Elizabeth Warren says 'Medicare for All' plan increases taxes on billionaires, avoids hike on middle class

Nicholas Wu | USA TODAY

Show Caption Hide Caption Warren, Sanders' Medicare for All plan, explained Medicare for All is one of the most hotly debated topics in the 2020 election. But what is it? And how will it work? We explain.

Sen. Elizabeth Warren's "Medicare for All" plan promises to expand health care coverage by increasing taxes on the wealthy and corporations while not placing a hike on the middle class.

The Democratic presidential candidate on Friday released her much-anticipated plan to pay for "Medicare for All," a massive expansion of the federal government's current role in health care to establish a single-payer health care system.

In a series of tweets and in a policy platform released online, Warren promised she would fund the program, which she says will cost $20.5 trillion without a tax hike on the middle class and keep total health care spending at "under $52 trillion" over the next decade.

Her program would continue state and local payments to Medicaid, the federal-state health care insurance program that helps pay for health care for low-income people of any age, contributing about $6 trillion towards the establishment of Medicare for All.

Warren says the funding for the program will mostly come from a combination of tax hikes on corporations and the top 1%, as well as a shift in employer health spending.

Warren wants to replace employer health spending with an employer Medicare contribution, which she says will get "almost halfway" to paying for the plan.

What comes next in the impeachment inquiry?: Public hearings on an uncertain timeline

She also says her plan will help pay for itself by reducing costs within the health care system and taxing Americans' increased incomes.

According to Warren, her plan will reduce administrative spending by "setting net administrative spending at 2.3%," but will continue to "reimburse physicians and other non-hospital providers at current Medicare rates."

Another $1.4 trillion in funding would come from "existing taxes on the enormous amount of money that will now be returned to individuals’ pockets" after the system changes to Medicare for All.

She identifies four other areas for funding:

Better enforcement of tax laws to limit tax evasion and avoidance

Taxes on the financial sector, corporations, increased capital gains taxes and an increased wealth tax on billionaires

The passage of comprehensive immigration reform, which Warren says could lead to $400 billion of newly taxable income over the next decade

Closing a Department of Defense contingency fund

"Health care is a human right, and we need a system that reflects our values. That system is Medicare for All," Warren writes in her plan.

Biden: Joe Biden describes his health care plan using Pete Buttigieg's term, 'Medicare for all who want it'

Progressives praised Warren's plan.

Rep. Pramila Jayapal, D-Wash., who co-chairs the Congressional Progressive Caucus and was the lead co-sponsor of the Medicare for All Act in the House, tweeted that Warren's plan "shows we can spend less & cover everyone w/guaranteed, comprehensive care."

.@ewarren puts all the #MedicareForAll naysayers to shame by outlining a financing plan that shows we CAN & MUST provide quality guaranteed healthcare to everyone while reducing costs. Her financing plan shows we can spend less & cover everyone w/guaranteed, comprehensive care. https://t.co/2QkqLCLIxb — Pramila Jayapal (@PramilaJayapal) November 1, 2019

House Speaker Nancy Pelosi, D-Calif., called Medicare for All "expensive" and said she was "not a big fan of Medicare for All" in a Bloomberg TV interview later Friday.

Asked by "Balance of Power" host David Westin if Democrats could win the Electoral College by running on Medicare for All, Pelosi replied, with a laugh, "Well, it would increase the vote in my own district. But that is not what we need to do in order to win the electoral college.”

Other Democratic presidential candidates have embraced different forms of a Medicare for All plan, but at the most recent Democratic presidential debate, candidates criticized Warren for not laying out a framework to finance the policy.

“It’s fascinating that the person who has a plan for everything has no plan for the single most consequential thing in this election in the minds of the American people, across the board," former Vice President Joe Biden said at the October debate in Ohio.

Following the release of Warren's plan, Biden deputy campaign manager and communications director Kate Bedingfield slammed it as "unrealistic" and said its "mathematical gymnastics" will "[hide] a simple truth from voters" about tax increases.

It's impossible to pay for Medicare for All without middle class tax increases," Bedingfield said. "To accomplish this sleight of hand, her proposal dramatically understates its cost, overstates its savings, inflates the revenue, and pretends that an employer payroll tax increase is something else."

"She will be left with only two choices: even further increase taxes on the middle class or break her commitment to these promised benefits."

Warren's rivals have presented plans that would expand health care coverage but would phase in the program more slowly, or provide Americans the option to opt in to the coverage.

Republicans have called Medicare for All plans "socialist" and say they amount to a government takeover of health care coverage.

Chris Pope, a senior fellow at the Manhattan Institute, a conservative think tank, said Warren's plan would result in cuts to American health care because of its reimbursement rates.

"Senator Elizabeth Warren’s single-payer proposal would impose drastic cuts on American healthcare," he said. "We know for sure from watching Maryland, which already has government-set prices, that American hospitals would see revenues slashed by around 25%—likely forcing some facilities to cut back services and others to close entirely. A similar story would likely play out nationwide."

Speaking at a Medicare event in Florida at the beginning of October, President Donald Trump said, “Medicare is under threat like never before."

"Almost every major Democrat in Washington has backed a massive government health care takeover that would obliterate Medicare," he said.