Can Warren Escape the Medicare Trap?
The candidate of plans needs a really good one right now.
On Sunday, Elizabeth Warren said that she would soon release a plan explaining how she intends to pay for “Medicare for all.” Like many policy wonks, I’ll be waiting with bated breath; this could be a make or break moment for her campaign, and possibly for the 2020 election.
There are three things you need to know about Medicare for all, which in the current debate has come to mean a pure single-payer health insurance system, in which the government provides all coverage, with no role for private insurers.
First, single-payer has a lot to recommend it as a way to achieve universal health care. It’s not the only route — every major advanced country besides the United States achieves universal coverage, but many of them get there via regulations and subsidies rather than by relying solely on public insurance. Still, single-payer is clean and simple, and many health economists would support it if we were starting from scratch.
But we aren’t starting from scratch, which is the second thing you need to know. More than half of Americans are covered by private health insurance, mainly through employers.
Not many people love their insurance companies, but that doesn’t mean that they’re eager to trade the coverage they know for a new system they don’t. Most people probably would end up better off under single-payer, but convincing them of that would be a hard sell; polls show much less support for Medicare for all than for a “public option” plan in which people could retain private insurance if they chose to.
Which brings me to the third point: In reality, single-payer won’t happen any time soon. Even if Democrats win in a landslide in 2020, taking control of the Senate as well as the White House, it’s very unlikely that they will have the votes to eliminate private insurance.
Warren, who has made policy seriousness a key part of her political persona — “Warren has a plan for that” — surely knows all of this. And early this year she seemed to recognize the problems with a purist single-payer approach, saying that she was open to different paths toward universal coverage.
Since then, however, she seems to have gone all in for the elimination of private insurance.
I have no inside information about what led her to take that plunge, but my guess is that she was trying to protect her left flank — to avoid alienating supporters of Bernie Sanders, who have made single-payer a kind of purity test one must pass to be considered a true progressive. And I’m not going to criticize her for engaging in a bit of political realism; after all, the case against Medicare for all is itself basically political.
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At this point, however, it’s looking as if Warren may have painted herself into a corner.
Part, but only part, of the issue involves cost.
Journalists have been badgering Warren to get specific about how much taxes would have to go up to pay for Medicare for all. She has, with considerable justice, insisted that this is a bad way to frame the discussion, since any additional taxes would be offset by savings on the huge premiums workers and their employers now pay for private insurance — on average, more than $20,000 a year for a family plan.
The right question is whether the overall costs facing U.S. families would go up or down. Warren has been claiming that for most families, they would go down, but she hasn’t offered specifics. And this vagueness, which has started to seem like evasiveness, is more of a problem for her than it might be for other politicians. As I said, Warren has made policy seriousness a key aspect of her political persona, so her fogginess on health care really stands out.
The plan in the works will presumably try to dispel that fog, but doing so will be tricky. An independent estimate from the Urban Institute (which is, for what it’s worth, left-leaning) suggests that a highly comprehensive Medicare-for-all plan, similar to what Sanders is proposing, would substantially increase overall health spending, although a more modest plan wouldn’t.
But cost isn’t the only issue — in fact, I’m not sure how important it really is, given that full abolition of private insurance remains unlikely in practice. Also, let’s get real: If Warren gets the Democratic nomination, the outcome of the general election isn’t going to hinge on dueling think tank estimates.
The election might, however, hinge on the support of people who have good private coverage and would be nervous about making a leap into the unknown, no matter how many facts and figures Warren deploys.
So what I’ll want to see is whether Warren gives herself and her party enough flexibility to assuage these concerns. I’m not sure what form that flexibility might take. Maybe something like an extended transition period, with greatly enhanced Obamacare (which might actually be politically doable) in the interim?
Whatever Warren comes up with, this is a crucial moment. There are many excellent things in her overall policy agenda; but she won’t get a chance to do those things unless she can extricate herself from what looks like a health policy trap.
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Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman
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