Last week, after a long wait, Sen. Elizabeth Warren released her latest plan: how to pay for her proposed “Medicare for All” program.
Sen. Warren contends that she can create the $52 trillion dollar plan and not raise taxes on the middle class. Warren would end private health insurance for 160 million and the financing scheme she proposes won’t be enacted for one simple reason: even in this superficial age, it doesn’t pass the smell test.
Warren’s plan was softly criticized by her main Democratic rivals - former VP Joe Biden and Mayor Pete Buttigieg - while Bernie Sanders was largely muted in his response. Donald Trump won’t be so reserved.
Let’s look at Sen. Warren’s projected 10-year cost for her plan.
She says that after netting out what federal and state governments are currently projected to pay over the next 10 years for Medicare and Medicaid, there remains $30 trillion to be financed. She projects significant savings under the heading of “comprehensive payment reform” and projects a reduction in payment rates which hospitals and other providers currently receive from private health insurers.
It is well-documented that hospitals and doctors receive higher payments from private health insurance plans than they do from Medicare and Medicaid. Reducing provider payments to just above the Medicare rate will hurt doctors and thrust many hospitals into the red; Warren ignores this.
Then she blithely assumes that she will utilize “global budgeting and management reforms” to reduce costs further. These are code words for rationing health care. It is no secret that every nationalized healthcare system utilized across the globe ration’s care in order to make it fit into fixed budgets. Warren guarantees that health-care rationing is in our future, but she won’t say so.
Proponents of ending private health insurance completely ignore the fact that putting everyone into one massive federal health insurance plan, will result in yearly funding fights in Congress. Given the inability of Congress to enact budgets in recent decades one can hardly be sanguine about subjecting all national healthcare spending to the annual congressional budget process.
Warren also proposes importing foreign drug price controls to the U.S., undoubtedly reducing incentives for new drug development. This will surely disappoint those hoping for new drugs to cure Alzheimer’s, cancer and a host of other serious maladies.
She would also force employers to fork over close to $9 trillion, representing what employers currently pay for employee health insurance. So, employer costs aren’t actually going to be eliminated.
She has other taxes she’d raise too; the 21% corporate tax rate, adopted in 2017 to make U.S. rates internationally competitive, would be hiked back to 35%. Warren would also reinstitute a world-wide earnings tax on U.S. companies, which would incentivize companies to move operations overseas and keep profits earned abroad away from our shores. Warren’s plan will therefore export American jobs and make our global companies less competitive.
Warren also promotes class warfare in her plan. On top of the unconstitutional wealth tax which she has already proposed to fund free college, eliminate student loan debt and no-cost childcare, the Massachusetts Senator would add yet another wealth tax, this time on capital gains which haven’t yet been realized. So if a wealthy person holds a stock which has appreciated in value, but has not yet sold that stock, Warren would now tax unrealized capital gains. Such a gambit would undoubtedly depress overall stock values and wouldn’t just affect the wealthy. Everyone with retirement savings in a 401k or 403b pension plan would be hurt.
Lastly, Sen. Warren for good measure would cut defense by $800 billion which will appease some in her base, but would leave the U.S. demonstrably less secure.
Meanwhile, independent budget experts at the Committee for a Responsible Federal Budget say it is impossible to enact a $30 trillion Medicare for All plan without significant middle class tax increases. They estimate the true cost of Medicare for All would require doubling individual and corporate taxes or cutting all other federal spending by 80%.
In other words, Sen. Warren can’t achieve her single-payer health plan without dramatically increasing taxes on everyone, including the middle class. Why she contends otherwise is a mystery. But, after all, Sen. Warren is the person who spent many years falsely claiming minority status as a Native American. I suspect her dubious claim of ethnic heritage won’t do her campaign nearly as much damage as her healthcare funding scheme.
Former Representative John Faso of Kinderhook represented New York's 19th House district in the 115th Congress.
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