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Healthcare: Warren Has No Plan
Under pressure to fill the blank space about how she would pay for Medicare for All, Elizabeth Warren released a plan built on empty assumptions and fulfilled by unrealistic revenue expectations. It’s bad to the point where it raises questions about whether she is a serious candidate, and that begs the question of what the heck the Democrats are doing less than a year from the election.
Warren’s revenue plan is 19 pages, describing how she expects to redo the entire healthcare system in America if not the basis for our entire society. Actually the first five and a half pages are introductory, mostly scary stuff about how expensive health care is, and the last page is some cheerleading, which means the actual prescription for acquiring and spending trillions of dollars fits into about a dozen pages. That’s some damn efficient writing, or some pretty thin thinking.
It’s pretty thin thinking.
Even how much the whole thing might cost, the core underneath everything else, is a fuzzy number. Outside estimates range from $14 to $34 trillion in new Federal spending over a decade; Warren says $20.5 trillion. And yes it is a problem when a program of this size can’t get its actual cost estimate closer than plus/minus multiple trillions.
Underlying those goofy cost estimates are Mickey Mouse assumptions on savings. Warren’s plan envisions cutting the cost of healthcare dramatically so when the government takes over from private insurance companies it will need less money. While eliminating insurance companies’ profits will have an obvious effect, Warren simply imagines other economies of scale and efficiencies in health care payments ($2.9 trillion) somehow the private sector has failed to realize to its own benefit but a massively expanded Medicare government bureaucracy somehow will.
Warren also assumes Big Pharma will accept lower profits of some $1.7 trillion based on negotiated drug prices and simply continue to produce the same range of drugs and invest in long term research for new ones. And if they don’t play ball her plan will take away patents on their existing drugs and manufacture them publicly.
Things will go so well under these assumptions Warren will apparently (the plan is unclear, an example of the kind of detail needed but lacking) do away with payments Medicare users are responsible for today so everything will be free. Currently all but the most basic Medicare coverage requires premiums (for most beneficiaries, previous contributions over a lifetime of work pay about 75 percent of Part B, and the beneficiary pays the remaining 25 percent out of pocket) and many end up buying supplemental private insurance which Warren would outlaw. “High income beneficiaries,” defined as having incomes over $85k, a far cry from Warren’s billionaires, already pay much higher costs. There’s a penalty when an elderly person receives certain capital gains, such as when they sell their home to downsize. Hospitalization coverage under current Medicare has a $1,364 deductible and no cap on co-pay for longer stays. Outpatient coverage leaves one responsible for 20 percent of the actual cost in cash. Medicare prescription coverage has enough gaps in it they are referred to as the “donut hole.” What is already “free” isn’t, and Warren’s plan says little about the shortfalls of existing Medicare even as it promises everything will be OK just over the next hill.
But Warren’s biggest assumption is the unstated one, that the billionaires she will tax to pay for all this will passively accept their new role in society, buying stuff for the rest of us, and not off shore their money and not order the Congress they own to create loopholes for them. If there is any truth to the idea the wealthy control government via their influence and money (and oh boy is it true) how can anyone assume the rich will allow any of this to come to pass? Amazon paid $0 in taxes last year. Warren’s plan assumes that will jump to 35 percent. She does not explain how she will move them from paying nothing to paying 35 percent. It’s like saying the plan to pay off my mortgage is “earn more of the monies” without anything more complex in mind than that.
Same for the power of American Medical Association, the cartel which controls healthcare in the United States from med school intake to every detail of practice until a doctor retires. Warren’s plan assumes medical professionals and organizations, all the doctors, nurses, and hospitals, will accept a lower standard of living as their fees will be set by government and payments tied to below-market Medicare rates. Medicine has evolved in a for-profit ecosystem. Remove the profit incentive and it will adapt, adjust, or die off. Many hospitals in rural and underserved areas are already facing insolvency. Other hospitals today lose or make very little money on Medicare patients, and charge insured payers more to make up for it to stay solvent. It’s called cost shifting and Warren’s plan will do away with it. Cost shifting smells bad, but it for better or worse helps fund underfunded Medicare payments. The shortfall may be in the trillions and Warren expects healthcare providers to just, um, deal with it for the greater good.
On the revenue side, after all that cost cutting, Warren still needs $20 trillion in new money, and she says she’ll get it from the rich. That’s a nice argument to throw out to the rube voters she is targeting, people to whom a paid off Visa card is a dream. But a trillion is a really big thing. It is 1000 billions. Warren’s $20 trillion is about the same as the current National Debt, which will still be around as she works this out. The total of all mortgages in America right now is $11 trillion. Warren could pay those off twice for everyone for what her healthcare plan will cost. The Federal government currently spends about $4.4 trillion per year on everything. The current defense budget is $686 billion. Warren’s plan will cost about 30 times the defense budget.
