Reading Elizabeth Warren’s Healthcare Plan, Part 3

Part 1: Quotes directly from Elizabeth Warren’s official website about her healthcare plan, from which I am drawing all of my information for subsequent posts

Part 2: Reviewing her plans for dealing with pharmaceutical prices

Elizabeth Warren’s plans for the healthcare system fall into 3 categories:

1. General details that will apply regardless of how close she gets to achieving Medicare for All (M4A)
2. Her plan to transition to M4A
3. Her vision of what M4A would look like if it is achieved

So let’s continue where we left off in Part 2 and finish looking at the other things she plans that fall into the first category . . .

Improving the Affordable Care Act

Just as a little review, as the health insurance market stands today, people who don’t get their insurance through their employer have to go to the private market to get it. (There was originally a tax penalty if you weren’t insured, but President Trump got rid of that.) The best place to shop for plans on the private market is healthcare.gov, for a couple reasons. First, it shows you your insurance plan options in an easy side-by-side comparison format to make shopping easier. Second, for anyone who might have to pay approximately 10% or more of their income on insurance, that website will connect with the IRS website to pull your income information and then allow you to buy the plan at a reduced rate (and sometimes lower the deductible on that insurance plan too), and the government covers the rest and sends its portion directly to the insurer for you.

These plans on healthcare.gov are referred to as “ACA plans” because the ACA is the law that established that website and those subsidies. Elizabeth Warren plans to improve access to ACA plans in a few ways. First, she will re-fund programs that help people get signed up for coverage on healthcare.gov. She will also make those ACA subsidies apply to lots more people by lowering the income cap to 5%. And it looks like she will also try to cover all out-of-pocket costs for people who earn less than 200% of the federal poverty level. She will also outlaw “junk plans” that are currently allowed as alternatives to ACA plans but have fewer things covered.

My assessment: I guess by “improve the ACA” she mostly means “get more people covered with ACA plans.” And it seems pretty straightforward that those policies listed will work. This does nothing to accomplish her other goal–of making healthcare cheaper–but this is just a short-term effort to get more people insurance until she can bring about her bigger goal of M4A. And she’s doing it in a clever way by starting to have the government shoulder more of the burden of paying for healthcare insurance, which will ease us into her eventual transition to M4A.

But did you notice the glaring omission? She says nothing about the tax penalty for being uninsured. I’m guessing she’s also going to re-implement that, which will help her accomplish her immediate goal of getting more people covered with ACA plans by bringing healthy people back into the insurance pool. I guess talking about plans to make people choose between buying an expensive product they think they might not need or else pay a big tax penalty is not a strategically smart thing to bring up when you’re running for president.

My recommendation: Her plans here make sense given her goal of transitioning to M4A. In the short term, use what we’ve got (“improve the ACA”) in a way that helps start to transition more of the responsibility of paying for healthcare to the government. In other words, get more people into the current system and cover more of their premiums with government funds. I wish she’d be up front about planning on re-implementing the uninsured tax penalty. If she wants to make that tax penalty effective, it has to apply to everyone and be large enough that the vast majority of people will choose insurance rather than choose to pay the penalty and get nothing in return.

I’ve said nothing of my concern that she doesn’t adequately address how to make the actual cost of care cheaper, but I also understand why. This is only a short-term plan to ease us into her transition to M4A–she’s not looking at it as a long-term thing. So I’ll save my comments about that topic for a later post in the series when I describe her vision of what M4A could look like.

And maybe this is a good time to remind readers that I’m making no judgments on the moral aspects of her plan. I’m not trying to argue whether government intervention in healthcare is good or bad. You can decide that for yourself. I’m just trying to evaluate how effective her plan would be at addressing the current issues in our healthcare system.