Medicare for All

Elizabeth Warren Doesn't Really Have a Plan to Pay for Medicare for All

The presidential candidate wanted a proposal that was airtight and easy to explain. Her plan is neither.

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Late last month, as Sen. Elizabeth Warren (D–Mass.) was under increasing pressure to explain how she would pay for Medicare for All, the single-payer health care system she supports, The Washington Post reported that the presidential hopeful was working with liberal economists to put together a financing plan. 

This was a challenge, the piece noted, partly because the plan would require so much additional government spending, and partly because Warren herself had committed to not financing the program via middle-class taxes, as most countries with national health care systems have done. 

More broadly, Warren wanted a plan that was simple and straightforward. As one anonymous outside advisor told the Post, "They want to figure out—with one go—how to stop the 'How are you going to pay for it?' question…She wants something airtight but easy to understand."

In the end, her plan turned out to be neither. Her proposal is, on the one hand, unwieldy and complex, a lengthy list of provisions that are difficult to capture in a few sentences. And, in part because of its complexity, it is also far from airtight. The plan is full of dubious assumptions about the cost-savings that could be achieved under a single-payer system and the revenue that could be raised by the taxes and fees she would impose. It is not really a plan at all. 

That is the essential point that Avik Roy, president of the Foundation for Research on Equal Opportunity, drives home in a new analysis of the fiscal effects of Warren's financing plan. Roy's analysis assumes that all of the policies Warren calls for—even those that are quite politically unlikely, such as the passage of comprehensive immigration reform—actually go into effect. 

Roy concludes that Warren's plan would raise far less money than assumed, and would cost far more. Broadly speaking, Warren's plan doesn't account for the likely economic ripple effects it would almost certainly cause; instead, she assumes that even with an array of new taxes and fees on businesses and wealthy individuals, economic growth would continue without change. Corporate tax rates would go from 21 percent to 35 percent, which, as Roy notes, "would have a meaningful effect on employment and economic growth, especially in the manufacturing sector and other capital-intensive industries." This allows her to claim far more tax revenue than is realistic.

In addition, Warren assumes that by moving nearly all of America's health care financing to the federal government, administrative costs—the overhead that supports the actual delivery of care—can be cut down to levels that few independent experts believe possible. 

For example, Roy points out, rooting out waste, fraud, and abuse is an administrative cost; currently, about 10 percent of Medicare spending falls into one of these categories. With radically reduced administrative spending, that figure would likely be far higher than Warren estimates, leading to about $3 trillion in additional spending over a decade. 

All together, Roy estimates that far from fully financing Medicare for All, Warren's plan would end up increasing deficits by about $15 trillion over a decade. 

Roy is a former Republican health policy adviser who has often been skeptical of large-scale liberal health plans. But what's notable about his estimate is how close it is to a similar figure put forth by Emory University health policy scholar Kenneth Thorpe, who has at times been supportive of single-payer health care plans. Although some of the particular underlying assumptions differ, Thorpe estimates that Warren's plan comes up about $14 trillion short. 

Like Roy, Thorpe takes issue with Warren's savings estimates. Quoted in a new essay by Philip Klein of The Washington Examiner, Thorpe calls her administrative savings numbers "unrealistically low," and is particularly harsh on her estimates for prescription drug savings: 

The Warren campaign claims that through more aggressive negotiation and threats to rescind patent and licensing protections, it could cut the price that Medicare pays by 70% for brand-name prescription drugs and by 30% for generics, saving $1.7 trillion relative to the Urban Institute forecast. But Emory's Thorpe says such targets are "not even close" to realistic. "It would be the end of any type of research and development and innovation in this country," Thorpe says. "Nobody would invest in the pharmaceutical industry at those numbers."

Klein went through the various points of Warren's plan, and throughout the process, Klein writes, Thorpe kept repeating some variation on the phrase: "That doesn't make any sense." 

The point, I suspect, isn't to make sense, or to add up in any conventional sense. The point is to divert the discussion into technical analysis that many people will tune out, and wave away critics who point out that her assumptions are hokum. 