Meanwhile, Jeff Bezos’ net worth is only $109 billion (see how that works when we’re talking in trillions?) That’s everything he has, not just the 6 percent tax Warren wants him to pay on it yearly. The net worth of the entire Forbes 400 is under $3 trillion. That’s everything they all own, like if we killed them and took it. If we reach down into the top ten percent of Americans, people whose net worth is a couple of million and who Warren claims she won’t need to bother, we get to $35 trillion in total worth. Taxing them won’t help. We’ll have to kill them too and steal their stuff and even then under some estimates it won’t be enough to cover Warren’s healthcare costs. It is not possible to tax even the wealthy enough to pay for free healthcare for everyone, but it sounds good.
Warren thinks we won’t notice her Medicare for All plan is in fact an attempt to redistribute money on a scale never before seen in America. Under the guise of healthcare, she will systematically reduce the wealth of Americans, effectively nationalize the private healthcare industry (America’s largest employer, surpassing manufacturing and retail, the new steel industry), then parcel out what’s not eaten up by the bureaucracy in a mediocre standard of basic health care. She’ll also do something similar, though the plan is not even as detailed, to provide free child care, free college, and disappear some $2.6 trillion in student loans and too bad about the fat cats who expected their money back.
If you think people who already have some sort of healthcare (69 percent rate their current coverage as excellent or good), or purple voters who saved for college the hard way, will vote for that once they figure out the grift — the Trade Joe suburbanites know they’ll end up paying while Amazon somehow skates free again — you’re a fool. Even one of the economists Warren cited in her plan has since done interviews reminding everyone he was talking only theoretically and acknowledges the practical problems.
The hollowness of this plan is a body blow to a candidate who presents herself as a policy wonk. How could she have gotten something so central to her message so wrong? Warren is flirting with the Beto phase of her candidacy, where she says yes to everything (tax churches! impound guns! no borders amigo!) to bully up some support. As Joe Biden fades in front of an electorate that sees him as so negligible a choice, all hair plugs and botox, Warren will likely be pushed aside by someone, maybe Michael Bloomberg, and end up an “issues” candidate like Sanders ver. 2015 or Jill Stein or Andrew Yang, running to influence the discussion, not to win (Warren’s wealth tax may not even be Constitutional.) She’ll join the others in barking like hyenas that the moon is too damn bright and somebody needs to fix it.
For the rest of us this means after putting up with three years of hashtags, pussy hats, trans-mania, and having every form of culture soaked through with mob-enforced diversity, when it comes down to winning an election in 2020 no one has a real plan to address healthcare. Most have chained themselves to prettied up versions of the weak tea of Obamacare. Sanders is Warren except he admits he’ll raise taxes across a deeper swath of society. They all had years to come up with something and this is what we get. To say the system for producing a viable candidate is broken is to still believe there is a system.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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Rich Bauer said...
1You seem to forget this is a country that ate yellowcake. It will swallow anything.
11/16/19 8:53 AM | Comment Link
Rich Bauer said...
2People want to be fooled.
TRUMP: We’ve got to get rid of the $19 trillion in debt.
WOODWARD: How long would that take?
TRUMP: I think I could do it fairly quickly, because of the fact the numbers …
WOODWARD: What’s fairly quickly?
TRUMP: Well, I would say over a period of eight years.
11/16/19 9:50 AM | Comment Link
Rich Bauer said...
3President Warren does have a plan: Amb. Yovanovich will be her Secretary of State, the CIA whistleblower will be the Director of the CIA, Trump will be exchanged for Edward Snowden, who will be the NSA Director, Rudy G. will be placed in Rikers general population, Bill Barr will go into hiding as a Cinnabon store manager, and Mike Flynn, Roger Stone, Rat Cohen, and the rest of the circus clowns will be starring in The Apprentice: Prison edition.
11/16/19 10:17 AM | Comment Link
Michael Murry said...
4I will try to side-step Peter Van Buren’s political non-sequiturs about pussy hats, hair plugs and who currently leads the Democratic party’s primary rat-race before anyone has cast a single vote. Instead, I will stick to National Health Care plans, ostensibly Peter’s concern in this article. To that end, I did a cursory query of the Internet and found the following information upon the basis of which we might analyze such plans as Senator Elizabeth Warren and others have proposed. In subsequent comments I will refer back to this material.
