Things to like, not like, and to be unsure about re Sen. Warren’s M4A plan (along with a mea culpa)

November 5th, 2019 at 3:25 pm

Along with many others, I’ve had lots of things to say about Sen. Warren’s Medicare for All (M4A) plan, some positive, some negative, some head-scratchy. But because the issue is so politically loaded, both in terms of the Democratic primary and conservative antipathy toward this or any other idea that expands government’s role in health care, and also because of my association with VP Biden, it’s been hard to have a straight up policy discussion.

In a CNBC TV debate, for example, I was asked what I thought about how Sen. Warren’s numbers added up. I responded, “In terms of making the numbers add up — yeah, there are a lot of questions there, but in fact I think she’s done a very good job of focusing the debate on those questions.” Later, an article showed up without the last half of the sentence (“she’s done a very good job…”), leaving a pretty different impression of my view, I thought.

It’s hard to do nuance is this context, at least for me, apparently, so I decided to write down what I like, dislike, and am not sure about re the plan.

Things to like about Warren’s M4A plan:

–It’s a detailed policy road map. It’s not legislation, of course, but it’s probably got enough detail to write legislation around, making it the first time a presidential candidate has gone beyond the hand-waving we usually see around single-payer ideas in election cycles. Whether you like the plan or not, that focus clarifies the debate in a useful way.

–Its aggressive cost controls squeeze a lot of excess profits out of our bloated health-care-delivery system. Some experts who know a lot about this claim (like those at the Urban Institute) think she’s too optimistic on this front; that it’s unrealistic to, for example, score cuts to health care administration, drug costs, and the overall growth rate cost growth by the amounts her plan assumes. But she pushes each of these areas in the right direction, as must any serious health care reform plan.

–Reasonable folks will argue about the reality of how she gets there (as I’ll stress below), but she pays for the plan. She resists the magic asterisk (“payfors to come”) or the who-cares-about-deficits crowd.

–Though she is arguably again too optimistic about the amounts they’ll yield, many of her financing ideas are worthy in their own right, including the financial transaction tax, closing the tax gap (taxes owed but not collected), and welcoming immigration reform.

Things to dislike about the plan:

–To move the ~$9 trillion over 10 years that employers currently contribute to their workers’ health care, Sen. Warren’s plan has a kind of head tax, initially scaled to a bit less than employers are currently paying. That way, no one can claim the plan is a big burden on businesses right out of the gate. But as I (and Matt Bruenig) understand it, eventually this per-worker fee converges to a head tax that’s the same amount per employee in covered firms (with more the 50 workers). By itself, this would be a regressive tax for low-wage firms and workers, though a fulsome judgement requires factoring the distribution of all the other, progressive, aspects of the plan. If, however, I’m right about it, I expect team Warren to revisit this part of the plan.

[Note: I think the theory of the case for team Warren is that if you’re doing a head tax, you either converge to the average or you lock in the initial unfair distribution, where crappy-plan firms get an advantage.]

–The financing is structured to buy into the “not one penny in higher taxes from the middle class.” I grant that it’s easy for me to say, as I’m not running for office, but the idea that every progressive idea has to be financed by taxes solely on the wealthy is ultimately contrary to health democracy. No question, the top of the scale is the right place to start re financing, but Democrats must reestablish the norm of broader, yet still progressive, taxation. (Some may respond to this critique by citing the head tax, but as noted, I fear that’s a regressive approach.)

–David Leonhardt from the Times makes a fair point about the least popular aspect of M4A: the fact that it replace private coverage, most notably for the almost 160 million covered through employers. He writes:  “The biggest weakness of Warren’s approach is that it tries to bulldoze through the sizable public anxiety about radical changes to the health care system. Warren would not let people opt into Medicare, a wildly popular idea. She would force them to join.” M4A proponents stress the problems with such coverage, and I’m not suggesting that everyone of those 160 million loves their plan. But there are, in fact, relatively good plans out there and when it comes to health coverage, people are intensely risk averse. Much more thought must be given to transition or to alternative plans, like one I highlight below, that get to (or close to) universal coverage without ending private coverage.

