Here’s How Elizabeth Warren Will Pay For Medicare For All (Hint: There Are Taxes Involved)
By Elizabeth Warren
My daddy’s heart attack nearly sent our family skidding over a financial cliff. Today I think about all the kids this year who will face the double blow of nearly losing a parent and then watching their lives turn upside down as their families struggle to pay a growing stack of medical bills.
I spent my career studying why so many hard-working middle class families were going broke. For years, my research partners and I traveled the country from bankruptcy courtroom to
This was a lot to read, so here is a summary I’ve just typed up. I’m leaving out all the “why should we do this” stuff, and just summarized the “how will we pay for it” stuff.
Summary of Warren Document (Highlights Only)
We have two options:
Option 1: current system. $52TR cost over 10 years, of which $11TR paid by consumers as premiums, copays, out of network. 24MM lack coverage, 63MM have substandard coverage.
Option 2: Medicare for All. $52TR cost over 10 years, consumers no longer pay that $11TR. Everyone has full coverage.
How to pay for Medicare for All:
First, health care reforms to reduce cost.
1. Reduce administrative spending from 12% of premiums with current private insurance companies, to 2.3% Medicare spending level. Also reduce administrative (billing) costs for health care providers.
2. Reduce prices by reimbursing health care providers at Medicare rates. Reimbursements will be higher for primary care, lower for some specialties. Overall health care providers will have same reimbursement rate as they do now. Will get paid higher Medicare rates for Medicaid patients and won’t have current billing/claims administrative costs (8.5% to 13% of revenue for providers).
3. More value-based payments (e.g. pay for episode of care, or for outcome), extending Affordable Care Act reforms.
4. Increase competition in health care, through anti-trust enforcement for hospital mergers.
5. Reduce prescription drug costs by 70% for brand name drugs and 30% for generics, targeting average international market price.
6. Bring growth of health care spending in line with GDP.
7. Shift $6TR of existing state and local government healthcare spending to Medicare for All.
After steps 1-7, $20.5TR over ten years of new federal revenue is still required.
Second, new federal revenues.
Redirect most of $9TR over ten years employer health care premiums to Medicare, with $200BN over 10 years reduction in employer spend. Adjustments for small businesses, large companies.
Redirect employee health care premiums to take-home pay. Income tax on that increased pay will generate $1.4TR over ten years.
More tax enforcement to reduce 15% tax gap (between taxes owed and taxes paid), will generate $2.3TR over ten years.
Targeted taxes on corporations. 0.1% tax on securities transactions (will generate $0.8TR over ten years), fee on risks taken by 40 largest banks ($0.1TR), eliminating accelerated depreciation ($1.25TR), 35% tax on foreign earnings ($1.65TR).
Wealth tax on ultra-millionaires – 2% on wealth over $50MM, 6% on wealth over $1BN ($1TR over ten years). Tax unrealized capital gains annually ($2TR over ten years).
Immigration reform ($0.4TR over ten years).
Reduce defense spending ($0.8TR over ten years).
Steps 8-14 raise the remaining $20.5TR over ten years of federal revenues needed to pay for Medicare for All.
H-Man, Maybe I am missing something but the Warren plan does provide a solution for a broken health care system.