Elizabeth Warren’s Medicare For All Plan is Trying to Trick You

SAM SCHECTMAN // NOVEMBER 15, 2019

 

Folks, the liberals are at it again. Elizabeth Warren released her plan to finance Medicare For All at the beginning of the month. This is probably the single most important policy of this presidential election cycle, and it’s real bad. In fact, it’s so bad, it makes me think that maybe this plan is bad on purpose!

Warren’s M4A plan is meant to be different from Bernie Sanders’s M4A plan, and the main difference is supposed to be that Warren’s plan has no middle class tax increases. It may sound strange that I have a problem with that, but check this out - it’s not actually true. That’s so quirky! I love that for her! Any M4A plan that actually does what its supposed to, which is to provide universal healthcare with no payment at the point-of-service, is going to be impossible to fund without a small middle class tax increase. I know that to most tax-fearing Americans, that sounds horrible, but that’s why the most effective messaging is to point out that people will pay less overall. If all your copays and premiums are gone because of a tax increase, and you end up saving money, then it’s not actually a tax increase.

So what’s wrong with Warren’s financing plan, and how does it actually tax middle class people? Well, Matt Bruenig of the People’s Policy Project has done a lot of excellent work on this in the days since Warren released her plan, and he says that the problem is twofold. First, the “Employer Medicare Contribution” financing scheme isn’t as progressive as a simple payroll tax, and second, there are a couple loopholes that companies will definitely take advantage of that will completely ruin the whole payment plan. 

The Employer Medicare Contribution financing scheme is basically a per-head tax on employers, which Bruenig says will equal about $9,500 per employee. On the other hand, the regular Medicare Payroll tax is just 8% on all employees. So, in case you’re part of the Elizabeth Warren campaign and don’t realize how taxes work, taxes on ‘employers’ are really just payroll taxes, which employers and employees end up splitting the cost of due to some bullshit about labor elasticity blah blah blah, I passed Econ 101, okay? The point is, employees are still gonna pay some of this tax, so it’s a middle class tax increase. Also, importantly, it’s going to be a heavier burden on people who are making less money, rather than the flat payroll tax, which will take an equal share of everybody’s paycheck. It doesn’t really make sense to have someone making $15,000 a year and someone making $200,000 a year pay the same amount of tax, because it’s a lot more for the person making $15,000!

As for the loopholes that I mentioned, there are two. There’s no $9,500 per person tax on independent contractors and the companies that hire them, and there’s no $9,500 per person tax on companies that have fewer than 50 employees. How could this possibly go wrong? Well, we’ve already seen a willingness by companies to spin their employees off into independent contractor status. One example is Amazon paying their employees $10,000 to quit and become “third-party delivery partners.” Another example is the summer camp that I work at making me an independent contractor last summer. What gives, Fayerweather Street School? If companies know that they just make people ICs and they won’t have to pay the tax, then they’re gonna do it. This will completely destroy the entire funding scheme, because there just won’t be money to pay for it anymore! This isn’t a problem with a regular payroll tax, because it’s just taxing dollars of labor as a percentage, not a sum per employee. 

So, uhh, it seems like this isn’t gonna work, so why did Warren propose it in the first place? Well, first, the obvious political thing where she gets to say, “No Middle Class Tax Increases!” even though that’s a lie and could be refuted relatively easily. Luckily mainstream journalism has no interest in actually challenging power and just repeats what campaigns say regardless of truth nowadays, so that does actually seem like a smart political move. But what if also… Warren doesn’t want this to work? 

Here’s another example of some quick googling, again making me a better journalist than anybody who has ever worked for CNN. Warren said, in an interview with The Hill on November 2nd, that a guy named Andy Slavitt helped write her M4A plan. Hey, that’s nice of him! Slavitt used to work at Goldman Sachs, and then he worked at McKinsey, former home of the young boy from Indiana who is running for President, and then he founded a company called Health Allies, which was acquired by UnitedHealth Group in 2003. UnitedHealth Group, as the name might suggest, is a for-profit healthcare company. It seems a little strange that somebody who worked at a for-profit healthcare company would write a plan that should, if all goes right, get rid of private health insurance. Hey, wait a second, who else founded Health Allies? Oh, it’s Amelia Warren Tyagi, Elizabeth Warren’s daughter! 

So, Warren’s healthcare plan won’t work, and also the people who designed it probably didn’t want it to work because they make money off of private healthcare, and also Elizabeth Warren’s daughter is one of those people, but on the other hand it sounds good because there are “no middle class tax increases.” Warren’s plan sure seems like a crock of shit, but like, some people who like Bernie on Twitter are annoying, so if you wanna keep supporting her, go off, I guess. 

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