Things I’m unsure about re the plan:

–I’ve written that one advantage of this M4A debate—now venerably reified—is that it potentially raises the public’s demand to plot a path to universal coverage, even if it’s by a less interventionist path, the path I myself view as preferable. From my recent Vox piece (italics added):

[The Urban Institute has scored] plans that look a lot more politically plausible to me and get to near-universal coverage for far less. Their analysis of a “single-payer lite” plan, which involves income-related cost-sharing but no premiums, less-comprehensive (but still decent quality) benefits, and no coverage for undocumented persons, costs half that of the “full-Bernie” enhanced plan. Remarkably, a public-option plan that requires more cost-sharing than single payer but significantly less than current law gets to near-universal coverage for less in additional federal costs than the Trump tax cuts ($1.8 trillion over 10 years for the plan vs. $1.9 trillion for the tax cuts).

But I readily admit that this is chin-stroking punditry with which reasonable people will disagree.

And while I suppose primary candidates must fight for votes, if I’m right about the above, then the Warren/Sanders approach is complementary to the more incremental Biden/Buttigieg approach. Like they say, “politics ain’t beanbag.” But attacking Warren for “raising taxes on the middle class” or abandoning the goals of Obamacare seems as false and counterproductive as attacking the more moderate candidates for not going all the way to M4A. All the D’s want to get to universal coverage, but they take different paths to get there.

–I’ve long thought that arguing the minutiae of health reform plans is somewhere between the Afghanistan and Hotel California of domestic policy debates, with no political upside. But given her I’ve-got-a-plan brand, Sen. Warren may consider this an unavoidable risk. Moreover, she may well be turning this view on its head: she’s sees an unjust problem, diagnoses it, and prescribes pretty granular solutions, with numbers and appendices. And based on her poll numbers, a lot of people like it!

–The likelihood of M4A in the near (the next Congress) and probably medium term (the Congress or two after that) is close to zero. If you pull back from the wonky discussions of how realistic the cost savings and revenue raisers are, the debate can sound like it’s between avid members of a fantasy football team. I argued above that this widens the potential policy landscape and creates a more incremental reform path but there’s a cogent argument that the political downsides to not delivering single payer won’t be trivial.

IN conclusion, a mea culpa: In the CNBC debate cited above, I made snarky comments about the plan and its payfors being unicorns. That was unnecessarily disrespectful to many who believe otherwise, to whom I apologize. I was really thinking about the last point re my perception of legislative realities, around which, ftr, there’s wide agreement. As I hope I’ve conveyed, I admire the progressive, aspirational energy around M4A. I just want to hear more about plan B. Don’t just tell us what you want to do were this a better world. Tell us what you believe you can do given realistic political constraints.

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5 comments in reply to "Things to like, not like, and to be unsure about re Sen. Warren’s M4A plan (along with a mea culpa)"

  1. Gerald Scorse says:

    Excellent (and it had to have taken you a lot of time).


  2. Pinkybum says:

    “Tell us what you believe you can do given realistic political constraints.”

    I think this is the wrong negotiating position to take. I think Warren needs to set out a strong case for M4A that is viable only then do we fall back due to political expediency.


  3. Art Davidson says:

    In the US people equate the company’s plan with the group of doctors that go along with it. A different plan means different doctors, when I just got used to the old doctors. If M4A means I can choose my doctors then choosing an insurance company is superfluous.


  4. Daniel Simon says:

    “Tell us what you believe you can do given realistic political constraints.”

    You do realize that politicians, and their campaigns, play a role in shaping the political restraints that they ultimately face don’t you?

    If you don’t realize that, then you must have thought (beginning more than 3 years ago) that the USA would inevitably separate migrant children from their parents and imprison the kids for months at a time.

    Given that politicians inevitably shape their political constraints, why should a candidate *always* pick a less good vision of the future? (which I believe is the logical conclusion of your final line.) And furthermore why is it that only policies that help most people need to be fully “costed and paid for” in advance, when the policies that help the mega-rich are NEVER paid for?


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