Whatever her intentions, Elizabeth Warren’s plan to finance Medicare for All has made winning single-payer far more complicated than it should be — and jeopardized a wildly popular policy that should be a political slam dunk in the process.
By Tim Higginbotham for Jacobin
The question of how to pay for Medicare for All has always irked single-payer advocates, mostly because we’ve always known that paying for it is easy — the United States is the wealthiest country on earth, and we’re spending far more now than we would be under Medicare for All. The real obstacle is not the cost, as those immersed in the fight for single-payer understand well, but the battle we’ll need to wage against insurance companies, drug companies, and the political establishment in order to take public control over what’s rightfully ours.
Check the news, however, and you’d think the only reason we haven’t yet won Medicare for All is that nobody has figured out how to finance it. Media outlets frequently repeat political attacks on Medicare for All’s costs while ignoring all firm evidence about its benefits and inevitable savings. The question has gotten far more play in presidential debates than any concern about the insane profits of insurance and pharmaceutical companies, or the political establishment’s effort to bait-and-switch on the promise of universal health care by rallying around watered-down alternatives.
The narrative is completely wrong. Detailed economic studies have demonstrated a variety of options to fund the program through stable, progressive taxes while saving the vast majority of people money by eliminating all premiums and out-of-pocket spending. The media has happily amplified lies and bogus talking points about affordability and taxes to create a problem that quite simply isn’t there.
Nevertheless, Elizabeth Warren bowed to this line of attack and focused her policy team’s efforts on attempting to come up with a financing plan that fulfills her impossible promise to not raise middle-class taxes “one penny.” She finally released the plan on Friday. The result: a jumbled, politically difficult, and possibly unworkable approach that serves more as a reaction to criticism than a plan for actually achieving single-payer health care.
Medicare for All is plainly realistic in terms of sheer policy and numbers. There are no wonky details to work out to prove it is doable. The only candidate who seems to understand this — and to understand the massive fight winning Medicare for All will require — is Bernie Sanders. His approach for decades now has been to emphasize the program’s obvious affordability without getting suckered into debates about misguided policy questions, all the while rallying the working-class majority against the powerful interests standing in our way.
A Bad and Unserious Plan
Medicare for All is an urgent necessity. At least eighty-seven million people are uninsured or underinsured while tens of thousands die each year due to the inability to afford necessary care. As such, we need a shovel-ready plan that can be won (assuming the absolute ideal) in 2021, a president who will fight for it right off the bat, and, lastly, financing methods that will prove politically popular and stable. Warren’s plan comes up short on these accounts.
First, let’s look at its financing methods. Nearly two-thirds of the funds needed for Medicare for All already exists in current state and federal health care spending through Medicare, Medicaid, the VA, and the hundreds of billions in subsidies the government currently pays directly to private insurers. Warren acknowledges all of this, getting her most of the way there. She then applies taxes on the rich, quadrupling her sloganeered “two cents on the dollar” tax on billionaires to eight cents on the dollar. This is good, as is Warren’s correct argument that switching to Medicare for All will result in substantial administrative savings.
But in trying so hard to avoid direct taxes on the middle class, Warren’s team decided against a straightforward payroll tax in favor of a flat head tax on employers. Matt Bruenig of the crowd-funded think tank People’s Policy Project calls this approach “bad and unworkable.” Instead of taxing a certain percentage of an employee’s pay (a payroll tax), Warren’s head tax would charge employers a flat amount no matter the employee’s salary. Seeing as any employer-side tax ultimately comes out of workers’ potential earnings, this is a regressive approach that would disproportionately impact low- and middle-income workers.
Moreover, Warren’s head tax would exempt employers who classify their workers as independent contractors as well as businesses with fewer than fifty employees. This would encourage employers to reclassify employees and divide up their firms to avoid the tax, which would then require a larger tax to maintain revenue. This could potentially result in, as Bruenig says, a “death spiral” for the program.
Warren’s remaining financing methods bring us to the biggest problem with her plan: its clear lack of urgency. Warren argues that her plan for comprehensive immigration reform could free up $400 billion toward Medicare for All over ten years, while cutting the dangerous military slush fund will free up another $798 billion.
On their own these are important goals, but using major political fights like these to cobble together funding for Medicare for All is a fairly good tell that Warren’s plan is not designed to be implemented anytime soon. This is further evidenced by the language in Warren’s Medium post about her plan: she describes Medicare for All as a “long-term” goal seven times, while couching the rest of the post in similar language (such as saying she wants to move to a Medicare for All system “eventually”).
There’s a lot to be said for Bernie Sanders’s consistent Medicare for All advocacy, but one of the most important things to note is that he never describes Medicare for All as a “long-term” goal.
As Warren acknowledges, we can get most of the way toward paying for Medicare for All simply by transferring current public health care spending, getting rid of private insurance subsidies, adding direct wealth taxes, and through administrative savings. The rest will require some form of taxation, direct or indirect, on the broad “middle class.” We should not hide from this, as it will lower middle class spending overall. Dependable payroll taxes have allowed Social Security to remain relatively durable all these decades, while general taxation has made the National Health Service (NHS) the United Kingdom’s most politically popular institution.
We can easily pay for Medicare for All. Let’s reject the premise that financing it is our main fight.
Eye on the Prize
Warren’s rush to release a financing plan accentuates a key distinction between her and Sanders.
Warren is technocratic, proud of having a “plan for everything,” quick to assure supporters that once she sorts the numbers out, she can bring “big, structural change.” Such an approach keeps policy firmly in the hands of the mystifiers — the wonks of corporate-funded think tanks who persuade voters that, if trusted with power, they will solve all of our problems with no need for all that angry talk of revolution. It is worth noting that Center for American Progress — a notorious opponent of single-payer health care — is showing sudden enthusiasm for Warren’s plan.
Sanders, on the other hand, promises to serve as Organizer in Chief. He emphasizes “political revolution,” which he describes as millions of working people standing up to industries and billionaires, with politicians eager to bring their fight to the halls of power.
While he’s released a number of tax options to fund Medicare for All, and has been honest (unlike Warren) that it will require some form of general tax hike while still saving people money overall, Sanders has handwaved media queries as to whether he’ll release an itemized plan like Warren’s, saying simply: “I don’t think I have to do that right now.”
In refusing to take the bait on the bogus “how do we pay for it” question, Sanders remains focused on the real obstacles to victory. He takes every opportunity given to him to straightforwardly explain how Medicare for All will benefit Americans (unlike Warren, who rarely mentions it in her stump speech), while pointing his finger straight at those who have financial- and power-based interests in defeating his plan.
Put simply, Sanders is correct that winning Medicare for All requires a political revolution — not wonky pay-fors. With him in the White House, we have a fighting chance. With Warren, we shouldn’t hold our breath.