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“Not One Penny In Middle-Class Tax Increases” – Warren Unveils Plan To Cover $52 Trillion Medicare-For-All

Courtesy of ZeroHedge View original post here.

Senator Elizabeth Warren unveiled more details of her "Medicare for All" plan she swears won't cost the middle class "one penny," while raising federal spending by $20.5 trillion. Paying for the increases would be a wave of taxes on large corporations, the wealthy, cracking down on tax evasion, an $800 billion reduction in defense spending, and putting newly legalized immigrants on the tax rolls.

Warren has come under pressure from her Democratic rivals to release the details of her ambitious plans – and in particular, how she plans to pay for them. As the New York Times notes, "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."

At a cost of "just under $52 trillion" (about what the current system will cost over 10 years), Warren's plan calls for the elimination of employer-sponsored health insurance, which over 50% of Americans now receive. It would be replaced by free government health coverage for all Americans.

To pay for the $20.5 trillion, Warren would require employers pay trillions of dollars to the government. For those who currently pay for employee coverage, this would replace much of that spending. Businesses who don't currently cover healthcare costs would be exempt. Warren would also tax financial transactions such as stock trades, as well as boost taxes for investment gains for the top 1% of households. Her signature wealth tax proposal would also take a larger chunk from billionaires. Lastly, Warren 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.

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. -NYT

Democratic 2020 rivals such as Joe Biden and Bete Buttigieg have repeatedly criticized Warren for her failure to detail the specifics of her plan – with Buttigieg calling her "extremely evasive."

"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," Warren writes in her plan. "We don’t need to raise taxes on the middle class by one penny."

After the Trump administration and Republicans unsuccessfully attempted to repeal the Affordable Care Act, Warren and other Democrats have taken up healthcare as a central issue to compete for their party's presidential nomination.

The Times suggests that responding to her rivals in such detail has opened her up to attack from the right.

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. -NYT

Warren has aligned herself with Sen. Bernie Sanders, one of her top rivals who has long championed single-payer healthcare. Not only did she co-sponsor his Medicare for All legislation in the Senate, she declared "I'm with Bernie" regarding healthcare during her first primary debate in June.

According to the report, Warren's financing plan is based on cost estimates that are on the low side. Her estimate that the plan will cost $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, except she inserts her own assumptions which reduce their estimate of $34 trillion over the same period.

Warren's plan would create a new "employer Medicare contribution" which would total $8.8 trillion over a decade. Moreover, states would pay the federal government much of what they already spend to insure state workers and low-income residents covered by Medicaid.

$3 trillion of the plan would be raised via two proposals to tax the richest Americans. Previously, Warren floated a 3% annual tax on net worth over $1 billion. She is now raising that to 6%. The second proposal would alter how gains are taxed for the top 1% 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. -NYT

On the medical side, Warren's plan would put 'substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies,' according to the Times. Instead, Warren assumes that aggressive negotiations could lower spending on generic medications by 30% vs. current levels, and that spending on prescription drugs could plummet by 70%. Payments to hospitals would be around 10% higher than what Medicare currently pays – which would lead to big cuts for some hospitals, while helping others. Doctors would be paid less under Warren's plan vs. what Medicare currently pays.


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