Elizabeth Warren Finally Says How She'll Pay for Medicare for All

Democratic presidential hopeful Senator Elizabeth Warren rolled out a wide-ranging menu Friday to fund her multi-trillion-dollar Medicare for All plan, a defining moment that fleshes out her vision to remake one-fifth of the U.S. economy.

The plan would redirect most employer-based health care spending to the government so it can put all Americans into Medicare, while slapping a wave of taxes on large corporations and the wealthy, cracking down on tax evasion, reducing defense spending, and putting newly legalized immigrants on the tax rolls.

Her advisers also lowered the estimate of Medicare for All’s price-tag to $20.5 trillion over 10 years from the $34 trillion the Urban Institute predicted, by using the new Medicare-for-All negotiating power to slash administrative spending, drug prices and provider payments.

The proposals stake out Warren’s clearest position yet on a deeply divisive issue of paramount importance for voters. Rather than devise a health-care plan of her own, she made the strategic decision to adopt that of fellow progressive candidate, Senator Bernie Sanders, but until now, hasn’t said how she’d pay for it.

That’s prompted harsh criticism from her moderate rivals, including former Vice President Joe Biden and Mayor Pete Buttigieg, who propose adding a public option for people who don’t have private health insurance. They’ve insisted Warren will have to raise taxes on middle-class Americans. She insists that’s unnecessary.

“Medicare for All puts all health care spending on the government’s books,” the Massachusetts senator wrote in a medium.com post. “But Medicare for All is about the same price as our current path -- and cheaper over time. That means the debate isn’t really about whether the United States should pay more or less. It’s about who should pay.”

Warren’s funding mechanisms break down into six categories. She’d raise $8.8 trillion by redirecting 98% of current employer-based health insurance spending to the government. She’d raise $1.4 trillion through the tax revenue generated by the higher incomes of workers who no longer have to pay an insurance premium. She’d add $6.8 trillion through new taxes on financial firms, corporations and the top 1% of earners.

She’d bring in $2.3 trillion through stricter foreign tax compliance, instituting a country-by-country minimum tax on foreign earnings of 35% -- equal to a restored top corporate tax rate for U.S. firms -- and forbidding deferrals of those payments. She’d raise $400 billion by legalizing undocumented immigrants and requiring them to pay taxes. And she’d find $800 billion by scrapping the Overseas Contingency Operations fund, an accounting gimmick used by both parties to count unspent defense money as savings.

Sanders, the author of the health care bill Warren backs, has said the plan would require higher middle-class taxes while insisting that those people would come out ahead due to the elimination of premiums and out-of-pocket costs. Sanders’ bill envisions cutting the Medicare reimbursement for health providers.

The $20.5 trillion estimate comes from Donald Berwick, former administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, and the International Monetary Fund’s former chief economist Simon Johnson.

“There have been many estimates about what the cost would be and many different payment streams,” Warren told reporters on her most recent trip to Iowa. “I’ve been working on how to give the exact details to make that work.”

Warren is in second place to Biden in the RealClearPolitics average of national Democratic primary polls for 2020. She leads narrowly in Iowa and New Hampshire, which hold the first two nominating contests.

The release of her plan comes on the eve of the Iowa Democratic Party Liberty and Justice Celebration, a longstanding tradition in the first-in-the-nation nominating contest that’s well-attended by presidential hopefuls. The timing is aimed at preventing an onslaught of attacks at the Iowa event, though her rivals are sure to debate the numbers.

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