And you don't necessarily need to dig into the finer points of health care economics to see how flimsy her proposal is. Just look at how Warren herself is describing it. Her Medicare for All plan includes a 6 percent wealth tax on billionaires, up from the 2 percent-plus-surtax rate she proposed earlier this year. (The 2 percent rate would continue to apply to those with smaller fortunes.) Yet she has continued to describe it as a two-cent tax on billionaires. 

Warren is apparently so unconcerned with the details that she isn't bothering to get the basics right herself. In some ways, then, you can set aside the wonky arguments about growth rates and revenue expectations and implausible reductions to health care spending. All you really need to know is that even Warren isn't taking her plan seriously. 

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  1. Can we start calling it Medicaid for all?

    1. VA healthcare for all.

        1. I know you are a troll, but in all honesty, central planning never works better than decentralized, voluntary planning. So there is no reason to expect resource allocation to be more efficient with an even-more government controlled “solution.”

          1. I’m not a troll. I’ve relied on VA health care before, and would not wish it on anyone. Whenever Bernie Bros (or Warren Bros now, I suppose) point to VA healthcare as some great success, I shudder.

      1. From the point of view of the healthcare industry the VA model would be better. Government jobs are a good deal. Steady paycheck, great benefits, pension, government coverage for liability. No headaches. Most providers just want to practice medicine with a decent income.

        What she is proposing is much worse. You need to keep your headaches. As the sole provider we will determine what is paid which means we control what you can or cannot do medically. You have no other options. We will also drown you in more regulation.

        If all she was proposing is expanding Medicaid it would be a golf clap. This is much worse.

    2. We can call it [WE] pick ALL (Everyone’s) health for them.

  2. The Warren campaign claims that through more aggressive negotiation and threats to rescind patent and licensing protections, it could cut the price that Medicare pays

    And with despotic mandates and actual executions, it could eliminate payments entirely!

    1. And watch the rate of advancements in medical care drop to zero.

      1. *Less than zero

      2. We all can’t afford to live to 100, so perhaps we have enough medical advancements for now.

  3. The government health care that we have in this country does not work…end stop. Not VA. Not Medicare. Not Medicaid. Single-payer will only NOT work, it will more than double-down on all the horrible aspects of the 3 aforementioned plans, while not improving anything. There are many, many ways we can improve health care in this country, but these infantile morons on the left are not even willing to discuss those because this has never been about healthcare, but about control.

    1. Damn Billy B, we actually a-gree!

    2. Apparently just letting the market decide rates without necessitating insurance is just too damn complicated for politicians.

      1. not enough graft opportunities

      2. Yeah, don’t get the whole “We have to have a MASSIVE overhaul”.

        Why not try something small and seeing how it works? Require pricing on medical procedures. Allow insurance policies to cross state lines.

        1. What’s absolutely nuts is that you are mandated to have health care insurance now, but that insurance doesn’t cross state lines. What happens if my lifestyle doesn’t fit nicely into this legislative template? I spent 4 months in one year in another state on an extended work project. What if I or my family had had a medical condition that required frequent doctor visits or prescription re fills? We would have paid out the ass, is what.

  4. Someone ask her what happens if as President the Dems never control both houses of Congress.

    1. The Mitt Romneys and Susan Collins of the GOP will be there to help her.

  5. When a single human being has the temerity to suggest she has the knowledge and wherewithal to re-work one of the most complex economies in the world, that right there should scare you away.

    1. I love that she isn’t even putting into the equation her OTHER major promise…that she’d cover ILLEGALS as well.

      1. The more interesting thing is that in the details of the plan she’s ginned up, legal immigration would be drastically reduced. As well as assuming that illegal immigrants would be reduced to an unreasonably low number and thus would consume hardly any health resources. Although if she were actually president, I suppose she’d probably nuke our economy badly enough to encourage them to go home.

    2. “The major problem—one of the major problems, for there are several—one of the many major problems with governing people is that of whom you get to do it; or rather of who manages to get people to let them do it to them.
      To summarize: it is a well-known fact that those people who must want to rule people are, ipso facto, those least suited to do it.
      To summarize the summary: anyone who is capable of getting themselves made President should on no account be allowed to do the job.”

