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Elizabeth Warren Releases #MedicareForAll “Pay For” Plan, with “No New Taxes” on the “Middle Class”

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By Lambert Strether of Corrente
This morning, Elizabeth Warren, after pressure from the press and some candidates in the last Presidential debate, released her “plan” to pay for #MedicareForAll. KHN’s Morning Briefing (“Warren’s $52T Plan To Pay For ‘Medicare For All’ Leans Heavily On Employer Taxes, Avoids Increase For Middle Class“) covers the explosion of coverage, and summarizes Warren’s “plan”:

Sen. Elizabeth Warren (D-Mass.) released her plan for “Medicare for All” Friday, after facing criticism for not detailing how she would pay for the overhaul to the health system. It would require the federal government to absorb $20.5 trillion in new spending, but Warren says that the middle class will not see “one penny” in tax hikes. She plans to carry over almost all existing health funding from employers and state governments while also levying a variety of new taxes on the rich, corporations and high-earning investors — including doubling her signature wealth tax on billionaires.

(Note that the “employer taxes” in the headline doesn’t convey Warren’s concept of “carry over almost all existing health funding from employers,” in the body, at all fairly. Moreover, the body omits much funding detail. Shame, KHN!) Of course, if we as a society have the resources to mobilize for any given project, we can “pay for” it — see World War II, etc. — and nobody ever asks how to pay for wars or expensive fighter jets that catch on fire. Nor does anybody, including Warren, asking how we “pay for” any of Warren’s other plans. A suspicious mind might even conclude that “how you gonna pay for it?” is a question asked in bad faith, with a view toward ensuring that we can’t have nice things. Be that as it may, the way out of the sterile “pay for” debate is the door: MMT. Sanders has not walked through the door, but Warren, by legitimating the debate, has slammed it.

That said, some celebrity endorsements! Paul Krugman:

And CAP. Note the “universal health care” framing, which is most definitely not the same as single payer #MedicareForAll:

(One might wonder if CAP had a hand in writing it.)

Finally, Ady Barkan: From The Intercept:

But then Warren did what she does best: her fucking homework. She consulted the experts, she double-checked the numbers, and she dropped a codex of wisdom right in the middle of the teacher’s desk. And the political reverberations may be felt for decades.

Just imagine what will happen when the debate moderators ask her next time how she’ll pay for her plan. She can answer honestly and with authority that Medicare for All will mean zero health care costs and no increases in taxes for all but the wealthiest Americans.

So how does she pay for it? Here is where the brilliance of this plan’s political economy really shines brightest. Warren pays for her plan by targeting the bad actors who are making our health care system so expensive and wasteful and our economy so rigged and unequal.

Krugman and CAP are, of course, fair game. But criticizing Ady Barkan — has Joe Biden met with him yet? — is a bit like kicking a puppy. So let me say gently that Warren’s “plan” — how I hate that “plan” has become politically charged — is hardly a “codex of wisdom,” and that Sanders’ approach to the “pay for” issue lacks disadvantages that Warren’s plan has, and has advantages that Warren’s plan lacks. So I’ll skip the hot takes (Ezra Klein, Politico, Yglesias) and jump right to Warren: “Ending the Stranglehold of Health Care Costs on American Families“.

Warren’s Plan Goes to Happyville

I’ll start by pointing out what makes me happy. First, Warren really does seem to support Sanders plan explicitly. In other words, she seems to have answered the question that I suggested debate moderators ask her in the affirmative: “Q: Senator Warren, given your unequivocal support just last week for Massachusetts bill H.1194, “An Act establishing Medicare for All in Massachusetts,” is passing Senator Sanders’ bill S.1129, the “Medicare for All Act of 2019,” which you co-sponsored, your objective for the American health care system?”

Start with the Medicare for All Act – which I have cosponsored[1]… Under my plan, Medicare for All will cover the full list of benefits outlined in the Medicare for All Act, including long-term care, audio, vision, and dental benefits. My plan will cover every single person in the U.S.

(I assume that Warren’s horrid, crawfishing campaign page on health care will shortly be cleaned up.)

Second, it makes me happy that Warren supports the principle that health care should be free at the point of delivery:

[I]ndividual spending on premiums, deductibles, copays, and out-of-pocket costs will basically disappear

OK, “basically.” But Warren does count on the administrative cost savings that single payer brings, so I’m willing to believe she’s going to dynamite the gatekeeping system for “access” to care. I was worried that she wouldn’t — liberal Democrats love them their gatekeepers — but she seems to have done so.

Third, it makes me happy that Warren’s campaign staff can only have made the calculation that they need the left’s votes on this issue (“The people who can destroy a thing, they control it.” –Frank Herbert, Dune). In short, Warren’s “plan” is a win for #MedicareForAll, and advocates should take that win.

Warren’s Plan Goes to Pain City

Now to my concerns. There are three: Weasel wording, revenue “sources”, and the “transition period.” Let us take them each in turn.

First, the weasel wording. Here:

We must fix this system. And over the long-term, the best way to achieve that goal is to move from the system we have now to a system of Medicare for All.

And here:

I’m filling in the details and releasing a plan that describes how I would implement the long-term policy prescriptions of the Medicare for All Act and how to pay for it.

