Democratic presidential candidate Sen. Elizabeth Warren, who has been stalling in polls, announced a two-step plan Friday aimed at escaping from the healthcare trap she has gotten herself in. But in reality, the new proposal is likely to blow up in her face.
To this point in her presidential campaign, Warren has allied with Sen. Bernie Sanders of Vermont to stake out an extreme position by insisting that anything short of a $34 trillion overhaul of the U.S. healthcare system, which would require kicking 180 million people off of private insurance, was insufficient. In doing so, she has railed against plans from other candidates, including former Vice President Joe Biden and South Bend, Indiana, Mayor Pete Buttigieg, who call for building on Obamacare and providing an optional government-run plan for Americans.
To prove her preposterous claim that she could finance her plan without raising middle-class taxes, just this month, she released a plan attempting to explain how she could do it, which independent experts across the political spectrum have derided as unrealistic.
After all that effort and shredding her credibility, she’s now out with a plan attempting to split the difference. Now, she claims that the transition to “Medicare for All” will happen in two steps. First, within 100 days, she’ll pass legislation that would enact an optional government plan. Then, in year three, she’ll pass the Sanders plan, which effectively eliminates private insurance.
Her aim is clear: She wants to be able to argue that her plan has a more realistic prospect of getting passed and that it will allow for a smoother transition than what Sanders is proposing, but at the same time, that the benefits of her plan are more generous than what other rivals are proposing, and she’s still committing to a fully government-run insurance system within her first term. But as is often the case when a candidate tries to thread the needle on an issue to satisfy both sides, Warren’s plan will open her up to attack from everybody.
To start, in her new plan, she does not abandon her commitment to ending private insurance. She’s still promising to do it within her first term. Furthermore, even before the theoretical passage of full Medicare for All in year three, Warren’s plan would immediately disrupt employer insurance coverage.
Under the proposed phase one, anybody with employer coverage can opt in to the new government option, and the employer will be forced to pay a fee to government. But if workers are leaving piecemeal to enroll in the government plan, employers aren’t going to maintain a patchwork system in which they’re paying the government for some workers, and still negotiating with private insurers for the rest. Instead, more and more employers will just stop offering insurance, and thus those who would prefer employer coverage would be pushed onto the government plan regardless of whether they wanted to.
Indeed, even Warren claims that, by year three of her first term, the number of people with private coverage would be “quite low.” Were legislation submitted along the lines of what Warren is proposing, the Congressional Budget Office would assume a massive loss in employer-based insurance, exploding the price tag. This is precisely the reason why Obamacare did not allow workers who are offered employer insurance to receive subsidies.
Given all of this, as well as for additional reasons, Warren would still be vulnerable to the same attacks from the right that she’d be taking away private insurance. And it would still be difficult to obtain the votes of more moderate Democrats in the Senate, where she’d need to get to 50 votes, even assuming, as she does, she’ll be able to pass the bill through the parliamentary maneuver of reconciliation.
From another angle, her shift from criticizing Buttigieg for supporting “Medicare for all who want it” to rolling out a version of that plan just weeks later will open her up to attacks that she’s behaving like an untrustworthy Washington politician.
At the same time, she is vulnerable to attack from the Left that under her revised plan, Medicare for All would never actually happen. She’s waiting until her third year in office, after midterm elections that typically go south for the incumbent party, to “fight to pass legislation that would complete the transition to full Medicare for All.” Sanders can now argue that Warren is no longer seriously committed to a fully government-run insurance system, renewing suspicions among advocates of such an approach that dogged Warren early in the campaign, pressuring her to proclaim “I’m with Bernie.”
Also, her implementation timeline is ridiculous and not to be believed. Obamacare was less ambitious than what Warren is proposing. Although it was complex as federal legislation goes, at its core, it involved an expansion of existing Medicaid and the creation of new exchanges for individuals to purchase insurance, as well as a scheme for awarding subsidies. And yet, with 60 votes in the Senate at one point, it still took 13 months from President Barack Obama’s inauguration to pass the law, and the major coverage expansions weren’t even implemented until 2014, during his second term. Even then, the rollout was an epic disaster, and it took years of canceled plans, insurer exits, and premium hikes for the program to reach a point that anybody could credibly claim was stable.
In contrast, Warren is proposing creating a new healthcare plan from scratch that would offer broad benefits and immediately cover tens of millions of people — those on Medicaid, those over 50, under 18, and anybody else who wants to buy in. She claims that she’ll be able to pass it within 100 days, and by year three, the new plan will be so firmly established that the system will be ready to pass full Medicare for All.
Let’s review this timeline. Passing a bill would require writing and negotiating complex legislation regarding healthcare benefits, coverage, financing, payments to doctors and hospitals, and so on. It would then involve wrangling votes in both the House and Senate and navigating the complicated reconciliation process.
Let’s just say that she can accomplish this with magic pixie dust. That would bring her to late May, giving the Department of Health and Human Services all of six months before the open enrollment period typically starts to create a massive new healthcare plan from scratch and brace for its impact on current Medicare enrollees.
Then let’s say it magically goes into place in January 2022, which happens to be the start of a midterm election year, in which Republicans will be able to use any mess up with the new program, any headline of an employer ending coverage, to pummel Democrats during a time when the party in power typically loses seats. Then, after a year of chaos that likely results in Democrats losing seats, Warren is going to go into 2023 and pass an even larger disruption to the healthcare system? Give me a break.
What’s amazing about this is that, knowing now she was going to end up here, had Warren taken this position from the start of her campaign, she may have been able to avoid a lot of the financing questions by focusing on the first phase of the program, which, though still expensive, would be much lower than the $34 trillion price tag for the full plan. Yet she went through months of evasions as to how she would pay for the larger plan, embarrassed herself with a ridiculous financing proposal, and now just two weeks later, is announcing another reformulation of her position. Warren’s flailing around on healthcare should be treated as another blow to the perception of her policy savvy.
