The Staggering Cost of Health Care for US Households

The Staggering Cost of Health Care for US Households

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Plus - Elizabeth Warren will show her math
Monday, October 21, 2019

Warren Says She’ll Explain How to Pay for Medicare for All

Under pressure from competitors and journalists covering the Democratic presidential nomination race, Elizabeth Warren said Sunday that she would release details “over the next few weeks” to explain how she intends to finance her Medicare-for-All proposal.

“Every single person who is running for president of the United States on the Democratic side right now knows that families are getting crushed by the cost of health care,” Warren said Sunday at a campaign event in Iowa. “They also know that the cheapest possible way to make sure that everyone gets the health care that they need is Medicare for All. … What I see, though, is that we need to talk about the cost. And I plan over the next few weeks to put out a plan that talks about, specifically, the cost of Medicare for All and, specifically, how we pay for it."

Warren has endorsed Bernie Sanders’ sweeping proposal for Medicare for All, but unlike the senator from Vermont, she has avoided talking about how she’d pay for it. Instead, she has argued that middle-class households would be better off in the end due to the elimination of health care premiums and other medical expenses. “I will not sign a bill into law that does not lower costs for middle-class families,” Warren vowed at the Democratic debate last week.

Critics keep up the pressure: Even as Warren announced her plans, the Biden campaign continued to hammer away at her avoidance of the issue thus far, echoing complaints from other candidates. "It's mystifying that for someone who has put having a plan for everything at the center of her pitch to voters, Senator Warren has decided to release a health care plan only after enduring immense public pressure for refusing to do so,” said T.J. Ducklo, a spokesman for Joe Biden. "We hope her plan will be straight with the American people about how much middle class taxes will go up to pay for the $30+ trillion it will take to fund Medicare for All."

But money isn’t the only issue: Ernie Tedeschi of Evercore ISI said that while the debate over how to pay for Medicare for All is critical, the more fundamental problem is how to shift funds currently flowing through the health care system from a variety of sources onto the federal government’s budget. “Paying for M4A is a challenge of mechanics (shifting a large share of the money the US economy currently devotes to health care from one pocket to another), not capacity,” he wrote Sunday. “It's an important debate to have but not nearly the only or most important one.”

Tedeschi provided this illuminating chart that shows what a Medicare for All budget would have looked like in 2019, according to estimates from the RAND Corporation. Overall national health care spending is roughly similar, but the sources of the spending are quite different, with the federal budget carrying most of the load. “In some ways, the sheer size of [Medicare for All] makes the financing debate a bit... uncreative,” Tedeschi wrote. “Basically, the federal government has to raise $1.8-2.4T a year. Even with higher household income from no premiums and lower [out of pocket] costs, there are only so many ways it's possible to do that.”

Buttigieg Would Hike Corporate Taxes to Pay for His Health Plan

Pete Buttigieg has proposed a “Medicare for all who want it” plan, which would allow Americans to buy into the Medicare system while leaving the private insurance system in place. This past weekend he said that funding for his roughly $1.5 trillion proposal would come from raising the top corporate tax rate from 21% to 35% – the same level it was before the Republican tax cuts were passed in 2017.

Speaking on NBC’s “Meet The Press,” Buttigieg said that “the vast majority” of the cost of his proposal could be paid for “by rolling back the corporate tax rate cut portion of the Trump tax cut,” a move that would raise $1.4 trillion, according to the non-partisan congressional Joint Committee on Taxation.

Buttigieg also wants to empower Medicare to negotiate drug prices and cap out-of-pocket costs, according to Bloomberg’s Sahil Kapur.

Chart of the Day: The Health Care Burden Now

Larry Levitt of the Kaiser Family Foundation tweeted this chart Monday from the Peterson-Kaiser Health System Tracker, writing, “A middle-class family of four with employer insurance now spends an average of $12,500 per year on health care. Their employer kicks in an additional $13,050 in premiums.” For more details, see the household health spending calculator

Quote of the Day: The Problem with Universal Health Care

“I’d rather take care of my own self with tape than be stuck in a system where I pay for everyone else.”

— Unnamed Florida man speaking to Darlena Cunha, a freelance journalist writing in The New York Times Monday. Cunha says the man told her that he “once duct-taped a cut on his arm because he couldn’t afford stitches,” but preferred that outcome to a universal health care system in which undeserving people would receive care at his expense.

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Warren Proposes to Increase Spending on Public Education by $800 Billion

Sen. Warren released an education plan Monday that calls for raising federal funding for public schools to $450 billion over 10 years, roughly four times current levels, according to Bloomberg News. The proposal also calls for spending $200 billion on students with disabilities, $100 billion on educational grants and $50 billion on school infrastructure.

“The vastly unequal state of public school facilities is unacceptable and a threat to public education,” Warren said in a statement. “We cannot legitimately call our schools ‘public’ when some students have state-of-the-art classrooms and others do not even have consistent running water. The federal government must step in.”

Funding for the plan would come from Warren’s proposed wealth tax, which the Massachusetts Democrat says will raise $2.75 trillion over a decade – a claim that some tax experts have said is too optimistic. With this education plan, all the projected revenue from the wealth tax, which would impose a 2% levy on wealth above $50 million and a 3% levy on wealth over $1 billion, has now been assigned by Warren to specific policy proposals:

  • $1.25 trillion on tuition-free college and debt cancelation,
  • $700 billion for universal childcare,
  • $800 billion for public K-12 education.
The Wall Street Journal’s Joshua Jamerson says that Warren has previously cited other uses for the revenues from the wealth tax, including $100 billion to address the opioids crisis and $20 billion for election security. “Now that it is exhausted,” Jamerson wrote Monday, Warren “will need to find new ways to raise revenue for other proposals—something she has done before, as when she proposed a net investment income tax on high-income households to extend the life of Social Security.”


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