And here. As anaphora (!):

Every candidate who opposes my long-term goal of Medicare for All should explain why the “choice” of private insurance plans is more important than being able to choose the doctor that’s best for you without worrying about whether they are in-network or not…. Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone… And every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to make sure every single person in America can get high-quality health care and won’t go broke… And make no mistake – any candidate who opposes my long-term goal of Medicare for All and refuses to answer these questions directly should concede that they have no real strategy

Can’t pay the goddamn bills with a “long-term goal,” Liz. In any case, we understand. “Long-term” means not next year — original Medicare was implemented in a year, back in the days of steam-powered punch-card readers — or the year after. I’d say it means two Presidential election cycles; that’s the time it took for the political class to figure out ObamaCare was a turkey, after all. That’s plenty of time for liberal Democrats to scam in a few “transition plans” to stave off the evil day when health insurance companies aren’t big donors any more.

Second, the revenue “sources” (in quotes because from MMT we know that Federal taxes don’t “pay for” Federal spending.) I’m only going to consider tax side, not the cost side (although there are issues there, notably for hospital costs, and Warren’s quasi-religious belief in markets). Here is Warren’s methodology, from her Medium post:

I’ve asked top experts to consider the long-term cost of my plan to implement Medicare for All over ten years – Dr. Donald Berwick, one of the nation’s top experts in health system improvement and who ran the Medicare and Medicaid programs under President Obama; and Simon Johnson, the former Chief Economist at the International Monetary Fund and a professor at MIT. Their analysis begins with the assumptions of a recent study by the Urban Institute and then examines how that cost estimate would change as certain new key policy choices are applied. These experts conclude that my plan would slightly reduce the projected amount of money that the United States would otherwise spend on health care over the next 10 years, while covering everyone and giving them vastly better coverage.

Both Berwick and Johnson are credible; their response to Warren (PDF here) summarizes her “plans” revenue “sources’ in the form of the following table, which I have helpfully annotated:

(I”m just going to use the original material from Berwick and Johnson, rather than digging it out of Warren’s white paper.)

There are two big problems with Warren’s “plan” (A) the “head tax,” and (B) dependencies.

(A) The head tax. Matt Bruenig writes that “Warren’s Perpetual Medicare Head Tax Is Unworkable and Bad.” Bruenig summarizes the proposal:

1. Employers will be required to pay an “Employer Medicare Contribution” equal to 98 percent of their per-employee health care costs in the year prior to Medicare for All’s implementation. This will mean that initially some employers pay more than others since that is already the case in the status quo. But over time, each employer’s contribution will be gradually converged to the average

2. Employer Medicare Contribution until every qualifying employer is paying the same amount per employee.

3. Employers with less than 50 employees would be exempt from the Employer Medicare contribution both initially and forever.

4. Independent contractors (and the companies who hire them) will also be exempt from the Employer Medicare contribution both initially and forever.

The head tax is regressive:

What Warren is proposing here, in ordinary fiscal language, is a Medicare Head Tax. This is a departure from the normal Medicare Payroll Tax proposals. The distributive difference between them is that the Medicare Payroll Tax charges a specific percentage of each worker’s earnings, while the Medicare Head Tax charges a specific dollar amount per worker. [For example,] the $9,500 head tax is equal to 63 percent of the earnings of the worker making $15,000 per year, but only equal to 5 percent of the earnings of the worker making $200,000 per year. For the employer-side payroll tax, it is 8 percent for everyone. Needless to say, the Medicare Payroll Tax is far superior to the Medicare Head Tax distributively speaking. Specifically, the Medicare Head Tax charges middle and low earners massively more than the Medicare Payroll Tax does.

Second, a head tax is easily evaded:

Separate from the distributive problems of Warren’s head tax, the two exclusions also make the proposal clearly unworkable and easily gamed. .

Once some employers start doing this, the average Medicare Employer Contribution will have to go up to keep revenue stable, which will push even more employers to restructure their labor into independent contracting or outsourcing to small firms. And, at that point, the death spiral is off to the races.

The genius of the payroll tax, of course, is that it is unable to be evaded like this. Every dollar of labor income — even independent contractor income — is charged the same. No restructuring can save you from it.

Maybe Uber could set up a separate business unit to help companies handle the demand for turning employees into contractors that Warren’s plan will create. Or some Silicon Valley venture capitalist is licking their chops as we speak.

(B) Dependencies. Warren, to “pay for” #MedicareForAll, is going to have to ramp up IRS enforcement (remember how popular the mandate was?), pass immigration reform, and take away a slush fund from the Pentagon. In politics, as in programming, “The cheapest, fastest, and most reliable components are those that aren’t there.” If you really want #MedicareForAll to pass, why create a combinatorial explosion, a veritable hairball of political problems that will get in the way of its passing?

Third, the transition period. From Warren’s white paper:

Of course, moving to this kind of system will not be easy and will not happen overnight. This is why every serious proposal for Medicare for All contemplates a significant transition period.

In the weeks ahead, I will propose a transition plan that will specifically address how I would use this time to begin providing immediate financial relief to struggling families, rein in out-of-control health care costs, increase coverage, and save lives. My transition plan will take seriously and address substantively the concerns of unions, individuals with private insurance, hospitals, people who work for private health insurers, and medical professionals who worry about what a new system will mean for them. It will also grapple directly with the entrenched political and economic interests that would spend freely, as they have throughout modern American history, to influence politicians and try to frighten the American people into rejecting a plan that would save them thousands of dollars a year on premiums and deductibles while making sure they can always see the health care providers they need with false claims and scare tactics.