      ― Douglas Adams, The Restaurant at the End of the Universe

        1. what was the question?

          1. “What do you get when you multiply six by nine?”

            1. Sixty-nine hehehehehehe

    3. I believe the word you were looking for was hubris, not temerity.

      1. They’re both good words. Temerity is traditional in this phrase, but hubris describes it well.

  6. “The point is to divert the discussion into technical analysis that many people will tune out, and wave away critics who point out that her assumptions are hokum.”

    AKA “I did the homework, (W)e can do it without raising taxes one penny on middle-class families.”

    1. “Just give me the power, and I’ll figure out how to do it.”

      1. “Suckers”

    2. AKA “I did the homework, (W)e can do it without raising taxes one penny on middle-class families.”

      “What’s that? You want me to show my work? SEXIST! BIGOT!”

      1. Look, we all know math is used for oppression, okay? Just ask Seattle.

  7. Elizabeth Warren Doesn’t Really Have a Plan to Pay for Medicare for All

    And that’s irrelevant to the people who will vote for her.

    1. And that’s irrelevant to the people who will vote for her.

      Apparently, also irrelevant to people who plan to vote against her. They aren’t asking anyone to price out competing plans, or to price out the status quo, either.

      Warren has a lot of opponents who decided to hate her before they got the slightest idea who she is. Plenty of those commenting here.

      1. I got a pretty good idea of who she is, and on no accounts want her to have power over my life. To be fair, that’s true of every politician I can think of. But if I had to choose, she’d be picked close to last.

      2. Here’s a hint Stephen… they don’t need a competing plan. Stop setting the parameters of the argument. It makes you look stupid.

  8. We can raise the money by taxing clingers at a 90% rate on all assets, not limited only to income. And if the try to evade taxes by leaving the great society that Warren creates, we can hold them indefinatly and force them to keep creating wealth at the same rate. This isn’t theft or slavery its is only helping everyone realize that their woke betters are the only ones who should have money, because we know what’s best.

    1. Sure, after all, this is why whips and handguns were invented.

    2. I know you intended that as a parody but someone already ran those numbers. Okay, not actually for 90% – they assumed she would tax at 100% of assets. Turns out that even at that level, you can’t pay for the whole thing. Taxing the “clingers” at 100% of assets would pay for less than 8 months of one year’s costs.

      Taxing at the rate in her website’s online calculator will cover a mere 12 days’ of costs.

      1. Rossami, a remarkable assertion from someone reasoning without any baseline comparison at all.

        1. That comment was incoherent even by your standards, Stephen.

          In case there’s anyone else reading that wants to follow the basic math;
          – Warren says her plan will cost $52 trillion over 10 years. (That’s almost certainly low but we can assume it for the sake of argument.) That’s $5.2 trillion per year.
          – She says she will pay for her plan by taxing only billionaires.
          – There are about 2000 billionaires in the US with a total net worth of $2.9 trillion.
          – $5.2 trillion is greater than $2.9 trillion. Expression of the ratio as the fraction of a year is left as an exercise for the reader.

    3. Wow, at first I really thought you were the original.

      1. I fell for it once. Almost twice.

    4. I like you much better than that Kirkland character…. 🙂

      1. Less bitter.

    5. So have you moved from noxious troll, here only to incite and disrupt in typical troll fashion, to parody?

      Or has someone stolen your handle?

      I choose door number two.

      1. Check the spelling of the handle.

        1. Well damn my eyes, I fell for it.

    6. “And if the try to evade taxes by leaving the great society that Warren creates, we can hold them indefinitely and force them to keep creating wealth at the same rate.”

      Maybe with a wall of some sort.

      1. Directive 10-289.

    7. cling on, carriers?

    8. You’re going too far. Don’t overplay your hand and people will keep thinking this is the original idiot Kirkland.

      1. Meh. Kirkland is a parody too. Probably working for trump/2020.

  9. I’ve said it before and I’ll say it again: Politicians are like astrologers. They like all the trappings of the profession they seek to emulate, they have a false impression of how that profession actually works, and they are way too lazy and impatient to do the actual work and the drudgery it entails.

