Opinion: Elizabeth Warren’s ‘Medicare for All’ Finances Don’t Add Up

Commentary

For any problem, Sen. Elizabeth Warren likes to say, “I have a plan for that.” Her plan to finance “Medicare for All” doesn’t add up. Not even close. Perhaps that’s why Warren is changing that plan.

Warren may deserve credit for trying. Sen. Bernie Sanders, who sponsored one of the Medicare For All bills, hasn’t tried to explain how he would pay for this transformation of the American health care system that would abolish private insurance. Voters associate Sanders much more with the idea.

Presidential candidates Warren and Sanders, however, are competing for the same ultra-liberal Democratic voters. Warren has been rising in the polls. So she didn’t merely embrace Medicare For All. She tried to own it.

But Warren’s math shows that the plan relies on unrealistic assumptions. Her calculations also undermine Sanders’ claim that even though taxes would rise for all Americans under Medicare For All, the middle class would come out ahead because they would save even more.

Based on a reading of Warren’s plan and several credible analyses, here are the numbers:

According to the left-leaning Urban Institute, Medicare For All would cost the federal government an additional $34 trillion over 10 years. Warren starts by claiming to reduce that number to $20.5 trillion.

To get there, Warren diverts $6.1 trillion that states now spend on health care. Getting that money could require a lawsuit. Then she relies on the first of those shaky assumptions.

Warren assumes that Medicare For All would reduce the cost of prescription drugs by $1.7 trillion. That’s far more than what outside analysts -- including those at the Urban Institute -- have concluded.

Warren also assumes that health care spending would slow by $1.1 trillion over those 10 years. Even though the rate of growth has slowed under the Affordable Care Act, Warren’s estimate assumes much more in savings.

She predicts a savings of $1.8 trillion from lower administrative spending without private insurance expenses. Again, that’s higher than other estimates. She assumes that payments to doctors and hospitals would decline by almost $3 trillion. But setting those lower rates would be a huge political fight, and providers who opposed them might stop seeing patients.

Problems continue with finding that $20.5 trillion in revenue. Warren starts with $9.8 trillion from companies with employees of at least 50 employees. That’s the money they spend now on Medicare Part A payments, with employees paying the other half.

From there, Warren has to scramble. She relies on $3 trillion from her 6 percent tax on the wealthiest Americans. But tax avoidance likely would reduce that amount, and Warren also has proposed spending revenue from that tax on other programs.

Warren further assumes that tougher tax enforcement would increase revenue by $2.3 trillion. That is 40 times higher than what the IRS estimates. She would seek more revenue from companies by repealing the corporate-friendly 2017 tax bill. Congress would have to act first.

For the rest, Warren would impose a tax on Wall Street, cut defense spending and reform immigration. She said immigration reform, which couldn’t even get a House vote in 2013, would save $400 million.

Linda Blumberg is a health economist with the Urban Institute. She co-wrote the group’s analysis of Warren’s math. “We felt we were making pretty optimistic, aggressive assumptions," Blumberg told The Washington Post. “They're making more optimistic, more aggressive assumptions.”

Indeed, Warren and Sanders both are being dangerously unrealistic. They contend that Medicare For All could offer more benefits than single-payer health care plans in other countries without any of the trade-offs that are aspects of those plans, such as longer waits to see some physicians and higher taxes.

You can see why Democrats want to campaign on health care. The issue helped them take the House last year. Americans regularly complain that their policies cost more but cover less.

Yet few support Medicare For All as Warren and Sanders envision it. Last February, a poll commissioned by The Hill newspaper found that only 13 percent of respondents wanted a single-payer program if it meant abolishing private insurance.

A better idea for those under 65 would be a “public option” -- government-run coverage that would compete with private plans. Some people might take the public option and buy a private, supplemental policy.

Warren now says that she would first seek to create that public option and to lower the Medicare age from 65 to 50. Not until the third year of her presidency would she “transition” to Medicare For All.

Warren’s change comes just before Wednesday night’s Democratic debate. It acknowledges that rival Pete Buttigieg has been gaining strength among moderate Democrats who want to build on the Affordable Care Act.

In contrast, Medicare For All is the health care equivalent of stopping a speeding car on I-95 by pulling the parking brake. It’s true that Republicans have only a bad plan on health care -- repealing the Affordable Care Act without a replacement. But the Democratic alternative should be a good plan, not Medicare For All.

Editorials are the opinion of the Sun Sentinel Editorial Board and written by one of its members or a designee. The Editorial Board consists of Editorial Page Editor Rosemary O’Hara, Sergio Bustos, Steve Bousquet and Editor-in-Chief Julie Anderson.

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