and speaking on health care at the first Democratic presidential debate in June, she declared, “I’m with Bernie.” | Still, the idea of government-run health insurance excites many liberal voters seeking a more equitable health care system. Mr. Sanders, one of Ms. Warren’s top rivals in the Democratic primary race, has long championed single-payer health care, and Ms. Warren has aligned herself with him on the issue. She co-sponsored his Medicare for all legislation in the Senate, and speaking on health care at the first Democratic presidential debate in June, she declared, “I’m with Bernie.” |
| Ms. Warren’s proposal shows just how large a reorganization of spending Medicare for all represents. By eliminating private health insurance and bringing every American into a federal system, trillions of dollars of spending by households, employers and state governments would be transferred into the federal budget over the course of a decade. | Ms. Warren’s proposal shows just how large a reorganization of spending Medicare for all represents. By eliminating private health insurance and bringing every American into a federal system, trillions of dollars of spending by households, employers and state governments would be transferred into the federal budget over the course of a decade. |
| Her financing plan is based on cost estimates that are on the low side, relative to those from other serious economists who have assessed the program. Her estimate of $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, but with several different assumptions that lower the cost from Urban’s estimate of $34 trillion over the same period. | Her financing plan is based on cost estimates that are on the low side, relative to those from other serious economists who have assessed the program. Her estimate of $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, but with several different assumptions that lower the cost from Urban’s estimate of $34 trillion over the same period. |
| Ms. Warren attempts to minimize fiscal disruption by asking the big payers in the current system to keep paying for health care through new taxes. She would create a new “employer Medicare contribution” that would effectively redirect what employers are already paying to health insurers, totaling $8.8 trillion over a decade. Small businesses would be exempt if they are not currently paying for their employees’ health care. | |
| Ms. Warren has also proposed that states pay the federal government much of what they currently spend to cover state workers and low-income residents under the Medicaid program. | |
| But she also describes new revenue streams to replace the other big chunk of health spending: the money spent by households on premiums, deductibles and direct payments for services like dental care that are not always covered by insurance. | |
| Ms. Warren would raise $3 trillion in total from two proposals to tax the richest Americans. She has previously said that her wealth tax proposal, another signature of her campaign, would impose a 3 percent annual tax on net worth over $1 billion; she would now raise that to 6 percent. She would also change how investment gains are taxed for the top 1 percent of households. | |
| In addition to imposing a tax on financial transactions, she would also make changes to corporate taxation. She is counting on stronger tax enforcement to bring in $2.3 trillion in taxes that would otherwise go uncollected. And she is banking on passing an overhaul of immigration laws — which itself would be a huge political feat — and gaining revenue from taxes paid by newly legal residents. | |
| Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. She expects that an aggressive negotiation system could lower spending on generic medications by 30 percent compared with what Medicare pays now, for example, and spending on prescription drugs could fall by 70 percent. Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care. | Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. She expects that an aggressive negotiation system could lower spending on generic medications by 30 percent compared with what Medicare pays now, for example, and spending on prescription drugs could fall by 70 percent. Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care. |
| When Mr. Sanders introduced the latest version of his Medicare for all legislation in April, he released a list of options that could help pay for it, including a 4 percent “income-based premium” for employees and a 7.5 percent “income-based premium” for employers, and an increase to the top marginal income tax rate to as high as 70 percent for people making above $10 million. Mr. Sanders has acknowledged that taxes would go up on middle-class families. | When Mr. Sanders introduced the latest version of his Medicare for all legislation in April, he released a list of options that could help pay for it, including a 4 percent “income-based premium” for employees and a 7.5 percent “income-based premium” for employers, and an increase to the top marginal income tax rate to as high as 70 percent for people making above $10 million. Mr. Sanders has acknowledged that taxes would go up on middle-class families. |
| Still, he has not produced a definitive plan for how to pay for Medicare for all, and in a recent interview with CNBC, he declined to do so. “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,” he said. “I don’t think I have to do that right now.” | Still, he has not produced a definitive plan for how to pay for Medicare for all, and in a recent interview with CNBC, he declined to do so. “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,” he said. “I don’t think I have to do that right now.” |