    Astrologers want to emulate engineers and scientists, with their books full of formulae and tables and charts and graphs, and the computer programs and phone apps they get to plug data into and get answers from.

    Politicians want to emulate businessmen, who bark orders and shout at underlings and make important decisions beyond the capability of mere mortals. “Get me the Jones report!” “Tell him my next offer will be $5M less”.

    1. Businessmen in a magical business where failure entitles you to a bigger budget.

      1. Businessmen as portrayed by Hollywood.

  10. This is fun- Republicans have no plan to lower the deficit. Your turn again.

    1. And this relates to Warren how?

      1. Because shut up

      2. Ehhh, forced labor camps under the green new deal will provide new taxpayers.

    2. The Heffalump plan is to raise it more slowly.

    3. wearingit
      November.12.2019 at 2:46 pm
      “This is fun- Republicans have no plan to lower the deficit. Your turn again.”‘

      You’re right, it is fun:
      wearingit makes an ass of himself once again.
      Your turn; please do it again.

      1. Well he probably thinks Obama lowered the deficits without knowing both houses of Congress was controlled by Republicans at the time.

        1. Most of the deficit lowered by Obama was from counting payins to various programs and pushing the outlays outwards. For example TARP, the outlays went out in 09 and 10, the payins went in 11-13. Obama’s deficit reduction is largely tied to the payins to the deficit neutral program. If you remove TARP Obama has no deficit decrease.

          Likewise Obama got to enjoy the first few years of payins to ACA while the payouts didn’t hit until his last year in office.

    4. No, they don’t. Republicans are damn near useless. But at least they don’t have plans to immediately raise the deficit by trillions.

    5. The plan is to reduce spending. You’re dumb enough to think that the current deficit is Trump’s fault when it was predicted to be 1 Trillion in 2020 by the CBO all the way back in 2016, pre Trump.

      https://www.cbo.gov/publication/51129

      This is based on expected spending growth from programs already in place, such as entitlements. But you’re too dumb to recognize this fact, so I’ll let it go.

    6. If only they could follow the Obama plan: start with a one time emergency stimulus laden record deficit and then claim credit for not setting a new record going forward.

      Haha.

  11. Elizabeth Warren Doesn’t Really Have a Plan

    Then her plan can’t fail. Brilliant!

  12. It is not really a plan at all.

    Which is the, um, plan all along. It’s just something to point to so she can see, “look, I’m serious. elect me”

    1. “Elect me and I’ll make the boo-boo go away.”

  13. America’s-Mother-In-Law, like many MILs, says all kinds of stupid shit that you just need to tune out in order to keep your sanity. And like many MILs out there, she has a long-assed laundry list of shit she thinks she can make better if you’d just listen to her! Oh yeah, that is so appealing to the male voter.

    Go ahead Team D….pin your hopes on Fauxahontas. Knock yourselves out with a tomahawk or something. 🙂

    1. What’s with the smiley faces today Atlas? I think someone has slipped you a mickey.

      1. Don’t be sexist – Michelle, not Mickey.

      2. Meh…call me a Happy Warrior? Sometimes I get irritated with some of the comments, but by and large I kind of enjoy the back and forth. I have read some of the most hilarious comments ever here at Reason.

        The funniest thusfar (which I am shamelessly stealing for the next time my adult son does something kind of stupid): You tried to think, but failed. Now tell us your thought. 🙂

  14. She doesn’t appear to have a plan to be President either.

    1. If she gets the Democratic nomination, Warren will easily beat Orange Hitler or any other Republican.

      1. Beat off maybe.

  15. How does Europe pay for it? Higher taxes and lower reimbursements.

    Branded drugs are about 10% of total spend. I haven’t checked the numbers in about 3 years.

    The real savings comes from slashing doctor and administrator salaries. And delaying/denying procedures.

    So, you take our current healthcare premiums and convert them to taxes. Then you cut services.

    But to what end?

    We pay a larger percentage of GDP on healthcare than do the Europeans. Primarily because we can afford it and we prefer the high service model of healthcare.

