Medicare for All

Elizabeth Warren's Fake Plan To Pay for Medicare for All 

She hasn't come up with a plan to pay for single-payer. She's come up with a plan to let her claim she has a plan. 

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To understand how Elizabeth Warren wants to pretend to pay for Medicare for All, consider one small aspect of her recently released plan: her assumption that in moving to a fully government-run health care system, America can reduce future health care spending by about $2 trillion by expanding on some experimental payment programs launched as part of the Affordable Care Act. 

I say this is a "small" component of her plan because it accounts for a relatively modest amount of the total. If the reforms failed to produce any savings, and everything else went as expected, her plan for the government to spend just shy of $52 trillion on American health care over the next decade would become a plan for the government to spend something more like $54 trillion. There was a time when a single solitary trillion dollars was an awful lot of money, even by the expansive, expensive standards of Washington D.C.'s spending class. But today, who would even notice the difference? 

Yet Warren's plan counts on these savings and many others. Her financing math would not fully add up without them. If the savings did not appear, that would thus mean she has raised too little revenue to pay for her plan. The assumption that Obamacare's various bureaucratic payment tricks can be expanded to provide massive nationwide savings is thus revealing about the broader nature of her plan.  

The bulk of Warren's presumed savings in this area—about $1.2 trillion—come from increasing the use of "bundled payments." Bundled payments, in which health care providers are paid as a sort of package deal rather than on a fee-for-service basis, were once a source of great hope for America's health care wonks, the class of people who believe that the best way to reduce health care spending is through technocratic fixes that are often lumped together as delivery system reforms. Some early studies found spending reductions for hospitals that chose to participate, and initial projections by the Congressional Budget Office projected bigger savings down the road.  

Yet as it turned out, there was a problem with those initial studies: They looked at hospitals that had chosen to participate, skewing the sample toward institutions where bundled payments were more likely to be effective. When a team of researchers from Harvard, Cambridge, Dartmouth, the University of Chicago, and the Massachusetts Institute of Technology—the sort of all-star academic lineup that a committed wonk like Warren ought to trust—were able to study data from a randomized sample, they found no significant overall savings, especially after program bonuses were factored in. Similarly, a study published by the fiscally conservative Commonwealth Foundation last year reported that "hospitals participating in Medicare's most recent bundled payment initiative did not have lower costs or other better outcomes compared with hospitals not participating." (Wonks need not fear: Delivery service reforms have not failed, they have just never been truly tried.) 

It is one thing to attempt to spend projected savings, those mythical future funds that could possibly present themselves should everything go exactly according to plan. Warren, however, has gone the extra mile and predicated her plan on savings that the best evidence suggests will never occur at all. She is not counting on spending reductions that might take place given optimistic assumptions. She's counting on savings that simply won't happen, and then raising only enough money to finance the impossibly low cost that remains. 

Now, as I said, this is, relatively speaking, a minor element of her plan—just a trillion dollars or so. Yet this one aspect is illustrative of her entire approach. It's fake savings and fake revenue all the way down. 

She assumes, for example, that health spending will grow at just 3.9 percent over the decade, far slower than the projections from either Medicare's actuaries or the Urban Institute, a left of center think tank. With slower spending growth comes more than $1 trillion in savings she doesn't have to pay for either. 

There are more problems like these on both the savings and the revenue sides of the ledger: Warren's upgraded wealth tax, like the initial version, would almost certainly raise far less than she estimates due to avoidance and capital flight; what's more, her higher rate would exacerbate both phenomena. She also prices administrative costs for the program at just 2.3 percent—less than half of the 6 percent Medicare spends now, and less than a quarter of what private insurance spends. She calls for paying hospitals 110 percent of today's Medicare rates, reducing the cost of her plan by a little more than $4.2 trillion relative to other projections. Yet state-based programs in blue states like Washington and Maryland have ended up paying far higher rates. As Charles Blahaus, a former Medicare trustee, wrote in his analysis of Warren's plan: "Most analysts regard such cuts as unrealistic," which is perhaps the polite way of saying that it is complete balderdash. 