Which is all fine — accepting the premise that “the concerns of unions, individuals with private insurance, hospitals, people who work for private health insurers, and medical professionals” have never been taken seriously before — but we’ll need to see how long that transition period is, won’t we? Given that #MedicareForAll is a “long-term” goal?

Conclusion

In concluding, here are Sanders’ views on the “pay for” debate:

“You’re asking me to come up with an exact detailed plan of how every American — how much you’re going to pay more in taxes, how much I’m going to pay,” [Sanders] said. “I don’t think I have to do that right now.”

The Vermont senator explained that before getting to his detailed financing plan, he wants Americans to understand that they currently pay more for health care than people in other countries.

“The fight right now is to get the American people to understand that we’re spending twice as much per capita — that of course, we can pay for it,” he said. “We’re paying it now in a very reactionary, regressive way. I want to pay for it in a progressive way.”

(Note that Warren’s head tax is not progressive.) FWIW, I think that Sanders’ view of where voters are is correct, though they can be brought to a different place by, well, politics. And here is a link to Sanders’ “pay for” options from his Senate site (and again, it’s not as if Warren was the very first person to conisider the issue. Here are the subject headings:

  1. 7.5 percent income-based premium paid by employers
  2. 4 percent income-based premium paid by households
  3. Savings from Health Tax Expenditures
  4. Make the Personal Income Tax More Progressive
  5. Make the Estate Tax More Progressive
  6. Establish a Wealth Tax on the Top 0.1 percent
  7. Close the Gingrich-Edwards Loophole and Create Parity for Wealthy Business Owners

Note that all Sanders’ options are for progressive taxes (unlike Warren) and none of Sanders’ proposals involve dependencies on other program areas (unlike Warren). His approach both better and more likely to pass.

NOTE

[1] But there’s this: “The bill provides a detailed proposal for how to achieve our end goal. But as economists and advocates have noted, the legislation leaves open a number of key design decisions that will affect its overall cost, and the bill does not directly incorporate specific revenue measures.” Does Warren not know that revenue bills originate in the House?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

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75 comments

  1. BoulderMike

    By stepping into the “how can we pay/afford M4A” trap, I believe Warren is being duplicitous and acting like she supports M4A while actually working to kill any chances of it coming to pass. The only valid cost “argument” is MMT. Any other argument is to me a back door attempt at killing M4A.

    2. jrs

      How about we look at how other countries pay for it? Real working examples. Because we know other countries have single payer and manage to make it work.

      1. inode_buddha

        I’ve tried this before, and most people I’ve tried it with, say that those other countries economies will collapse, or they have severely rationed care, etc. One woman told stories of people dying while waiting in line in Canada — and she works in healthcare.

        1. rd

          This is probably the biggest socio-economic-political in the US today. Most Americans have a mental wall with cartoon versions of other countries outside it. So when other countries have largely solved a problem, Americans can’t believe it and the discussion revolves around false narratives.

          The rest of the developed world has largely solved universal healthcare at about half to two-thirds of the US per capita cost. (Most of the countries with significantly less than half US per capita spending do seem to have significant quality and delivery issues in the system which can be solved with additional funding).

          The best parallel example is Canada which is about half the US per-capita cost. Canada has a lower population density than the US and still manages to deliver quality care to rural areas. I suspect that Canada will need to increase per capita spending in the coming couple of decades as the demographics age, but that won’t be anything close to a doubling of cost.

          Single-payer healthcare started in Saskatchewan in Canada. That is north of Montana and North Dakota with a much lower population density than those states in a more rural setting. The entire population of Saskatchewan today is 1.2M, so many US counties have more people in a tiny fraction of the area. Saskatchewan is also one of the more “conservative” areas in Canada. If you can make it work in Saskatchewan, you can make it work anywhere – its purely a state of mind. https://en.wikipedia.org/wiki/Medicare_(Canada)

          If healthcare costs can be dropped by a third, the whole question of “how do you pay for it” and “will my taxes increase” goes away. The US already puts more public taxpayer money per capita into healthcare than Canada despite Canada being the “socialist” country – we just don’t know how to extract the value for the money we put in.

      1. Susan the Other

        It’s true Lambert. And all of Liz’s omissions are getting a little sickening. It makes me weary to think she thinks she can get away with this crap. Your “A question asked in bad faith” is exactly what comes across. Would Liz do this if she thought we’d look at her political verbiage under a microscope – apparently the answer to that is yes (because we’ve been doing it) and that means that Liz really doesn’t care how illogical her plan for success is, how impotent, how written by the lobbyists, etc. It’s a question asked and answered in bad faith. So, as in any court of law, we are free to assume that if she is (clearly) fudging this one she is probably fudging everything. Too bad. It kinda makes her seem amoral.

        1. clonalantibody

          Look at Warren’s response to her “How do you pay for it” plan – it is pitiful. She has not done her homework, and relied upon people with three letters behind their name – without questioning them and understanding the issues.

          https://twitter.com/SharnaAisha/status/1190458420668878849

          These are clear signs that she is not a “policy wonk” as she would like to have us believe. I have not seen this kind of unforced error with Bernie.

  3. Toshiro_Mifune

    Independent contractors (and the companies who hire them) will also be exempt from the Employer Medicare contribution both initially and forever.

