• Healthcare: Warren Has No Plan

    November 16, 2019 // 16 Comments »

    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.

     

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    Posted in #99Percent, 2020, Economy