For Warren, however, realism is clearly not the point. She released the plan after months of pressure to explain precisely how she would finance the tens of trillions in new government spending that even the cheapest, most efficient version of a full-fledged single-payer system would require. Like a general insisting on the size of his army by lining up row after row of mannequins and scarecrows, Warren has enlisted a legion of implausible savings mechanisms and unworkable tax hikes in hopes of cobbling together something that looks convincing from afar. 

Her goal was not to figure out how to pay for single-payer, or outline the political challenges and economic tradeoffs that it might entail, but to produce a document sufficiently festooned with technocratic jargon and data points drawn from savings projections that did not pan out all so that she could say she had a plan to finance the program, dismiss her critics, and then change the subject. 

Warren has not come up with a plan to pay for Medicare for All. Instead, she has concocted a $52 trillion package of fanciful assumptions, unworkable reforms, and psuedo-wonky gobbledygook, and figured out how to pay for that.  

 

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  1. A funding scheme that won’t work, for a plan that won’t provide health care.

    I don’t know why you guys don’t like her.

    1. On the other hand, both the plan and its imaginary funding will produce a federal government with the actual power of life and death over every subject. And that is the objective, after all.

      1. And bankrupt them that aren’t liquidated.

    2. might suffice as terrifying nanny.

  2. For a university professor, she’s pretty dumb.

    It doesn’t matter. Her supporters don’t care about the numbers, they just want freebies that someone else pays for. They want the illusion of caring. Mathematical reality has no business intruding upon the ballot box.

    When she says she will give up Medicare for all and the wealthy will pay for it, imagine Trump saying he will give us a wall and Mexico will pay for it. Same thing. The true believers don’t let facts get in the way of their faith.

    1. What’s “numbers”?

    2. Dumb? She’s a successful politician and in a pretty good position to gain the presidency. How can she be dumb? Her voters on the other hand….

      1. “Democracy is a pathetic belief in the collective wisdom of individual ignorance.” -H.L. Mencken (1880-1956)

        These United States of America were created as a democratic republic not as the republic democracy into which it has devolved. There is a difference between the two. Democracy always destroys itself as this nation on fire now is doing.

        “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” -John Adams (1725-1826)

        Can we alter course? Yes. How? You’ll find the answer in the call-to-action novel, Retribution Fever.

    3. “For a university professor, she’s pretty dumb.”

      You must not know a lot of academics

  3. Easy to fund
    1: sneek into clingers houses steal their underwere
    2: step 2
    3: funding Warren’s plan

    1. the best part about this comment is that even if you didn’t have a typo in (1) it still would be the wrong spelling. dumbass

    2. Oh please. The real Rev. Kirkland would never write ten or more words without two of them being “culture war.”

      I tell ya. This comment section has a real problem with parody accounts.

      1. With the Rev. Kirkland, it’s not the account that’s a parody.

  4. I wasn’t convinced that Trump is the lesser of two evils when it came to horrible Hillary. Hillary was not an ideological crusader and would not have made any drastic changes. Warren is, and that makes her scary. If it comes down to Trump and Lizzy, I won’t vote for either, of course, but I will root for the Orange Id-iot.

    1. Yeah, I think in the long run Hillary’s loss will prove dangerous.

    2. Ah yes, the eternal debate. Would you rather be ruled by someone who is upstanding, but incompetent or someone who is competent, but corrupt.

      1. Hillary is both corrupt and incompetent. Everything she touches ends up covering herself in shit.

  5. her assumption that … America can reduce future health care spending by about $2 trillion by expanding on some experimental payment programs

    “Oh, ‘programs’! Whew, I thought you said *pogroms*!”

    1. They did. “programs” was a typo.

  6. OK, so Warren’s healthcare plan might require more spending than we Koch / Reason libertarians would prefer. But remember the fundamental, non-negotiable principle of our philosophy — open borders. Which Warren is clearly more likely to implement than Orange Hitler.

    I’m willing to accept higher taxes and tens of trillions in new spending as long as it comes with unlimited, unrestricted immigration.

    #ImmigrationAboveAll
    #VoteDemocratForOpenBorders

    1. Does Koch have an extra 52 Trillion in his pocket?

      I know a 1/1024 American Indian that’s interested.