    So everyone gets to be a consultant now.

    Once some employers start doing this, the average Medicare Employer Contribution will have to go up to keep revenue stable, which will push even more employers to restructure their labor into independent contracting or outsourcing to small firms.

    Ok, wasn’t just me.

  4. political economist

    A payroll tax is obviously a tax whose incidence largely falls on working people!! And, as a head tax as you point out, disproportionately on lower-income workers!

    No wonder Krugman likes it.

    1. workingclasshero

      I make $50000 a year as a union production worker and am single.i pay close to 10% income tax along with with the usual payroll taxes.is this brain surgery to get elected in this country?cut income tax and move most of difference over to medicare and social security and threaten upper bourgeiose with punitivley higher taxes until they allow institutional leway for direct treasury funding for soc sec/medicare according to mmt basic principles.state this directly and repeatedly to the media until they have to report it.force the idea on the u.s. body politic in a consistent long term fashion and they will eventually get it.get on with it.

  6. Hepativore

    Another problem with Warren is her tendency to back away from political conflict or disagreement. Warren could have the best healthcare proposal in the world, but any attempt to move away from or reform the system we have now is going to be met with fierce opposition from both parties. If elected president, Elizabeth Warren will probably bend a knee to the neoliberal consensus in Washington at the first sign of argument.

    In any case, we would get a watered-down “policy” that would be little different from the ones before with neoliberal fingerprints all over it thanks to Warren being a “team player” at heart by her own admission.

    1. rd

      I think the general points in this article are good, but the $50k salary won’t become $65k for numerous reasons:

      1. There will be taxes paid by the company and the employee in lieu of the private health insurance
      2. There will still be some private insurance offered by employers to cover things not covered by single payer
      3. A company’s first instinct will be to give the windfall to management and the shareholders
      4. The wages will rise as competition for full-time employees becomes fierce because they won’t have the current penalty of huge employer-funded healthcare costs
      5. True small businesses will be more viable because the healthcare funding problem largely goes away, creating more competition for workers

  8. notabanker

    Gotta say, Warren is really sharpening her political tools. This was a smart move on her part and will play well. Unfortunately, the someday long term plan that is going to cost the rich and corporations all of their profits are snowballs in hell. But she can say she has a plan.

    If Clinton was this sharp she probably woulda won.

    1. Phenix

      Warren has terrible political instincts. Her “moderate” political competitors will attack her from the right and Bernie will attack from the left. She is giving free money to the likes of Walmart while punishing unionized companies and those that match their healthcare packages.

      Am I reading this wrong?

      2. Amfortas the hippie

        ” Her “moderate” political competitors will attack her from the right ”

        already did a preemptive strike at like 5 this morning.
        https://www.politico.com/news/2019/11/01/elizabeth-warren-medicare-for-all-063701

        shaking their heads….”now, now, don’t be hasty”
        the usual canards about how people just love paying through the nose for substandard “care”, and how the corps won’t like it(which means it’s a no-go, obviously)

        FTA:” Across the Democratic Party, ordinary voters, senior strategists, and health care wonks are increasingly nervous that the candidate many believe to be the most likely nominee to face Donald Trump has burdened herself with a policy that in the best case is extraordinarily difficult to explain and in the worst case could make her unelectable. ”

        this, after asking two guys in an iowa muffler shop.
        so…case closed,lol…”the People have spoken!”.
        i hate what this country has become.

    2. Lambert Strether Post author

      > This was a smart move on her part and will play well

      I think it will play well in the Democrat 10% base, because it’s wonky (and has the additional merit of screwing working class people with the head tax). They will be re-assured by all the “transitional,” “long-term” stuff, as will Democrat donors. And then it won’t pass, because Warren tied #MedicareForAll to all these other dependencies. In reality, government accounting doesn’t work as that table implies it does.

      This is a crude attempt by Warren to steal Sanders’ issue. She keeps calling it “her plan,” but the important part is the universal concrete material benefit, which Sanders put in play, not the funding mechanism, of concern only to the 10%, because that’s the short of thing they do (and have insurance for doing). Warren is like a manager scheming to replace a chief executive by writing a better spreadsheet and then calling meetings about it. In reality, that’s not what executives do. This is why Warren is far better cast as a subordinate (good with detail) rather than an executive (vision and direction).

      1. petal

        Lambert, when I was at her town hall, I was sitting there thinking about how what I was hearing had come from Sanders first, and it seemed like all she had done was copy his stances(or tweak them slightly to make herself more attractive to the better off) in order to get traction, and she was acting as if she was the first one to take these policy stances. Who is the real Liz Warren? Again, it struck me as if it’s all an act.
        The one thing she didn’t mention at the town hall was medical care. Guess this is why-they were saving it for the big reveal.

        1. petal

          Sorry guys, I just woke up. I meant to say I had heard them at Sanders’ town hall back in early 2016-almost 4 years ago now.
          And “scheming manager” is spot on. After seeing her, I don’t trust her one whit.

        2. The Rev Kev

          Brings up an interesting question petal. Does Warren use cut-and-paste with Sander’s announced policies in her own policies or does she use the more old fashioned method of past-up as shown by Lambert in yesterday’s Water Cooler?

          1. petal

            Oh I didn’t read that one! I’m going to guess cut-and-paste because it’s faster and more efficient. Can’t waste time going in for the kill.

