The Warren Healthcare Plan

 

Senator Elizabeth Warren has a “plan” for everything. Recently she released her healthcare plan with enough details to analyze it and render an opinion. The response even from liberal commentators has been harsh, to put it mildly.

Warren has embraced Senator Bernie Sanders’ Medicare for All plan, but with her own ideas on funding. By her own mathematics, her plan will cost a cool $52 Trillion over the next ten years. That’s $20 Trillion more than the conservative estimate of the Mercado Institute at George Mason University.   

The Wall Street Journal editorial board gives her credit for ambition – but not much else.

“You certainly can’t criticize the new Iowa Democratic caucus front-runner for lack of ambition, Despite criticism from fellow Democrats, she is sticking to her plan for a government takeover of American health care, including the elimination of private insurance that 170 million or so Americans now have. She continues to claim that this will cost “not one penny in middle-class tax increases. She walks on water, too.”

Liberal columnist William A. Galston describes her plan as “Elizabeth Warren’s Health-Care Hara-Kiri”, a suicide pact for her political future. Here’s how he describes the plan:

“She has zoomed past the last off-ramp and is now fully committed to a plan that would revolutionize the way health care is financed and delivered in the U.S. She can’t run on this plan in the primaries and then shift to something more modest in the general election, even if she wants to. If Ms. Warren is the nominee, Medicare for All is what she’ll take to the country. Given the centrality of health care in our political debate, this plan will be much of the basis on which she is judged.”

Galston correctly points out that more than 218 million Americans now are covered by private insurance plans, of which 179 million are employer-provided. Many of these plans are the result of tough negotiations in which employees have given up wage increases for more generous health insurance benefits. Asking these workers to give up these hard won gains in return for a promise of what they’ll get from the government is a hard sell.

Economists and mathematicians will argue about the numbers to pay for Warren’s plan, or the Sanders plan, but health insurance analyst Robert Laszewski has another important point of view. He notes the current healthcare system is largely financed by the private insurance market. Current Medicare and Medicaid rates are often below providers’ costs but these are supplemented by higher rates for private insurance. If the entire private insurance system is shut down, as Warren and Sanders propose, providers reimbursement rates will suddenly be cut in half. (See the chart below.)

Laszewski poses the relevant questions: What would happen to your local hospital if suddenly the nation went to a single-payer Medicare for all system and 177 million out of a total of 298 million people had their hospital payments cut almost in half? Or what would happen to your doctor’s practice if suddenly your doctor had their reimbursement for about 60% of their patients cut by an average of 22%?

When you consider these crucial questions, it becomes obvious that the real issue is not whether or not you can raise enough money to pay for Medicare for All through higher taxation, but rather what will be left of the healthcare system providers when you cut their payments across the board to Medicare rates? As a healthcare provider, I can assure you the current doctor shortage will go from serious to catastrophic overnight.

 

Democratic Healthcare Choices

 

It’s good to have choices. Many years ago there was a Fram oil filter ad that showed an auto mechanic holding up one of their oil filters with a wry smile saying, “Pay me now (for the oil filter) or pay me later (for the engine repair).” One way or the other he was going to get your money; either in the short run or later.

I was reminded of this ad by the recent Democratic presidential candidate debate. They argued over slight variations in their healthcare plans – but sooner or later they were going to get to the same place – socialized medicine.

Senator Bernie Sanders is the leader of the charge for Medicare for All – his form of socialized medicine that would take effect immediately and eliminate all private healthcare insurance. In the first Democratic debate nearly every leading candidate including Kamala Harris, Elizabeth Warren, Kirsten Gillibrand, Corey Booker, and Pete Buttigieg agreed with Sanders. The only leading candidates that disagreed were Joe Biden and Amy Klobuchar.

Now, after the second debate, many are coming out with nuanced versions of their support. According to The Wall Street Journal editorial board, Harris now proposes her own version of Sanders’ plan that would move the country to single-payer healthcare over the next 10 years, rather than in four years as the Sanders bill outlines in the Senate.

WSJ says, “Ms. Harris says she’ll provide a “common-sense path” for folding everything from Medicaid to employer insurance into the federal system. She conveniently leaves out details on how she’ll land this Evel Knievel jump, but her political goal seems to be to claim that she wouldn’t eliminate private insurance.”

“She does this by saying that private offerings will continue to exist similar to Medicare Advantage, the program that lets private plans compete for retiree business. One reason to be suspicious: Democrats have hated Medicare Advantage for years and raided the program to pay for the Affordable Care Act.”

