Senator Elizabeth Warren’s health care financing plan puts health care costs back in people’s pockets. It guarantees Americans the ability to see the doctors and get the care we want without having to worry about whether it’s affordable.
Warren’s plan would spend the same $52 trillion over ten years that we spend today, but covers everyone, imposes virtually no out-of-pocket costs, and expands benefits, including long-term care, vision, hearing and dental, without adding to national health care spending. And, it requires just $20.5 trillion in new federal spending (as opposed to private spending) over ten years. How? It cuts a lot of waste from our system and establishes fair provider rates and prescription drug prices.
Warren’s plan eliminates $350 billion a year–12 percent of premiums–that insurance companies put towards administration and profits. Medicare for all spends 2.3 percent on administration. Hospitals today spend $210 billion a year—8.5 percent of revenue–and doctors spend about 10 percent of revenue on administrative costs.
There’s no reason we should be paying $897 for a CT scan when it costs $97 in Canada, or $75,000 for heart bypass surgery when it costs $16,000 in the Netherlands. Primary care physicians in the US deserve higher rates; some specialists are paid too much.
Warren plans to cut brand-name drug prices by 70 percent and generic drug prices by 30 percent. No drug price should be more than 110 percent of the average international market price. Today, insurers’ incentive is to deny coverage for long-term treatments because they expect people to switch coverage. Medicare for All, in sharp contrast, will make long-term investments in people’s care the smart way to go.
Who should pay for health care? Warren wants federal and state governments as well as employers to continue to contribute what they contribute today towards the cost of health care. Though, under her plan, employers would save about $200 billion–2 percent–over ten years. Individuals spend $11 trillion today but would spend close to zero under Warren’s plan. Warren puts the money that comes out of their paychecks for insurance premiums back in their pockets. People with Medicare would be able to use the money they spend today on premiums as well deductibles, coinsurance and non-covered medical services, on other needs.
Workers would get back in salary the amount they currently contribute to health insurance premiums. Instead, financial firms, giant corporations, and Americans in the top 1 percent financially would pay more. The top 1 percent of Americans would pay $3 trillion more over ten years. The financing system would be phased in over time for a smooth transition.
Warren also expects an additional $2.3 trillion to come from enforcing existing tax laws. And, she projects $800 billion over ten years from a one tenth of one percent tax on financial transactions.
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