        3. Eureka Springs

          I say, Off with her head tax!

          As of Oct. 29th

          Rob
          ‏ @philosophrob

          Tweets about “single payer”

          111 – Bernie Sanders
          11 – Andrew Yang
          3 – Michael Bennet*
          1 – Julian Castro
          1 – Beto O’Rourke
          0 – Joe Biden
          0 – Cory Booker
          0 – Pete Buttigieg
          0 – Tulsi Gabbard
          0 – Kamala Harris
          0 – Amy Klobuchar
          0 – Tom Steyer
          0 – Elizabeth Warren
          7:19 PM – 29 Oct 2019

          1. Dante

            from 1 Elizabeth to another….

            Facing Voldemort

            When you’re disabled, you learn to adapt… tweak… make-do. These skills are essential, because as much as the modern, progressive world likes to think it’s ‘woke as **ck‘ — it’s really not. Full inclusion of disabled people in society is a long way off, and these issues barely register on even the most liberal political agendas.

            In fact, during this election season’s rounds of televised Democratic debates, I haven’t heard one of the 318 presidential candidates even say the word ‘disability.’

            Considering disabled Americans are the largest minority group in the country— one that spans race, gender, religion, sexual orientation, and socioeconomic background— you’d think it would come up. At least once. (Just like Bernie Sanders yells and shakes his fists at another candidate at least once a debate.)

            It’s possible the candidates are just being thoughtless in ignoring disability issues in the debates— like when careless people forget to put another roll of toilet paper in the bathroom after they’ve used the last square of Charmin. But, perhaps there is another, more sinister meaning. What if they are subconsciously afraid of saying the word ‘disability‘ aloud because then it acknowledges that we actually exist? And, maybe, just maybe, they are frightened of us? It could be possible. After all, this was why everyone was reluctant to say Voldemort’s name aloud in Harry Potter.

            https://elizabetteunplugged.com/2019/10/30/facing-voldemort/

            1. watermelon

              I think it’s far simpler, in that we’ve all been schooled in our culture to think it’s a bad word.

        4. anon in so cal

          Didn’t Hillary Clinton also appropriate Sanders’ platform in 2016 after her Iowa results? She similarly had no intention of ever implementing it.

  9. Fern

    Excellent! Lambert lost no time in posting a superb summary and critique. “Delay implementation until after my two presidential terms are completed and finance with a regressive tax that provides strong incentive for shifting to contract labor”.

    Putting together a consulting firm to help companies restructure from salaried and full time employees to contract workers sounds like the sort opportunity that Amelia Warren Tyagi will excel at exploiting.

    1. Lambert Strether Post author

      > Putting together a consulting firm to help companies restructure from salaried and full time employees to contract workers sounds like the sort opportunity that Amelia Warren Tyagi will excel at exploiting.

      I really should have thought of this. Why am I never cynical enough?

      1. tegnost

        It’s not so much they want to restructure companies. This proposal sounds like bezos/uber/lyft dream plan. See point 4,
        “Independent contractors (and the companies who hire them) will also be exempt from the Employer Medicare contribution both initially and forever.
        It unlevels the playing field against employers and for tech apps and etc…eventually (in bezos dreams again, which he is happy to throw a lot of money at…hmmm, how much has he paid for this plan?) all workers are disassociated and marginalized, responsible for supporting the infra on which the magic of amazon/uber rides , paying their own social security(aside to an aside to an aside, this is a great way to kill social security and blame it on those irresponsible contractors who can’t afford to pay the [not progressive, so another gift to the grift] tax), gas, vehicle insurance and everything associated with that. Where was I reading yesterday about cooperation in humans came about or surfaced as an operational benefit against aggressive males who want everything for themselves and they take it, kind of like the bezo. At least in Louis L’Amour novels the banker always gets it in the end. Now we’re a nation of laws to protect the worst of us from our cooperative wrath. So no, not cynical enough. After sleeping on it this plan sounds worse than o care. Maybe they should have used this plan first. Oh and since I was out and about yesterday, the “small incremental change” made my day, thanks for that.

        1. tegnost

          Slightly related, I am still trying to figure out which zip codes get the most amazon deliveries and ISTM that this info is unavailable, type the query into google or ddg gets you pages of how to buy or sell stuff on amazon. While searching just now this article came to my attention…the first interesting article on page 4 of the ddg search, and it’s an op ed from all of 4 days ago, …on page 4 …search engine indeed
          https://www.washingtonexaminer.com/for-every-amazon-package-it-delivers-the-postal-service-loses-146
          FTA…”And Amazon is happy because it has a deal that takes advantage of a loophole in the law that gives it a taxpayer-subsidized deal none of its competitors could get or match.”
          Also I love that line that says postal workers are glad because now they can work 7 days a week, it is the examiner after all so comes also with this obligatory trope
          “But its finances are not in order. The Postal Service has had one profitable quarter in the last five years. Even with monopoly protection on its most valued service, it has fallen more than $120 billion behind in pension and retiree health expenses and has chewed through a $15 billion line of credit from the Treasury.”
          A statement that could use some serious unpacking
          Amazon is a parasite on the commons

  10. Carey

    In lieu of “but how would/could we pay for it!”, why not reframe
    to “how shall we shift resources for it?”?

    Perhaps from the so-comfortable yet ever-avaricious Few, to the suffering Many?

