The Big Tax and Health-Care Takeaways from the Dem Debate

The Big Tax and Health-Care Takeaways from the Dem Debate

Printer-friendly version
Plus, a cheaper way to provide universal health coverage? 
Wednesday, October 16, 2019

A Cheaper Way to Provide Universal Health Coverage?

With Democrats debating a variety of ways to expand access to health care and President Trump promising a “phenomenal” plan at some point in the future, it’s a good bet that there could be significant changes ahead for the U.S. health care system. The leading Democratic presidential candidates have been spending a lot of time discussing the relative merits of Medicare for All, but that’s just one of several options that are currently under consideration by lawmakers and policy experts.

A team of researchers from the Urban Institute released a study Wednesday that examines different plans for reform. The researchers modeled eight different health care reform plans, ranging from relatively modest changes to the Affordable Care Act to the introduction of a public option to a government-run Medicare-for-All plan. Among other things, they found that it’s possible to deliver universal healthcare without ripping up the current system or driving federal expenditures dramatically higher all at once.

Here are some highlights from the report:

  • Medicare for All would cost $34 trillion over 10 years. An “enhanced” Medicare-for-All plan that covers everyone in the country (including undocumented immigrants) and offers more benefits than the current system, including dental, vision, hearing and long-term services and supports, would raise national spending on health care by nearly $3 trillion in 2020 and $34 trillion, or $32 trillion after tax offsets, over 10 years. Employer spending on health care would decrease by $955 billion, and household spending would fall by $887 billion, but $2.7 trillion in additional federal revenue would be needed to finance the new program. “It is a big lift to get this kind of money, for sure,” John Holahan, one of the report’s authors, told the Associated Press.
  • A “lite” Medicare-for-All plan would cost roughly $17.6 trillion over 10 years. A plan that includes some out-of-pocket expenses based on income and a less generous set of expanded benefits would cost about half of the enhanced version. This plan, which would cover all legal residents in the U.S. but not the 10.8 million undocumented immigrants in the country, would reduce national spending on health care by about $209 billion in 2020. Federal spending would increase by $1.5 trillion in the first year, but total health-care spending would fall by about $210 billion as a result of lower provider payment rates and administrative savings.
  • Medicare for All isn’t the only path to universal coverage. One of the plans in the report, involving a mix of private and public health insurance, would cover everyone in the U.S. except for 6.6 million undocumented immigrants. The plan would beef up Obamacare subsidies, expand Medicaid to all states, provide a public option and cap payment rates. Federal spending would increase by $122.1 billion if implemented next year and by $1.5 trillion over 10 years, but total national health spending would fall by $22.6 billion in 2020.

Sara Collins, a vice president at the Commonwealth Fund, which funded the study, said that report shows that universal health care coverage “can be reached in different ways” – and, we should add, with very different costs.

For the full analysis, which includes many of the difficult details confronting any reform effort, see the Urban Institute’s report. For more on the subject, see these analyses by the Kaiser Family Foundation and The New York Times from earlier this year.

Chart of the Day: Drug Spending

A new infographic from the Kaiser Family Foundation and the JAMA Network explores public attitudes toward prescription drug prices. The snippet below shows the basic underlying trend for drug spending, which rose much faster than overall health care spending during the 20-year period from 1997 to 2017. The Kaiser analysts say there is broad public support for taking steps lower drug costs, and that the public sees pharmaceutical company profits as a top contributor to high costs in the health care system.

Your 2-Minute Summary of Tuesday’s Medicare-for-All Debate, and Why It Matters

Tuesday night’s Democratic presidential debate once again highlighted the candidate’s deep divides over Medicare for All. After opening questions related to the House impeachment inquiry into President Trump, the debate quickly turned to the health care reform plan backed by Senators Elizabeth Warren and Bernie Sanders.

Warren again tried to reframe the question of whether she would raise middle-class taxes to pay for the plan. “Costs will go up for the wealthy. They will go up for big corporations. And for middle-class families, they will go down,” she said. “I will not sign a bill into law that does not lower costs for middle-class families.”

Pete Buttigieg, who last month called Warren “extremely evasive” on the tax question, pounced. “No plan has been laid out to explain how a multi-trillion-dollar hole in this Medicare for all plan that Senator Warren is putting forward is supposed to get filled in,” he said, touting his “Medicare for All Who Want It” proposal as a better alternative. “I don't understand why you believe the only way to deliver affordable coverage to everybody is to obliterate private plans, kicking 150 million Americans off of their insurance in four short years,” he said to Warren. “Why unnecessarily divide this country over health care when there's a better way to deliver coverage for all?”

Warren jabbed back at Buttigieg, saying his “Medicare for All Who Want It” plan is really “Medicare for All Who Can Afford It.”

Joe Biden and Amy Klobuchar, both of whom support building on the Affordable Care Act with a public option, also attacked Medicare for All as expensive and impractical. “The difference between a plan and a pipe dream is something that you can actually get done,” Klobuchar said. “And we can get this public option done.”