Joe Biden tries to paint himself as the moderate in this debate because he wants to keep the Affordable Care Act (ObamaCare) intact, which preserves the private health insurance that 180 million Americans get from their employer. However, Biden is once again promoting the “Public Option” be added to ObamaCare, an idea too radical for Democrats who controlled Congress when the ACA was passed during the Obama-Biden years.

The Public Option (see Public Option Kills Private Insurance) is just a slower path to single-payer healthcare than Medicare for All. The Public Option is a business model that can’t fail because it is backed by the taxpayer. When lowball premiums lose money for the business, the government will simply raise your taxes to pay the shortfall. No private insurance company can afford to compete and lose money. Eventually it will crowd out private insurance and you’ll be left with only government –run healthcare.

So the choices are clear:

  • Sanders’ Medicare for Allsingle-payer healthcare in 4 years
  • Harris’ Medicare for Allsingle-payer healthcare in 10 years
  • Biden’s ObamaCare with Public Optionsingle-payer healthcare sooner or later

 

All three choices eventually will eliminate your private health insurance.

Just like the Fram oil filter mechanic: single-payer healthcare now, or later. Your choice!

(Since I first wrote this post, Senator Elizabeth Warren has become the front-runner and has doubled down on Medicare for All.)

What is Trump Doing for the Poor?

 

I recently debated a dear friend on the merits of the Trump administration and found him extremely hostile and convinced that Trump can do nothing good for America. This is understandable since the mainstream media agrees with this narrative. Certainly, Trump’s style and manner are offensive to most fair-minded people, including me. But the real question is how are his policies affecting Americans?

My friend was particularly convinced that Trump is doing nothing to help the poor. The liberal talking points would agree with him. They say Trump’s tax cuts have benefited only the wealthy and big corporations. They say the poor and middle class have been left behind. What is the truth? Truth matters, because all our emotions won’t change anything if our facts are wrong.

The Wall Street Journal editorial page addressed this very issue today. They pushed back on liberal House Speaker Nancy Pelosi’s response to the latest economic news. Pelosi’s statement after the surprisingly good monthly employment jobs report was: “The October jobs report offers further evidence that the Republicans’ disastrous special interest agenda is hollowing out the middle class while enriching the wealthy and well-connected.”

Here is the response to Pelosi’s statement from the WSJ editorial board: “What hipster doofus wrote that? The real news from October is that the labor market remains remarkably resilient despite this year’s downshift in the economy to 2% annual growth. Hundreds of thousands of workers are returning to the workforce, age gains are healthy, and those gains continue to spread to non-rich corners of the labor force.”

Job growth has averaged 176,000 new jobs in the last three months, even better than the 167,000 new jobs per month from earlier in 2019. More impressive is that the labor force continues to expand, with 325,000 new entrants in October and more than a million since July. That’s more than a million Americans who decided looking for work was better than taking welfare. This lifted the labor force participation rate to 63.3%, which is rising despite baby boomer retirements. The employment ratio for prime-age workers, ages 25 to 54, rose to 80.3%, which is the highest since January 2007. Can there be any better indicator of the success of the Trump economy?

The editorial board took the unusual step of outwardly chastising Pelosi: “Hollowing out the middle class? Come on, Madame Speaker. The economy you’re describing is closer to the employment ratio during the Obama expansion, which was still 76.4% in January 2014, four and a half years after the recession ended.”

“The current job market is attracting middle and working-class workers who have been on the sidelines for years. Perhaps wages are now rising enough to make work more valuable than public benefits, or maybe job openings are finally available that meet their skills. Whatever the reason, the jobless rate for African-Americans fell again to 5.4%, a new low since records have been kept, and the third successive month at 5.5% or lower so it’s not a statistical anomaly. The labor participation rate for Hispanic-Americans reached 67.3%, the best since September 2010.”

They go on to point out that far from an economic boost only for the wealthy, the Trump economic boom has not only put poor and middle-class workers back to work, but their wages have increased an average of 3% over the last year. Economist Steven Moore puts that wage increase at 6.8% for the middle class. These gains may actually be dampened somewhat by the large number of new entrants into the work force replacing retiring seniors because these entry-level workers can be hired for less.

Let’s see if the picture is clearer now: Trump’s economic reforms have created more jobs for the poor and middle-class, raised wages for everyone, and lowered unemployment rates for African-Americans to historic lows and for Hispanic-Americans to the lowest numbers since 2010. Add to that the improvement in education for minorities through School Choice initiatives and you have multiple reasons why the poor and minorities should be supporting Trump. Sadly, you’ll never hear that from the mainstream media – or Nancy Pelosi.