Warren's Medicare for All "Transition" Plan Is Surrender in Disguise

Nov 20, 2019

Elizabeth Warren is trying to have it both ways on Medicare for All.

She wants to be seen as both a true champion of the cause while signaling to the skeptics in her party that she understands it’s a long shot (at best), and also dangerous politically. Her just-released Medicare for All transition plan is an attempt to appeal to both camps. It is probably too clever to work.

In her latest offering, Warren says she will spend the first days of her first term as president pushing through a transition plan for Medicare for All. Once that plan—which itself is highly ambitious and politically fraught—is enacted and operational—and no later than year three of her term—she will push Congress to take the final steps toward full Medicare for All.

This timeline is fanciful. The Herculean political effort it would take to pass her “transition plan” would drop the odds of getting a Medicare for All plan through Congress from just-above-zero to absolute-zero. It would take a decade, at least, for all of the disruption the transition plan would unleash to unwind.

Warren knows this, of course, which means her new plan is an admission that she isn’t really going to push for Medicare for All if she is elected president. Don’t expect her to say that, however. She will claim that the revolution she is leading will have sufficient momentum to get Congress to act on her first plan in early 2021, followed by Medicare for All in 2023.

Warren’s straddle is so contrived and implausible that it is unlikely to work politically. Single-payer skeptics (and rival campaigns) will say she hasn’t done enough to distance herself from the political attacks Republicans will unleash on Medicare for All—most especially the criticism that it would force 160 million Americans to abandon their job-based insurance. At the same time, Medicare for All advocates will sense, rightly, that Warren has abandoned them without having the courage to admit it.

Warren would have been better off releasing her “transition plan” as her only plan. No one would be able to say it isn’t ambitious enough, or that it is insufficiently progressive. If enacted, it would do more than the Affordable Care Act (ACA) to expand federal control over insurance and medical care. Among its many far-reaching proposals are the following:

A New Public Insurance Option. Warren wants to outmaneuver the Biden and Buttigieg campaigns by offering a public option that is more expansive and populist that what they have described. In her version, all children under age 18 would be eligible for an insurance plan at no premium cost to themselves or their families.

In addition, all other residents in the country with incomes below twice the federal poverty line (FPL) would be eligible to enroll in the insurance without paying a premium. There would be no cost-sharing for any child or family with an income below 200 percent of the FPL. Households with incomes above 200 percent of the FPL would pay premiums that would be capped as a percentage of their incomes, with no deductibles and modest cost-sharing. States would be encouraged to enroll their Medicaid populations, totaling 72 million people, into the program.

Open to All Workers. Workers in employer-plans could opt into the public option and their firms would be obligated to pay a tax equal to what they pay for the workers’ current insurance plans. This provision would seriously disrupt job-based coverage by making it difficult, if not impossible, for employers to maintain stable insurance pools.

Expansion of Medicare to Persons Age 50 to 64. Warren would allow persons age 50 to 64 to enroll in an expanded Medicare program. Employers would pay a tax into Medicare equal to what they pay in premiums for worker coverage in their job-based plans. Workers would pay Medicare premiums, but Warren says those would be gradually phased out as costs were cut with provider payment reductions. Medicare’s benefits would be expanded to cover vision and dental services.

Expansion of ACA Subsidies. The subsidies the ACA provides for insurance enrollment would be increased to lower premiums for consumers. All households with incomes over 400 percent of the FPL would have their premiums capped as a percentage of their incomes.

Coverage of Long-Term Care. Both the new public option and Medicare would cover long-term care for the people who need those services. This proposal alone would be a massive expansion of entitlement benefits, rivaling the enactment of Medicare and Medicaid in 1965.

State Single-Payer Plans. States would be given the green light to implement single-payer schemes.

Warren states that she would pair this transition legislation with numerous steps she says she would have the authority to implement administratively. Among other things, she would:

Eliminate the budget-neutrality requirement for Medicaid waivers. States could expand coverage under Medicaid beyond households below 138 percent of FPL (the threshold established in the ACA) and draw down additional federal payments to cover most of the cost.
Liberalize the definition of “medically-necessary dental care” so that it covers many more services for current Medicare enrollees.

This plan would increase federal spending by at least hundreds of billions of dollars over a decade, and probably trillions because of the long-term care benefit. Warren says she will pay for added costs with the same taxes she outlined for Medicare for All.

If Warren had offered just her transition plan, and not Medicare for All, her more moderate rivals for the Democratic nomination would have had a smaller target to attack than they do today. This plan allows her to promise substantial new benefits, with no elimination of current options, all paid for by the billionaires “who haven’t been paying their fair share.”

Yes, the financing is fictional, but that will be lost on most voters. She could defend this plan as more progressive than the ones offered by the Biden and Buttigieg campaigns without having to justify the elimination of private insurance compelled by Medicare for All.

But that isn’t the path she chose. She claims to still want Medicare for All, with all of its baggage. Consequently, the criticisms from her rivals, and from Republicans, will continue unabated, even as Medicare for All advocates begin to question her loyalties.