    1. We pay a larger percentage of GDP on healthcare than do the Europeans. Primarily because we can afford it and we prefer the high service model of healthcare

      +1

      The understated case. Why do we pay more? Because we can. You’re not allowed to in Europe.

    2. We’ve been through all this before. I don’t believe even Bernie Sanders wants to nationalize the staff, just the payment system. But I have repeatedly told people this when discussing this subject: America CAN afford a national healthcare plan– if we nationalize the ENTIRE system and close a good chunk of all healthcare facilities. Doctors and other medical staff get a GS salary, and we call it done.
      That will never happen.

      1. That woman at the BMV with the heavy makeup, frumpy flowered blouse, and fat-encrusted arms with a cigarette dangling from her lip….

        ..she’s your nurse.

  16. It is easy to explain:
    We can’t afford it.

  17. Hey, didn’t Dear Leader day he had a plan for universal health care. I guess when everyone knows you’re a.) a liar and b.) completely full of shit you get a pass.

    1. Worked for the last guy.

    2. “…I guess when everyone knows you’re a.) a liar and b.) completely full of shit you get a pass.”

      Not always, scumbag: You don’t get a pass.

  18. Another horrible misogynist attack on warm, wonderful, witty Dr. Warren. When will Suderman wake up to the genius insights, vast intellect, and engaging charm of this extraordinary woman?

  19. The real plan; keep it secret until after the elections.
    1. Make the selective service applicable to any and all sexes, genders, or anything else invented.
    2. Draft everybody.
    3. Put them through the medic courses.
    4. Anyone who shows the slightest understanding gets promoted to doctor.
    5. The doctor’s ‘enlistment’ runs for 30 years.
    6. Everybody get their medical care through the military.
    TA DA! universal healthcare with complete cost control, because the national defense is a required expense. “health care” becomes zero. Everyone is in the military so everyone get treatment with the job.
    Plus the fun part is that they can now just order diet changes, compliance with rehab routines, PT, etc with the bother of a silly legislature.

  20. Who needs practical things like a plan to pay for 320 million plus people’s healthcare when you have a “Meme Team” that will save the nation with selfies and memes!

  21. Broadly speaking, Warren’s plan doesn’t account for the likely economic ripple effects it would almost certainly cause; instead, she assumes that even with an array of new taxes and fees on businesses and wealthy individuals, economic growth would continue without change.

    Not surprising, this is what fucktards like Warren always do. They assume that everything the government does, from increasing taxes to increasing regulations – you name it, happens in a vacuum with no effect on economic growth, or unemployment, or anything else. These people are so fucking stupid and arrogant.

    1. And that because it’s in a vacuum, their calculations of “lower costs! more coverage! more effecient!” will certainly come to pass. Yet every time a federal program gets through, we see low efficiency, low returns, delays, poor care and work.

  22. >>She wants something airtight but easy to understand.

    “Nothing will pay for my plan.”

  23. Unless Grampie Gulag drops out, she will not get the nomination. xijinbloomberg might take some votes from Creepy Uncle Joe. Its a free for all for the nomination.

    1. “Free for all” is the Donkey economic plan.

  24. “I did the homework, (W)e can do it without raising taxes one penny on middle-class families.”

    Hey, the French did it. Oops, I mean the Danes. Oh shit, the Germans? I know, I know. North Korea did it!

  25. What I find most disturbing is her seeming belief that if elected all of this will just automatically happen. What is that narcissism? Megalomania?

    1. No belief is needed for pandering.

      1. The belief is needed by the panderee.

  26. It’s brilliant to tax existing wealth; think of the massive economic crash when Gates and others sell off their shares to pay the taxes.

    1. They think that he has a Scrooge McDuck type vault where all of his hoarded wealth is in cash. They don’t realize that almost all of the wealth is in stocks and other investments. They don’t even realize that investments allow other people to use his money to keep the economy moving.

  27. Since when have communist needed to explain how their gifts, benefits, freebees and their el·ee·mos·y·nar·y largesse will be paid? You can just take their words to the bank. 🙂

  28. Another red herring from Red Herring.

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