  12. buermann

    “Warren does count on the administrative cost savings that single payer brings”

    They used the Urban Institute’s cost estimate, which was not an estimate of the cost of the M4A bills in congress, because they arbitrarily increased Medicare reimbursement rates to hospitals by 15%, and also assumed that there would be $0(!!!) in administrative savings for providers. With the unjustifiable projections of exploding utilization their estimate is a gross overestimate. It’s at least as disappointing that the Warren campaign didn’t raise any of those points as it is that they’re going to try paying for it with a regressive head tax instead of mocking all the public option plans for their “8.5% income based premiums” by just rolling out an 8.5% employer income based premium.

    1. Lambert Strether Post author

      I understand that Warren used the (certainly conveniently timed) Urban Institute report figures. But the important principle is the cost savings, which Warren accepts. This is a win I think #MedicareForAll advocates should take.

  13. Another Scott

    Excellent work as always Lambert.

    One thing that I don’t like about either Warren’s or Sanders’ plans is that they are tied to a payroll tax, rather than an income tax, meaning that people who earn their income from something other than working, will pay less than those of us who collect a paycheck every week.

    1. jrs

      It might be a sop to the rich, as if their capital gains don’t already get special tax treatment etc.. But I don’t think the rich at this point that strongly oppose M4A, there doesn’t seem that much class opposition. There is health industry opposition of course.

  14. Seth A. Miller

    Anyone who wants to advocate for capitalism should be asked the same question: how are you going to pay for it?

  16. Danny

    Her “Long Term Goal of M4A” is superseded by my short term voting for Bernie Sanders in the California Primary in March.

    Bernie has had the same positions for decades and isn’t relying on some “brought to you by popular demand, we just updated our website approach to your public health and safety” reactionary spin to valid criticism.

    Will her “tax on businesses” include Mom and Pop landlord revenue streams?

    Bernie or Trump, it’s your choice Democrats.

    1. mtnwoman

      Agree. Good ad.
      Don’t like that business is still involved in paying for employees health costs even if the $ goes to M4A.
      Would like to see M4A uncoupled from employers. If a sm biz grows > 50 employeess they are hit with big expenses in her plan.

      1. Danny

        One way to avoid that is to have a second business so that no one exceeds 50 employees. I’m worried about “businesses” including landlords and service providers who will just pass it on to renters and customers. Limit the tax to billionaires please. Or, maybe a tiny % off every financial transaction over I billion. Oh, that’s already Bernie’s idea. I think I will vote for him.

  18. Temporarily Sane

    I have no trust in Warren whatsoever. Her own words and her regular supplication to the establishment tell me all I need to know.

    The only candidate that matters is Bernie Sanders. If he wins he will still face enormous pushback from the usual suspects and will need a strong movement behind him to keep up the
    pressure and momentum. An electoral victory alone will not be sufficient to pull America out of its neoliberal death spiral.

    Real, substantial change has always come from outside the system and it requires the mobilization of the masses. The civil rights movement is the obvious example and while everyone remembers Martin Luther King Jr., who, incidentally, was despised by the establishment of his day, he and the other leaders had the power of millions of ordinary people behind them.

    I fear many people have forgotten this lesson and invest far too much hope in electoral politics and celebrity politicians…and a capitalist technocrat like Warren is a non-starter to begin with.

  19. Earl Erland

    “A Codex of Wisdom. An Access to Health Care. An Eye of newt, and toe of frog. For a charm of powerful trouble, Like a hell-broth boil and bubble.”

  20. fdr-fan

    Good work summarizing.

    The head tax is an immediate non-starter. Automatically regressive, automatically punishes low-wage workers. Forces employers to offshore or delete low-wage jobs.

    Exactly like the current private system.

    The only solution is to adopt the French system by copy-paste. We’re incapable of writing or designing anything now.

    1. Lambert Strether Post author

      > The only solution is to adopt the French system

      The only solution is to adopt the French Canadian system. Fixed it for ya.

      Copying Canada is the safest play. Like us, they have a political economy that’s continental in scale, they are multilingual and multicultural, they have a Federal system, the common law, a “mixed economy” like ours, and they’re members of the Five Eyes. Plus they’re neighbors.

      Of all the countries in the world, Canada is most like us, so the safest play is to copy what they do.

      1. Oh

        The so called “long term” implementation is sure to kill the plan. She wants to appease the parties villains that brought us the current insurance based system and they’ll turn on Warren’s plan and jettison it. Warren will throw her hands up and say “I tried”.
        It’s better to go with Bernie’s plan that.

      2. Fern

        You might want to take a look at the Spanish system as well. I have friends who live in Spain. They’re quite wealthy and loaded with Ph.D.s and they have supplementary private insurance, but they say that they only use the private insurance for small things, such as when they have elective procedures and want nice accommodations. They say that when they have serious medical issues they use the public system because they have more trust in the competence of the medical care there.

        From a very superficial Wikipedia search I did last year, it appeared that Spain’s system might be more comprehensive than the others. Some of the systems had cost limiting features that I hadn’t been aware of and were problematic. For example, it appeared that Great Britain rationed care for the very ill with a strict and fairly low limit on how much they were willing to spend for every year of life expected to be saved, and Canada didn’t cover prescription drugs. Spain’s system appeared as if it might have the fewest restrictions and exclusions, but again, this was a very superficial search and I’d like to see an accurate comparison of the actual plans.

