Elizabeth Warren's long-awaited plan to finance 'Medicare for All'

Image: Elizabeth Warren
Elizabeth Warren speaks at a campaign town hall meeting at the University of New Hampshire in Durham, N.H., on Oct. 30, 2019. Copyright Brian Snyder Reuters
By Benjy Sarlin and Ali Vitali with NBC News Politics
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The 2020 candidate promises "not one penny" in middle class tax increases.


Sen. Elizabeth Warren, D-Mass., released a detailed plan Friday that she says would fully fund a "Medicare for All" bill that would cover every American without premiums or deductibles while requiring "not one penny in middle-class tax increases."

Warren's campaign estimates her plan would keep combined public and private health spending "just under" $52 trillion over the next ten years, in line with projections under existing law, but would require the federal government to absorb over $20 trillion in spending. It seeks to use efficiency savings generated by Medicare for All to cover the uninsured at a similar total cost and add new benefits for dental, vision and long-term care.

"Medicare for All is about the same price as our current path — and cheaper over time," Warren said in a Medium letter. "That means the debate isn't really about whether the United States should pay more or less. It's about who should pay."

Warren places most of the revenue burden on businesses and the wealthy. 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.

Warren backs up her revenue and cost estimates with 44 pages of analysis from experts, including former IMF chief economist Simon Johnson, former Obama economic adviser Betsey Stevenson, Moody's chief economist Mark Zandi, and former Obama-appointed Medicare and Medicaid administrator Dr Donald Berwick.

At the same time, there's likely to be significant scepticism from outside experts about whether Warren could achieve the tens of trillions of dollars in revenue and savings targets that the plan calls for and whether its provisions would create unintended consequences for health care and the broader economy.

Politically, though, the hotly anticipated white paper should serve to quell critics and fellow 2020 opponents — at least temporarily — as it answers directly, and in detail, the latest prominent line of attack against her.

With her own answer now firmly in hand, Warren challenged those Democratic candidates who oppose Medicare For All to "put forward their own plan to cover everyone, without costing the country anything more in health care spending," adding a final counter: "We need plans, not slogans."

While Warren's plan promises "not one penny in middle-class tax increases," it does assume a reversal of President Donald Trump's tax cut — a move Warren previously had backed that would raise taxes on some middle-income families.

Her plan to raise $8.8 trillion through a tax on employers also generated criticism from some tax experts and 2020 rivals who argued that, regardless of its merits, it would be paid indirectly by workers and thus violated her claim not to raise middle-class taxes.

"For months, Elizabeth Warren has refused to say if her health care plan would raise taxes on the middle class, and now we know why: because it does," Kate Bedingfield, a spokesman for former Vice President Joe Biden's campaign, said in a statement. "Senator Warren would place a new tax of nearly $9 trillion that will fall on American workers.”

Warren's campaign, and some outside experts, argue it's effectively a substitution for the $9 trillion employers are already expected to pay toward health care in the same period, rather than a new tax.

"Workers already 'pay' this in wage-benefit tradeoff," Adrianna Mcintyre, a health policy writer at the Incidental Economist, tweeted.

Other sources of revenue include raising her wealth tax to 6 percent on fortunes over $1 billion, treating capital gains for the top 1 percent as earned income and requiring taxes to be paid annually, imposing $2.9 trillion in new taxes on corporations and foreign earnings and creating a new 0.1 percent tax on financial transactions.

Nicole Kaeding, vice president of policy promotion and an economist at the conservative National Taxpayers Union, said that while Warren's plan could potentially benefit middle-income households overall, its new taxes on corporations and businesses would be borne at least partially by employees and could constrain economic growth.

"Is she proposing to raise taxes on the middle class? I think the answer to that is yes," Kaeding said. "The second question is 'Are the middle class better off?' I don’t think we know the answer to that question yet."

Warren's plan also predicts $2.3 trillion in additional revenue from stepping up enforcement of existing tax laws, $400 billion from passing immigration reform and $800 billion in savings from ending the Overseas Contingency Operations fund, an emergency pool of defence spending that Warren argues should go through the regular budget process.

In writing her plan, Warren largely did not challenge outside cost estimates of Medicare for All by independent groups, but argued she would generate more savings with additional policy moves that go beyond what those groups analyzed, some of which fill in more details on the Medicare for All bill authored by Sen. Bernie Sanders, I-Vt.


Warren's proposal uses as a baseline a recent estimate by the nonpartisan Urban Institute that a similar Medicare for All plan that eliminates premiums and deductibles and adds coverage for vision, dental, and long-term care would add $34 trillion to the federal budget over ten years.

But Warren's campaign argues she would bring the cost down by an additional $14 trillion by redirecting existing public spending on health care, cutting overhead and negotiating lower prices for care.

Her plan suggests it would save money by reducing payments to physicians to Medicare rates, which tend to be significantly lower than private insurance, and to 110 percent of Medicare rates for hospitals, and instituting a variety of payment changes to encourage health providers to generate more savings.

The plan sets an ambitious goal of cutting Medicare drug prices by 70 percent for brand-name drugs and 30 percent for generics through a series of reforms. It would also require the new Medicare system to run with much less administrative overhead than the Urban Institute predicted would be necessary — 2.3 percent of total costs instead of 6 percent.

Perhaps more telling than the plan itself is the larger message Warren has tried to craft on the campaign trail in recent days, painting the health care issue as one that will provide a clear distinction in the general election. Campaigning in Durham, New Hampshire, on Wednesday, the Massachusetts senator cast 2020 as a fight “between the people who think health care should be reserved for those who are rich and the rest of us who think health care should be there for every American.”


House Speaker Nancy Pelosi, D-Calif., said in an interview on Bloomberg Friday that while she welcomed the health care debate taking place among the 2020 contenders, she is "not a big fan" of Medicare for All.

She noted that the House has invited advocates to testify before the various committees and been "respectful of the point of view."

"But it is expensive, who pays is very important, what are the benefits that come in there?" Pelosi said. "So I would think that hopefully, as we emerge into the election year, the mantra will be more, 'Health Care For All Americans,' because there is a comfort level that some people have with their current private insurance that they have, and if that is to be phased out, let's talk about it, but let's not just have one bill that would do that."

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