Buzz
Healthcare reform dominated the discussion on many Democratic presidential debate stages this summer. A number of candidates, including Senators Elizabeth Warren and Bernie Sanders, have advocated for Medicare for All, where the government would take responsibility for providing healthcare coverage.
However, implementing this plan would come with significant costs, and not all candidates have been transparent about how to fund it. Until recently, Elizabeth Warren was one of those whose funding details were unclear.
Warren's proposal has now been unveiled in a detailed Medium post, where she explains her approach to improving upon the Medicare for All Act that Sanders introduced earlier this spring.
Under my proposal, Medicare for All will encompass all the benefits listed in the Medicare for All Act, including long-term care, dental, vision, and hearing coverage. It will ensure that every person in the U.S. is covered, with practical reforms to the payment system, making Medicare for All feasible without exceeding current healthcare spending levels.
Warren’s enhanced version of Medicare for All proposes universal health and long-term care coverage for all Americans, without the restriction of staying within a provider network. Over the next decade, the total cost would be $52 trillion. So, where does the funding come from?
According to Warren and her Medicare for All research team, $31.5 trillion would be sourced from existing federal and state healthcare budgets that are already allocated.
The remaining $20.5 trillion would be raised through a combination of “targeted spending cuts, new taxes on major corporations and the wealthiest 1% of Americans, as well as cracking down on tax evasion and fraud,” Warren explained.
Warren assures there would be “no increase in middle-class taxes.” In fact, she claims her plan would put $11 trillion—currently spent on insurance premiums and out-of-pocket medical costs—back into the pockets of taxpayers.
But how do you even raise $20.5 trillion? Here’s the simplified version of Warren’s breakdown:
$8.8 trillion: Employers who provide healthcare coverage would still contribute, but it would be in the form of an Employer Medicare Contribution.
Warren suggests that employers calculate their average healthcare spending per employee, adjust it for the national rise in healthcare costs, multiply it by the total number of employees, and then pay 98% of that amount annually. The reason for 98%? Warren explains that it ensures every company spends less on healthcare than they do currently. Small businesses with fewer than 50 employees and self-employed individuals below a certain income level would be exempt. If Medicare revenue from employers falls short, larger companies would be required to make a Supplemental Employer Medicare Contribution.
$250 billion: Currently, out-of-pocket healthcare costs that exceed 10% of your adjusted gross income can be deducted from your taxes. Warren believes this won’t be necessary under her plan.
$1.4 trillion: With all the money currently spent on healthcare now flowing back into our hands, our higher incomes will be taxed as usual.
$2.3 trillion: Strengthen IRS tax enforcement efforts to recover taxes lost through evasion and fraud.
$800 billion: Impose a small tax on financial transactions—one-tenth of a percent—on the sale of bonds, stocks, or derivatives, targeting financial firms.
$100 billion: Introduce a 'risk fee' for the 40 largest banks in the country.
$1.25 trillion: Revise the way businesses account for the depreciation of assets.
$1.65 trillion: Implement a 35% minimum tax on corporations' foreign earnings in each country where they operate, and apply taxes to foreign companies based on their U.S. sales.
$1 trillion: Impose a tax on billionaires, charging them six cents for every dollar of net worth exceeding $1 billion.
$2 trillion: Tax capital gains income annually, with higher rates for the wealthiest 1%.
$400 billion: Overhaul immigration policies and redirect the resulting savings towards healthcare.
$798 billion: Cut defense spending and withdraw troops from Afghanistan, Iraq, and Syria.
That’s the plan. Expect it to be a key topic in the next Democratic presidential debate, the fifth one scheduled for Nov. 20.