        A few years ago I asked my friend how the Spanish system was funded, and she said it was a hodgepodge of taxes.

        I’d like to learn more about the exact taxes used by the Spanish system. Sometimes a hodgepodge works better even if it isn’t theoretically the fairest or most efficient since it can be easier to gain acceptance than it would be for one large tax.

  21. Christopher Herbert

    Warren is doing what she does best, investigating, researching and then proposing. But it appears to me the tax proposal is regressive and, therefore, flawed.

    What is not flawed is her honest presentation of the over all task at hand; going to universal health care for all citizens. The ‘pay for’ question is of course irrelevant because we already pay about twice as much as the rest of the world’s developed nations who already have universal health care.

    Any sensible universal health care plan will be deflationary, as a result of the immense cost savings.

    What Warren has done is begin the real resource question, which is the discussion we need to have. Not the idiotic ‘pay for’ one that the idle rich impose on everyone else.

    It’s ignorance that gets in the way. We don’t understand the finances of the federal government so we believe those who tell us we are ‘broke.’

    The people who tell us this are doing so in self interest. They are the rich who have all the socialism for themselves. They get subsidies for their corporations, tax cuts and trust funds for their families and Treasuries they can buy to insure the safety of their billions of dollars in wealth.

    Treasuries that don’t fund Congressional spending. Congress has no need to issue these Treasuries.

    1. Off The Street

      Older readers may remember how GHWB pledged No new taxes.
      That soon changed into No. New taxes.

      Warren’s proposal will be viewed by many as the latter, particularly given the high level of distrust of politicians in Washington, DC and elsewhere. Counteracting that interpretation will take some better, even more honest, marketing.

  22. dk

    I still see this “heathcare debate” as a sideshow distracting from discussion about wages. Not that the issue would go away, but at least it wound’t be as much of a seller’s market, and more people could reason less desperately about the details.

    1. jrs

      I don’t think so. People need healthcare even if they don’t have wages, like the unemployed.

      If you mean if working people were paid better, they would worry less about their taxes, then perhaps (but if that was entirely true the right wing backlash never would have started). But yes if wages really went up without costs of living also going up just as fast, then they would have less cares and more breathing room, to the extent concern about taxes is aimed at the working class.

  23. mtnwoman

    How do I share this on twitter?
    Don’t see a twitter link, so copy/paste url?

    Thanks for this analysis!

  24. Synoia

    Pay for Medicare for All by pulling the money out of the DoD and Intelligence funding.

    Even them Medicare is a good step, but it nowhere are good as the UK’s NHS, which does not collect and handle money at the point of treatment.

  25. rps

    Why would employees give up their medical insurance for bare bones individual medicare coverage? Has Warren worked out the kinks of her M4A plan considering Medicare currently administers only individual plans? Plus the fact that Medicare does not offer family coverage. Unlike family insurance plans, children and spouse cannot enroll in your Medicare plan. And goodbye ACA including coverage of all children up to 26 who are eligible for their parents’ plan ( yeah yeah- everyone’s covered so its a non-sequitur under Warren’s plan. Or just maybe her plan is ignoring the glaring holes such as individual insurance plan costs versus family plans. Is the onus of universal coverage more so on the working individual with no family compared to a worker with a family?).

    Basic Medicare A – hospitalizations coverage includes deductibles, co-pays for limited hospitalization and minor preventative care. Basic Medicare does not cover most dental or vision care(glasses and eye exams…. Let’s not forget the hidden out-of-pocket costs dependent on your over-all coverage.

    Anyone who wants decent medical coverage must also subscribe and pay for Medicare supplement plans that include monthly premiums and deductibles such as: Part B – medical insurance, Part C – medicare advantage, Part D- prescription. Vision and dental insurance under C is a shot in the dark and good luck with that

    Who offers supplemental medicare plans? Private health insurance companies.

    Notably important: Population statistics including: who are the biggest users of the current healthcare systems?

    Health Tracker System (charts included): How do health expenditures vary across the population?

    In 2016, 5% of the population accounted for half of all health spending. The 5% of people who spend the most on health care spend an average of around $50,000 annually; people in the top 1% have average spending of over $109,750. At the other end of the spectrum, the 50% of the population with the lowest spending accounted for only 3% of all total health spending; the average spending for this group was $276.

    Until the medical coverage kinks are worked out, how to pay for M4A is way down the list….

    1. watermelon

      This is a bizarre argument that I can’t figure out why this is a problem.
      Why would individuals with their own “individual plan” need to be on somebody else’s family plan? Why would somebody want to pay for a family plan to cover themselves and other members of their family if everybody is already covered fully?

      1. rps

        The problem with #M4A is medicare’s current setup and administration for individuals. Its bare bones federal medical insurance that’s missing many of the necessary healthcare/ill-care components.

        Then there’s Medicaid which hasn’t been addressed but ignored; yet, its a highly important jointly funded federal and state healthcare system.

        As stated earlier, decent medicare insurance requires co-insurance add-ons such as parts B,C & D.
        The big deal- family plans are less expensive such as family deductibles versus individual. Each add-on premium for a decent policy will be per individual. Therefore, mom, dad, jack and jane who originally had a family deductible of say $800.00 is $400 per individual. That’s $1600 for all the medicare alphabet add-ons through private insurers. Plus out of pocket expenses before the insurance fully kicks in determined by the PPO or a HMO- which is limited to the state you live in. Children don’t work and therefore, the costs are born by the working parents. Simply, Medicare setup would need a massive over-hall.