    2. You’re gonna need open borders if Mrs. Mann is elected.

  7. I’ve not forgotten that even if Warren’s numbers ever add up (and I think the chances of that fall between zero and zip point shit) there’s still all of her other plans that have to be paid for: Gangrene New Deal, “free” college for all, who knows what else.

  8. How many times has the “take a snapshot of the economy, figure out how much tax is needed to back into the funding projection and move forward” way of budgeting screwed us? Will anyone ask her how nationalizing 20% of the economy will affect her revenue projections? What is her plan when the money does not materialize in year 5?

    1. What is her plan when the money does not materialize in year 5?

      Same as it always is: Deficit spending and blame the rich for not paying their “fair share”

      1. You forgot about blaming corporations and their CEOs for being too greedy.

        1. And you forgot to paint them as fat cats bellying up to a bar of Fancy Feast

    2. It’s really amazing that these “static analyses” are taken to mean anything at all for an intervention anywhere near this scale. Sure, an individual or small firm making different choices probably won’t affect the national economy. But this? LOL

  9. Peter is suffering from Warren Derangement Syndrome. One must take this accomplished woman at her word. She’s a Harvard professor and a member of the indigenous peoples. What better credentials could one have?

    Throwing simplistic arithmetic arguments at this scholarly woman is misogynistic and racist.

  10. Whether you like Warren or not, or like her numbers or not, she is now farther down the road toward being forthright than any competing advocate, including advocates of the status quo. Let’s hear the ten-year cost projections for status quo healthcare spending, including government, employers, subscribers, and insurance overhead. Let’s get ten year projections from government option fans. Time to lay off Warren until the others catch up.

    1. By just making shit up? You must love how trump operates, then

    2. Time to lay off Warren

      It’s certainly not time to lay ON Warren, so I guess you have a point.

    3. “Whether you like Warren or not, or like her numbers or not, she is now farther down the road toward being forthright than any competing advocate, including advocates of the status quo.”

      Translation for those, unlike Lathrop, who have brains:
      “It’s fucked up, but it’s my team!”
      Fuck off, Lathrop.

    4. I don’t like Warren, but you’re right – our current mess of a system will likely spend about the same amount. Warren’s plan will get us much closer to universal coverage, but will certainly reduce the quality of care – especially for those now enjoying good health insurance coverage with access to the doctors of their choice, often without having to wait months to see specialists. Perhaps that’s what Warren really wants – a more “fair” system that provides average to worse than average health care to all citizens.

      It’s also true that the GOP isn’t really pushing any compelling health insurance reform proposal, while our current system slowly crumbles.

      1. “It’s also true that the GOP isn’t really pushing any compelling health insurance reform proposal, while our current system slowly crumbles.”

        A major Democrat-only bill passed a few years ago fucked shit up beyond repair. Why should the GOP fix it?

        1. Well, the GOP could certainly continue to do nothing – except allow more sales of less comprehensive health insurance plans (which I think are fine, as long as the buyers are properly informed). Meanwhile, as the GOP does nothing, our system slowly crumbles: Medicare is running out of money, employer-provided coverage is getting more and more expensive (while raising employee costs and increasing deductibles at the same time), and the individual health insurance market struggles to adapt to uncertainties from whether or not Obamacare will survive (with tax payer support), or if it fades away (which is unlikely, because the GOP knows that people with pre-existing conditions generally want to keep the policies they couldn’t get before the ACA). If the GOP wants to keep ignoring the need for effective health insurance reform that will help many of their constituents along with perhaps being better for our country overall, then that’s their choice. Voters will make their choices too. I don’t like Warren’s plans and I don’t think she’ll be elected in 2020, but if the GOP doesn’t get its act together in the next few years, the Democrats will prevail eventually and drastically change our health care financing system.

  11. As long as she’s campaigning to take my health insurance and healthcare away in exchange for some vague promise about a government run plan, I’ll never, ever, ever vote for Warren.

    I suspect a lot of Americans feel the same way I do.

    1. It doesn’t really matter whether or not she knows how to pay for it, who pays for it and whether its a sound plan. She wants to take my plan away. She wants to take my doctor away. When your pitch is “I’m here to take your health insurance away” the follow up of “but I’ll replace it with a better one” is totally unheard. I don’t give a shit.