[begin quote]
International Health Systems for Single Payer Advocates
Health care systems in the Organization for Economic Cooperation and Development (OECD) countries primarily reflect three types of programs:
1. In a single-payer national health insurance system, as demonstrated by Canada, Denmark, Norway, Australia, Taiwan and Sweden, health insurance is publicly administered and most physicians are in private practice. U.S. Medicare would be a single payer insurance system if it applied to everyone in the U.S.
2. Great Britain and Spain are among the OECD countries with national health services, in which salaried physicians predominate and hospitals are publicly owned and operated. The Veteran’s Administration would be a U.S. single payer national health service system if it applied to everyone in the U.S.
3. Highly regulated, universal, multi-payer health insurance systems are illustrated by countries like Germany and France, which have universal health insurance via non-profit “sickness funds” or “social insurance funds”. They also have a market for supplementary private insurance, or “gap” coverage, but this accounts for less than 5 percent of health expenditures in most nations.
Sickness or social insurance funds do not operate like insurance companies in the U.S.; they don’t market, cherry pick, set premiums or rates paid to providers, determine benefits, earn profits or have investors, etc. In most countries, sickness funds pay physicians and hospitals uniform rates that are negotiated annually (also known as an “all-payer” system). Princeton economist Uwe Reinhardt calls Switzerland’s “sickness funds” quasi-governmental agencies. In France, the overwhelming majority of the population is in a single non-profit fund, so many observers consider the French system “single payer.”
There is no model similar to sickness funds operating in the U.S., although they are often confused with the Federal Employee Health Benefit Program (FEHBP), which is simply a group of for-profit private insurance plans with varying benefits, rules, regulations, providers, etc. The 1993 Clinton health plan was an attempt to regulate private insurance companies in the U.S. to behave more like sickness funds, but the insurance industry defeated it.
[end quote]
So much for background context. Now, let the discussion and analysis of Peter’s article begin.
11/16/19 8:41 PM | Comment Link
Michael Murry said...
5I’d like to leave aside kabuki puppet show distractions — culture war (R) and virtue signaling (D) in the U.S. — as irrelevant to discussions of national health care systems. Instead, I’d like to offer the example of the excellent and affordable national health insurance system that we have here in Taiwan. Since it has already saved my life twice, I obviously consider it an excellent system. With no employer-subsidized health insurance in the U.S., I would have died and left my wife destitute if I hadn’t gotten out of America and moved to Taiwan sixteen years ago. I can easily understand how terrified (not just “scary”) so many Americans feel at the prospect of getting sick and going bankrupt while trying to get insurance companies to pay up for the premiums and deductibles they charge their customers. Half the American population lives at or below the poverty-income level, for crying out loud.
Here in Taiwan, everyone pays a monthly premium to the government which in turn pays doctors, nurses, hospitals, and clinics negotiated rates for services, hospitalizations, medications — even for traditional Chinese medicines — et cetera. We have municipal and national university hospitals as well as private hospitals and clinics. This insurance also includes basic dental care. For these excellent services, my wife and I pay a combined monthly premium of $45. Doctor visitations and prescription medicines require a very modest co-payment. A few dollars in most cases. Foreign workers who come here for jobs must have employers who pay this basic health premium for them, too. We each have a plastic identity card with a computer memory chip on it which records all of our medical treatment and doctor visitation information so that we can access the system at any convenient location in the national network. According to the background information I cited above, Medicare For All would fall under this category (1) if it applied to everyone in the United States, which it should.
Anything doctors, nurses, hospitals, and pharmaceutical companies can do for persons 65 and over they can do for persons under 65 as well. As for insurance companies and their redundant overhead, stockholder dividends, and CEO bonuses: screw them. They can always sell car, life, and shipping insurance. And if Canadians and Taiwanese can get cheaper pharmaceutical medications, so can Americans.
The U.S. can get this health care thing done if only enough Americans demand it. But if they prefer indentured poverty and economic hopelessness, then they will certainly get what they already have.
For my part, I will watch the unfolding events in America with interest but little trepidation since I already enjoy the benefits of an affordable single payer health insurance system. Thank you, Taiwan for not finding this too difficult to achieve.
11/16/19 11:44 PM | Comment Link
Rich Bauer said...
6If the world taxed every tweet and email at just 10 cents we could pay for medical care for the whole world. Productivity would increase dramatically, people would have to start talking to one another, and Nigerian princes will have to get real jobs.
11/17/19 12:42 PM | Comment Link
John Poole said...
7I too wish for a foolproof format/system to choose the most viable candidates. But now that everyone knows the gigantic financial windfall that follows POTUS duty (an elevated form of jury duty) even mega millionaires volunteer for such service.