        IMO, #Medicaid-for-all is already setup for individuals and families with many more benefits than the bare-bones Medicare.

        Medicaid medical benefits cover at least the same health care services that Medicare does, as well as some services that Medicare doesn’t cover. Those familiar with medicaid- who are disabled and/or below poverty line, receive many more benefits including prescription drugs, eye care and dental without co-pays or any out-of-pocket costs, premiums, co-insurances or limited hospitalizations, etc.

        Which brings up a valid point, what happens to Medicaid if #M4A is implemented???

        Medicaid is a more comprehensive healthcare system. Will it ultimately be tossed aside by the States? How’s that gonna work?

          1. Soon-To-Be-Expat

            Hi, marym,

            Remember you from FDL. Have a question for you, please.

            Why do you think Sanders refuses to outline exactly how he’d pay for UMFA?

            I ask, because it’s a relatively pressing matter for some current Medicare beneficiaries, who like myself, already have 100 percent medical coverage, and, according to Sanders’ white paper, will actually have to pay more, not less, for our coverage–if he levies the 4% income tax.

            IOW, we’ve run the numbers, and found that we save money paying our current premiums, as opposed to paying his proposed new income tax.

            BTW, we’re covered by TM and a ‘Plan F’ Medigap Policy–so, we have absolutely no deductibles, co-pays, or co-insurance.

            At this time, only our “Part D” prescriptions have any kind of deductible or co-pay.

            Frankly, Warren irks the heck out of me (her speaking style, etc.), but, must give her credit for at least being forthcoming about ‘how’ she would fund UMFA.

            My understanding is that the so-called ‘head tax’ is levied only on employers. And, according to David Dayen, independent contractors will be treated the same as employees, so, employers will pay a tax on their behalf. (Warren’s proposal has purposely expanded the definition of employee, to achieve this, regardless of what the Jacobin piece says.)

            What is your understanding?

            Hey, glad you’re still out here. ;-)

            STBE

            1. marym

              Hi. That was a fun place to comment. Below is a link to Sanders’ recent answer to that.

              “The fight right now is to get the American people to understand that we’re spending twice as much per capita, that of course, we can pay for it. We’re paying it now in a very reactionary, regressive way. I want to pay for it in a progressive way.”

              You probably know, but starting in 2020 no new enrollees for Plan F – people who currently have it can keep it. Good luck wherever you’re expat-ing to.

              https://www.thedailybeast.com/bernie-sanders-says-he-wont-release-a-plan-to-pay-for-medicare-for-all

    2. marym

      The Sanders M4A bill in the Senate (which Warren says she supports) and the Jayapal bill in the House provide comprehensive, not bare bones, care for everyone. There’s no need for supplements, variations like the different Medicare Advantage plans, or family plan considerations. The coverage issues you raise, though not relevant to M4A, would be relevant during whatever Warren is imagining for her 10 year (!) implementation, as they would be for any candidate proposing partial measures like a buy-in to the current Medicare, or incrementally lowering the eligibility age. As Lambert points out, original Medicare was implemented in one year. Since the bureaucratic framework is in place now, such an implementation should be the goal for M4A.

  26. marku52

    I will say, that this is progress that no longer is the leading !!!DEM!!! candidate tut-tutting and stating as a bald fact “Americans will never have civilized health care….”

  27. John has the answer

    When MMT – a law of the universe – becomes the law of the land, taxing the rich will be as easy as coining new money. Those down the income scale most hurt by inflation will be at the front of the line for a compensatory chunk of the new money. Those at the top watching their assets decline in value will spend money on lobbyists. Looks like we need to elect progressives.

  29. Portlander

    Lambert’s analysis is excellent, and so are many of the points in these comments. I also tend to agree that putting out these details has political pitfalls.

    BUT Warren has furthered a key message: yes indeed, it IS possible to accomplish Universal Coverage with no cost increase for the middle class (and of course, the poor as well). That’s all she needs to do at this point to answer the critics who say it CAN’T be done. Of course it can!

    She can deflect all of the carping and nit-picking by explaining that the tax details will be worked out in Congressional mark-ups. The bottom line is this: she won’t sign any health bill that imposes higher costs on regular folks. That is crucial.

    All this piling on Warren reminds me of the saying about “the perfect being the enemy of the good.” This is a promise she will carry with her for the rest of the primaries.

    I think we should be seeing Sanders and Warren as complementary, not rivals at THIS STAGE. She brings the head, he brings the heart. I don’t think it’s healthy for progressives to be piling on one or the other, but supporting both. If we do, we increase the chance that progressives will get a decent unifying candidate. But if progressives can’t unify, what hope is there?

    I suggest progressives instead focus on the empty promises of all of the other Democratic Party “moderates”. In one form or another they are proposing a variation on the public option, which Obama tried and failed to get insurance companies to accept. And giving space for these private companies to profit was a key pillar of Obamacare, so the public option had to go. All of these moderates pushing it again–as though a good public option and private options can co-exist–are therefore engaging in political fraud.

    So let’s focus on the Democratic Party fraudsters. Warren is not one of them.

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