      1. But you can keep your doctor.

  12. Liz pieces lead to Cylons every time … “and She has a Plan.”

  13. The problem is the third party payed system.

    I just had a vasectomy. Impossible to get a price beforehand. The charge was $1200 for maybe twenty minutes. Who knows what I will pay after the insurance company finishes negotiating.

    Name one product or service, other than medicine, where you literally can’t get even an estimate before having work done?

    No wonder these guys have more boats than I have toothbrushes.

  14. Very simple analysis. Socialized medicine is an elaborate system of price controls, coverage rules, and health care priorities. Health insurance does not equal health care. Binding price controls always induce shortages and shirking behavior. Health care providers and organizations will game the system and reduce services. Health care priorities induce rationing and waiting. Since a large part of the population uses little health care, waiting will forced onto a small part of the population (many seniors). Every country with socialized medicine has secondary insurance to cover the inadequacies of the socialized system. The USA experience will be far worse because health care providers and organizations will form cartels to combat price controls. USA patients will not tolerate waiting and reduced services at least at first. Seniors better beware that their health care services will be sharply rationed.

    1. Exactly!

      Unfortunately which payment (private vs public) scheme is better is like rearranging the chairs on the Titanic. Those who think there are free markets in our healthcare system are DELUSIONAL.

      Had to pay out of pocket for some medical service and there is NO PRICE TRANSPARENCY WHATSOEVER. Just FORGET about price shopping over the phone since few doctors will give it. After investing in four appointments and paying fees, I got four price quotes after great effort. In Germany i hear that all prices for procedures ARE POSTED PER LAW. Good luck getting such a law here passes with the physician lobby.

      And the larger issue is the tight control of physicians where many who want to perform these services are not allowed. Milton Friedman said we should get rid of licensing of physicians. Despite many Americans competing with cheap foreign workers, there is little completion in medical services they consume unless you travel overseas. Also medication monopolies and cross- deals in big pharma reduce the free market for medicines.

      It’s really the EXORBITANT PRICES from lack of competition that’s the real issue. EITHER the field is radically DEREGULATED (not saying this is the best option) OR regulations are created to COUNTERACT the power of the medical monopolies that are driving the health care system to unaffordability.

      1. You are right, our system has muted the benefits of free market forces for decades, due in large part to employer provided health insurance. Of course, Medicare – a single payer hybrid, complicates things too. I am a strong believer in the benefits of free markets, but regulations and the rule of law are important. The health insurance (not to be confused with health care) industry falls short when it comes to free markets because the insurance companies really don’t want to have unprofitable customers. Before the ACA, the individual health insurance market was tough for anybody without a perfect medical history. It wasn’t just type 1 diabetics or cancer patients that were getting turned down. Regulations forced employer provided plans to cover all eligible employees – but I am certain that for a large segment of that population age 50 to 64, those individuals would have been declined or severely surcharged on the individual insurance market (pre-ACA). Switzerland has an individual mandate for a basic plan – and insurance companies accept all citizen applicants, and price their basic plans (by law) only to cover overhead. (They make their profits from the optional supplemental plans.) I know we’re not Switzerland, but my point is that health insurance must be regulated, for the benefit of society overall. Switzerland has a unique balance of consumer skin in the game, free market forces, doctors in private practice, and very high quality care. It’s expensive too – but not as expensive per capita at the USA.

  15. Jeebus, can you imagine being married to this battle-axe? What part of “just leave me the fuck alone” do you not understand?

  16. A vote for gay marriage is a vote for medicare for all.

  17. Her plan is a ruse. You can’t give free health care to tens of millions of people who have no means to pay for it without sticking it to everyone else. Just like the ACA. But if we’re so dumb that we already forgot how well that cluster worked out then we deserve it and her.

  18. Your way of putting things together is admirable. Pro Carpet Cleaning Waterford Lakes

  19. How does she plan to counter the moral hazard that is going to accompany no-copays, no deductibles, nor any disincentive whatsoever toward using services every time I, or any of my 12 spawns, get a hangnail? I mean, I can’t imagine that clogging up the system, consuming resources, or increasing expenses at all.

    Can you?

    1. If you have money left, she’ll tax you.

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