Sanders defended his plan — and opened the door for further attacks on Warren. “At the end of the day, the overwhelming majority of people will save money on their health care bills,” Sanders said. “But I do think it is appropriate to acknowledge that taxes will go up. They're going to go up significantly for the wealthy. And for virtually everybody, the tax increase they pay will be substantially less than what they were paying for premiums and out-of-pocket expenses.”

Klobuchar took the opportunity to criticize Warren again. “At least Bernie is being honest here, and saying how he’s going to pay for this and that taxes are going to go up,” she said. “And I’m sorry, Elizabeth, but you have not said that, and I think we owe the American people to tell them where we will send the invoice.”

A political strategy: The attacks on Warren are widely seen as a sign that she’s now the Democratic frontrunner — and they’re likely a sign that, as tiresome as the repeated tax question might get, Warren is going to keep getting asked it by the media, Democratic rivals and Republicans. She’s pointedly not willing to answer directly (or take the bait) and say that she will raise taxes, even as she continues to argue that overall costs under Medicare for All will go down for the middle class. Her caginess on the question suggests she thinks that higher taxes on the middle class, or the very word “taxes,” might be toxic in an election campaign against Trump. But her dodging hasn’t hurt her so far.

What the polls say: The latest Kaiser Family Foundation tracking poll found that 51% of those surveyed favor Medicare for All, while 47% oppose it. A majority of Democrats and about half of independents support a national Medicare-for-all plan, while more than 70% of Republicans oppose the idea. Suport for a public option is higher, at 73%. A CBS News poll released Tuesday found that 59% of voters believe that a government-run plan should "compete with private insurance" as under a public option, while 32% said they would want it to replace private insurance. But polls have also found that support for Medicare for All or other health plans can shift significantly depending on the arguments presented.

The bottom line: Larry Levitt of the Kaiser Family Foundation reminds us that there is no simple answer to the question of ultimate costs, and that a wide variety of outcomes are possible depending on how Medicare for All is implemented. “A Medicare for all plan could be designed so that many people, including those who are middle class, pay less in taxes than they are paying now in premiums, deductibles, and copays,” Levitt tweeted Tuesday. “It depends entirely on the details.”

Moderate Dems (Cautiously) Critique Warren Wealth Tax

Moderate Democrats also battled with Warren and Sanders over their proposals for a wealth tax. Both Warren and Sanders have proposed to heavily tax the rich to address inequality and pay for new social programs — and some of their Democratic rivals said they were open to the idea but thought other plans would work better.

“Two years ago, nobody was talking about wealth taxes. And now it’s the core new idea that everybody at least has to respond to, if not adopt, on the Democratic side,” Michael Linden, a tax expert at the left-leaning Roosevelt Institute told The Washington Post.

Here’s what other candidates said about the idea.

Buttigieg: “I'm all for a wealth tax. I'm all for just about everything that was just mentioned in these answers. Let me tell, though, how this looks from the industrial Midwest where I live. Washington politicians, congressmen and senators, saying all the right things, offering the most elegant policy prescriptions, and nothing changes.”

Tom Steyer (a billionaire himself): “I was one of the first people on this stage to propose a wealth tax. I would undo every Republican tax cut for rich people and major corporations. But there's something else going on here that is absolutely shameful, and that's the way the money gets split up in terms of earnings. As a result of taking away the rights of working people and organized labor, people haven't had a raise — 90 percent of Americans have not had a raise for 40 years.”

Klobuchar: “It could work. I am open to it. But I want to give a reality check here to Elizabeth, because no one on this stage wants to protect billionaires. Not even the billionaire wants to protect billionaires. We just have different approaches. Your idea is not the only idea. … I would repeal significant portions of that [Trump] tax bill that help the rich, including what he did with the corporate tax rate, including what he did on international taxation.”

Andrew Yang: “Senator Warren is 100 percent right that we're in the midst of the most extreme winner-take-all economy in history. And a wealth tax makes a lot of sense in principle. The problem is that it's been tried in Germany, France, Denmark, Sweden, and all those countries ended up repealing it, because it had massive implementation problems and did not generate the revenue that they'd projected. … Instead, we should look at what Germany, France, Denmark, and Sweden still have, which is a value-added tax.”

Beto O’Rourke: “I think [a wealth tax is] part of the solution. But I think we need to be focused on lifting people up. And sometimes I think that Senator Warren is more focused on being punitive and pitting some part of the country against the other instead of lifting people up and making sure that this country comes together around those solutions.”

Julian Castro: “I believe that wealth and equality tax, as I've proposed, is part of the answer, but also I've proposed an inheritance tax, raising the top marginal tax rate and investing in things like universal childcare and affordable housing.”

Warren responded to her critics on the stage by saying she’s “shocked” that anyone thinks she’s punitive, adding that she’s just asking those who make it to the top 0.1% to “pitch in two cents so every other kid in America has a chance to make it.” And she argued that raising income tax rates wouldn’t work as well as taxing wealth: “The really, really billionaires are making their money off their accumulated wealth, and it just keeps growing.”

Number of the Day: 0

The Campaign to Fix the Debt notes that, of the 374 questions that have been asked in the four Democratic presidential debates so far, none have been about the national debt or the financial health of programs including Social Security. More surprising, perhaps: Moderators didn’t ask about climate change or immigration at Tuesday night’s debate.


Views and Analysis