11/18/19 12:07 PM | Comment Link
Rich Bauer said...
8JP,
Russia and the USA are not so different, are they?
11/18/19 12:13 PM | Comment Link
Kyzl Orda said...
9The money exists to pay for universal healthcare in the US — it’s just not a priority.
It’s easier to let hospitals and healthcare facilities go bankrupt in rural areas or for Americans to lose their life savings overnight after receiving medical care.
Time to claim a share of the wealth the oil and gas industry has garnered — many of these companies pay NO taxes and are off-shored. They have been driving the wars in the Middle East and Afghanistan, while Uncle Sam and our soldiers and contractors have put their lives on the line. Security costs are astronomically high and this is not sustainable. Return spending to pre-Iraq invasion spending levels and reallocate those monies plus require Oil and Gas to not only reincorporate in the US but pay to Uncle Sam.
EU countries not only have universal healthcare — they get free college and pensions plus higher standard of living. Some of these countries have the same tax burden we do in the US percentage-wise — but they have more to show for it.
We have the money for healthcare — it’s not being managed wisely and the priorities are elsewhere.
US companies should not be permitted to off-shore and also compete for lucrative US government contracts. This law was permitted during the Bush-Cheney administration. We have lost alot of valuable tax revenue and the government has been spending like drunken sailors, with both parties at fault
11/18/19 12:30 PM | Comment Link
Kyzl Orda said...
10Pitfalls are serious to any healthcare reform or revised plan: lobbying.
The government also has to weigh in on cost controls and hospitals and facilities need to be compelled to be transparent about costs to patients. It’s an abuse of patients’ rights that some places fail to provide, even if asked, a list of costs up front.
11/18/19 12:36 PM | Comment Link
John Poole said...
11Michael Murry- I’m ignorant about how Taiwan achieved or acquired its present health care structure. In America sickness and regrettable genetic inheritance are celebrated as a lucrative business opportunity. The Taiwan people most likely think differently about such matters.
11/18/19 12:43 PM | Comment Link
Rich Bauer said...
12Trump is using his medical care for his heart discomfort
The White House has declined to say if there is any other issue at play here,” he said. Instead, the network was directed to the White House statement that downplayed the visit. “According to the White House, all this is is the president getting ahead of things here,” said Diamond.
Diamond further reported on November 17 that a source told him Trump’s Saturday visit “did not follow the protocol of a routine presidential medical exam.” In addition, reported Diamond, the medical staff there did not get a system-wide notice of the president’s visit as normally occurs; Trump didn’t travel on Marine One, which is also normally the case; the visit wasn’t even on the president’s “internal schedule,” and a source called it all “abnormal,”
They prescribed he stick to his fast food diet and get lots of rest.
11/18/19 1:30 PM | Comment Link
Rich Bauer said...
13Trump, the anti-Midas touch
While some have said Trump has the Midas touch, his recent bad performances in Kentucky and Louisiana elections, and attending the Alabama loss leads many to believe he has the Anti-Midas touch. If GOPers are smart, perhaps they should avoid the Trump touch. Trump may not be immune; he had to have his heart checked. Without his whores, maybe he touched himself.
11/18/19 2:00 PM | Comment Link
Rich Bauer said...
14Anonymous sources say Trump had a medical emergency that sent him to Walter Reed over the weekend. He had something extracted out of his butt. Some say it was Melania’s foot. Others say it was Pompeo’s head.
11/18/19 4:31 PM | Comment Link
Michael Murry said...
15I just caught the following video on The Real News Network that addresses the sorts of medical issues that require systemic reform in the U.S. See:
Economic Update: The US’s Profit-Driven Medicine
Partner Content — Provided by: Economic Update with Richard Wolff
https://therealnews.com/third_party_content/economic-update-the-uss-profit-driven-medicine
The Second half of the program [starting at the 15:00 mark] features an interview with Dr. Michael Magee who explains the medical-industrial complex in the United States.
11/18/19 7:59 PM | Comment Link
Rich Bauer said...
16Medicares for rich people
Well, almost.
Sadly for Ms. Verma, whos wants to cut medicare and medicaid, just got turned down for her coverage.
HHS rules specifically forbid reimbursement for loss of jewelry, so you won’t be able to buy her another $6,000 Ivanka Trump necklace. In the end, she only got $2,852.40 for her lost baubles and that special lotion that makes you look like a younger, even more comically evil version of yourself. And since the HHS Inspector General got wind of it — golly, wonder how that happened! — you won’t be able to pay Republican consultants $3.25 million to burnish her personal image either. It’s a damn shame.
12/12/19 9:23 AM | Comment Link