Elizabeth Warren announces $20-trillion Medicare for All proposal

WASHINGTON — Ending her months-long silence on how to pay for moving the entire nation into a government-run health care system, Elizabeth Warren on Friday laid out a detailed plan that relies on trillions of dollars in new taxes on the rich and corporations, big pay-ins from employers and aggressive cost cutting.

With her proposal, Warren becomes the first of the Democratic candidates to fully describe how a Medicare for all plan would be paid for. Her chief rival on the party’s left, Sen. Bernie Sanders of Vermont, who has campaigned in favor of a government-run medical plan for years, has outlined various options for financing, but has not committed to one.

Warren argues in her plan that America could do away with private insurance — entirely eliminating premiums, deductibles and co-payments — and move everyone into a single-payer system without sacrificing care and without hiking taxes on the middle class.

“When fully implemented, my approach to Medicare for All would mark one of the greatest federal expansions of middle class wealth in our history,” Warren wrote in a Medium post describing her plan. She vowed the single-payer system could be achieved “without a tax increase on the middle class – and, in fact, without any increase in income taxes at all.”

Warren maintains that a single-payer, Medicare for all system could cover everyone in the U.S. and provide expanded benefits, including long-term care, for roughly what the country is currently slated to spend on health care — about $52 trillion over the course of a decade.

Covering more people with more benefits for the same amount of money would require holding down the amounts paid to doctors and hospitals, limiting doctors to the amount currently paid by Medicare and hospitals to slightly above current Medicare rates.

And even if overall costs do not increase, government spending would surge under the Warren plan, to cover the costs currently generated by premiums and out-of-pocket costs for families. The tab to the federal government would be more than $20 trillion over the next decade —roughly a one-third increase in the total federal budget.

Instead of income tax hikes, Warren would cover nearly half that cost by collecting $9.1 trillion in additional taxes from corporations and high-income families over the next 10 years.

The amount would eclipse the wealth tax Warren has earlier proposed to fund such things as student debt relief and free public college. Several liberal economists have already warned the wealth tax might only generate a fraction of the revenue she envisions.

Warren would cover much of the rest of cost by requiring employers to continue paying, on average, what they currently pay to cover their workers. Instead of paying an insurance company, however, they would pay the government. Their bill would be tallied based on their average spending on employee health insurance over the last few years.

Warren argues the obligation is less onerous than what those employers currently face, as they would be shielded from existing runaway health care price increases; costs would not rise faster than inflation under her plan.

“We can generate almost half of what we need to cover Medicare for All just by asking employers to pay slightly less than what they are projected to pay today,” Warren wrote.

The new taxes and the payment cuts for doctors and hospitals almost certainly will provide fresh lines of attack for Warren’s opponents as she moves to lock down her place as a front-runner in the final stretch before voting begins in February, starting with the Iowa caucuses.

Warren’s tax proposals include a substantial increase in her wealth tax, aimed largely at billionaires.

A new, annual capital gains tax would be billed to the richest 1% of Americans. Warren called for several trillion dollars of new taxes on financial firms and large corporations. They include rolling back the tax cuts signed into law by President Trump, but also go far beyond that.

Among the new taxes would be one on financial transactions, with levies collected as stocks and bonds are bought and sold. Large financial institutions would pay a new “systemic risk fee.” Corporations would lose trillions of dollars of tax deductions they are currently eligible to claim, and firms that move their profits abroad would be targeted with substantial new levies on the overseas money.

To collect all of this money — and trillions more Warren argues could be collected under current law if tax enforcement were adequate — the senator is arguing for a significant expansion of the Internal Revenue Service.

“The wealthy and their allies in Washington have worked to slash the IRS budget, leaving it without the resources it needs,” Warren wrote. She argued that the “tax gap” in the U.S., the money that is currently owed the IRS but is going unpaid and uncollected, is substantially larger than it is in other wealthy nations, such as the United Kingdom.

Yet most every element of her plan — from expanding the IRS to putting cost controls on health care to vastly expanding taxes on the rich — would be almost certain to face stiff resistance in Congress. The plan would be a historic political lift.

As Warren has with her other plans, she presented this one with a stamp of approval from pedigreed experts in the field. Among those who vetted Warren’s revenue projections were Simon Johnson, the former chief economist at the International Monetary Fund.