WASHINGTON/NEW YORK (Reuters) – U.S. Senator Elizabeth Warren said on Friday the Medicare for All system she backs would cost the U.S. government an extra $20.5 trillion over 10 years but would not “require raising taxes one penny” on the middle class.
FILE PHOTO: Democratic 2020 U.S. presidential candidate and U.S. Senator Elizabeth Warren (D-MA) speaks at a campaign town hall meeting at the University of New Hampshire in Durham, New Hampshire, U.S., October 30, 2019. REUTERS/Brian Snyder/File Photo
Instead, she said, it would save American households $11 trillion in current out-of-pocket spending.
“Health care is a human right, and we need a system that reflects our values,” the Democratic presidential contender wrote in a 20-page essay outlining her plan that will be published on the website Medium. “That system is Medicare for All.”
Warren said she would finance the plan largely through businesses and the wealthy. Employers would essentially convert the money they currently spend on workers’ healthcare into Medicare contributions, while billionaires, high-earning investors and corporations would see taxes go up.
The plan would replace private insurance, including employer-sponsored plans, with full Medicare coverage, and individuals would no longer have to pay premiums, deductibles, co-pays or similar out-of-pocket costs. Long-term care would also be covered.
An online calculator launched by Warren’s campaign on Friday showed that an average family of four with employer-provided insurance would save $12,378 per year under her Medicare for All proposal.
Warren, a senator from Massachusetts, is one of 18 Democrats vying for the party’s nomination to take on Republican President Donald Trump in the November 2020 election. She is currently near the top of the pack in opinion polls, having closed in on former Vice President Joe Biden, the early front-runner.
Warren, a former law professor, has become known for a bevy of detailed policy proposals, prompting the slogan, “She’s got a plan for that.”
But she had faced criticism from some Democratic rivals for not outlining precisely how she would pay for a Medicare for All plan she backs in the U.S. Senate that was introduced by fellow White House rival Bernie Sanders of Vermont.
Warren acknowledged that 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”, and said health insurance and drug companies would push back to protect their profits.
“Serious candidates for president should speak plainly about these issues and set out their plans for cost control – especially those who are skeptical of Medicare for All.”
More moderate 2020 candidates such as Biden and South Bend, Indiana, Mayor Pete Buttigieg have said Medicare for All would be too expensive. They favor a more incremental approach.
Sanders has said taxes would need to be raised to finance his Medicare for All system, though he has not released a definitive plan on how to do so. The differences between the candidates have led to clashes in recent presidential debates.
Medicare is currently the U.S. government’s health insurance plan for individuals 65 years and older. Medicare for All would extend the program to cover all Americans, including at least 24 million who are currently uninsured, eliminating the need for private health insurance.
Warren said that with her Medicare for All plan in place, projected total healthcare costs in the United States over 10 years would be just under $52 trillion – slightly less than maintaining the current system.
Medicare for All would require approval by the U.S. Congress, where Democrats currently control the House of Representatives and Republicans the Senate. Passing the law would be difficult, even if Democrats control both chambers, given the opposition from some moderate members of the party.
After accounting for savings through administrative changes, capping prescription drug prices and other measures, Warren said the experts she consulted estimated Medicare for All would cost the U.S. government $20.5 trillion in new spending over a decade.
Of that, $8.8 trillion would come from a new “Employer Medicare Contribution,” replacing the $9 trillion employers are expected to spend between 2020 and 2029 on employee healthcare costs, according to MIT professor Simon Johnson, a former chief economist at the International Monetary Fund; University of Michigan economist Betsey Stevenson; and Mark Zandi, an economist at Moody’s Analytics.
Another $1.4 trillion would be generated from already existing payroll taxes on the additional take-home pay that workers would have when no longer paying for health insurance premiums or health savings accounts, the experts said.
A new tax on financial firms would generate $900 billion and a new tax on large corporations would generate $2.9 trillion. The top 1% of individuals would pay a new wealth tax generating $3 trillion. Altogether, these new taxes on big business and the wealthy would generate $6.8 trillion, they said.
Improvements in tax enforcement, immigration reform that would result in more individuals paying taxes and an $800 billion cut to a Pentagon “war fund” that has been the subject of bipartisan criticism would make up the remainder, according to the economists.
Reporting by Amanda Becker and Joseph Ax; Editing by Mark Heinrich and Jonathan Oatis