Against Sen. Warren’s and Sanders’s Healthcare “Plans”

Finn Dusenbery
Nov 4 · 4 min read

I consider myself liberal, but I sometimes feel conservative. Many of my peers, millennial voters, favor the “progressive” Democratic candidates for President, namely, Elizabeth Warren and Bernie Sanders, rather than “establishment” or “centrist” candidates. Many of them believe that Elizabeth Warren and Bernie Sanders are ideologically pure and morally courageous, perhaps because they have proposed policies like “Medicare-for-all,” and that anyone who disagrees with such a policy is “afraid of big ideas,” as Sen. Sanders puts it. But is it moral or virtuous to propose a plan that cannot work? Sen. Warren’s plan is financially impossible and Sen. Sanders has refused to even explain how he would fund his. Both candidates are either willfully blind to the fact that their plans are not viable or, more likely, intentionally trying to deceive voters.

A liberal think tank called the Urban Institute recently estimated that a single-payer plan like Sen. Warren’s or Sen. Sanders’s would require $34 trillion in new federal spending over the next decade. However, Sen. Warren has estimated that the cost of her plan will be $20.5 trillion, based on a number of seemingly unlikely assumptions, including that Medicare-for-all will operate with much lower administrative costs than estimated by even the Urban Institute, that health spending will increase more slowly under her plan than the federal government currently estimates, and that her plan will pay hospitals at a rate that would result in some of them operating at a loss, as private insurers pay much more than Medicare. Megan McArdle at the Washington Post has written that Sen. Warren’s $20.5 trillion figure is “a quarter to a third less than any serious estimate of [a Medicare-for-all plan] from outside her campaign.”

Sen. Warren’s proposed funding for her plan is also problematic. The plan calls for an additional wealth tax on billionaires of 6 percent (greater than the 3% she had initially proposed, indicating that the numbers in Sen. Warren’s plans are perhaps not as well-considered as she would have us believe), a cut to defense spending of $800 billion, and $400 billion of new tax revenue from immigrants once her immigration plan is passed. But a wealth tax may be ineffective because it is difficult to accurately measure the value of wealth and illiquid assets and because of tax evasion schemes, such as low appraisals, which, according to the economist and former treasury secretary Larry Summers, could allow tax avoidance on something close to 60% of wealth. Respecting the revenue from the cut to defense spending and the passage of an immigration bill, it seems difficult to imagine why Congress would act in one fell swoop to reform healthcare, defense spending, and immigration all at once, especially when Republicans control the Senate.

Sen. Warren would additionally fund her plan by requiring certain employers to pay fees to the federal government instead of paying for employees’ health insurance premiums, raising an estimated $8.8 trillion, and requiring state and local governments to divert the approximately $6 trillion they currently spend on Medicaid and the Children’s Health Insurance Program to the federal government. But requiring employers to pay fees to the federal government instead of paying for health insurance premiums may amount to an unconstitutional ex post facto taxation of health benefits and requiring states and local governments to divert money to the federal government may be unconstitutional under the anti-commandeering doctrine. A successful court challenge would be devastating to Sen. Warren’s plan.

As for Sen. Sanders, in an interview with CNBC, he refused to explain how he would pay for his Medicare-for-all plan:

John Harwood: One of the constraints has been fiscal. Senator Warren is producing plans to pay for Medicare-for-all. You’ve identified revenue sources for about half of it. Do you think it’s important to identify revenue sources for the other half? Or do you believe, as those who subscribe to modern monetary theory believe, that we’ve been a little bit too constrained by concerns about the deficit?

Bernie Sanders: We’re trying to pay for the damn thing. At a time of massive income and wealth inequality, it is my view that the wealthiest people in this country, the top 1/10th of 1% should be paying substantially more than they’re paying right now. You have an insane situation. Let my Wall Street friends there tell me why it makes sense. …

John Harwood: But you still have more revenue to go to make it fully paid for, yes?

Bernie Sanders: The fight right now is to get the American people to understand that we’re spending twice as much per capita, that of course, we can pay for it. We’re paying it now in a very reactionary, regressive way. I want to pay for it in a progressive way.

You’re asking me to come up with an exact detailed plan of how every American — how much you’re going to pay more in taxes, how much I’m going to pay. I don’t think I have to do that right now.

John Harwood: You think it’s foolish that Senator Warren is trying to?

Bernie Sanders: I’m not saying it’s foolish. All that I’m saying is that we have laid out a variety of options that are progressive. We’ll have that debate. At the end of the day, we will pay for every nickel of Medicare-for-all, and it will save the overwhelming majority of the American people, who will no longer pay premiums.

Perhaps it is easier to whip up crowds by calling for Medicare-for-all and promising every voter quality healthcare coverage rather than proposing a nuanced, realistic healthcare plan that attempts to address the issues we are facing. Perhaps it is easier to propose an ideologically pure plan rather than grapple with the details of a complex subject like healthcare. In my view, we should not respect or reward this kind of politics, though. In my view, there is more virtue and courage in acknowledging what can be done and then setting out to do it rather than proposing a pipe dream that will never lead to any results.

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