Could Elizabeth Warren's health care plan actually work?

Also, we're a year from the presidential election. Who is the favorite?

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Today’s read: 9 minutes.

It’s a little longer than usual, only because we are covering Elizabeth Warren’s Medicare for All plan (a complex issue) and have a lot of news from the weekend to jump on.

Photo credit: Gage Skidmore / Flickr

Beto drops out.

Beto O’Rourke, once considered a frontrunner for president in 2020, announced he was ending his campaign over the weekend with little cash on hand and no momentum in the polls. O’Rourke said he does not plan to run for Senate in Texas, despite facing decent odds of being elected and lots of pushing from the Democratic party. You can read more from the Dallas News here.


What D.C. is talking about.

Medicare for All. Last week, Elizabeth Warren released her much-anticipated plan explaining how she’d pay for Medicare for All. Warren, whose campaign tagline is “I have a plan for that,” had come under increased scrutiny for not actually having a plan for her signature issue. During debates, she was evasive about whether the middle class would have to pay more in taxes. Her new plan says definitively that they wouldn’t. Warren says her plan would cost $20.5 trillion over a decade, about $14 trillion less than experts have estimated Medicare for All would cost. It would eliminate private insurance entirely, increase the burden on states, employers, Wall Street and the wealthy, and not raise taxes “a single penny” on the middle class. For a refresher on what Medicare for All is, you can read this August edition of Tangle: click.


What Democrats are saying.

This is the starkest difference we’ve seen between Sen. Bernie Sanders and Sen. Warren yet. Sanders has been open that his plan would be funded by a tax hike on everyone, including the middle class, and estimates it’d cost about $30 trillion over 10 years. Warren’s plan draws funds from employers, asking them to pay $9 trillion to the government, a slightly smaller percentage of what they currently pay to cover their employers’ health insurance. She calls this an “employer Medicare contribution.” Sanders says that plan would have a negative impact on job creation and wages and has instead suggested a 7.5 percent payroll tax, which he says will impact upper-income people more instead of low-wage workers. Warren responded to that criticism by saying employers would end up paying less to the government than they currently pay to insurance companies, and they wouldn’t need HR departments to “wrestle” with insurance companies.

Sen. Joe Biden, who has been a staunch critic of Medicare for All, called the plan “mathematical gymnastics.” The Atlantic, generally a left-leaning news outlet, said her plan “makes big assumptions about much money she’ll be able to squeeze from the health-care system.” Ezra Klein, the founder of Vox and one of the most authoritative health care voices on the left, said “there are places where I find Warren’s math or ideas a bit optimistic” and added that there needs to be more thought put into how we will increase supply to match the inevitable increased demand of cheaper health care. But Klein also notes that, if enough people hold on through the disruptive transition, there is no doubt “we could have a system that covered everyone for less than we pay now.” You can read more of his analysis here.


What Republicans are saying.

Get real. The Wall Street Journal editorial board covered pretty much all the bases, saying her plans “bear no relation to reality” and that “Donald Trump’s boast that Mexico would pay for the wall was more believable.” The editorial was one of the most generous takes on Warren’s plan from the right, and it was still seething with indignation. The Journal notes that Warren has already proposed huge tax increases on the wealthy and corporations to cover education, child-care and college debt forgiveness, and none of those increases — or the ones in this plan — take into account tax avoidance or the cost of collecting those taxes, which would require expanding the government. She says she’d raise corporate taxes and pull in $1.75 trillion over 10 years, but that’s assuming none of those companies relocate overseas. She says she’d cut funding for the military, a “hyper-fantasy” that would never pass the Senate even if it were controlled by Democrats. The Journal also laughs off Warren’s claim that this plan would “restore health care competition” by saying that the government will control and prices and reimbursements, so what incentive is there for health insurance companies to compete? Finally, the editorial says many of her plans have been attempted — and failed — under Obamacare. Closing the “tax gap” between what people owe and what they pay has never worked, nor have “bundled payments” or Obamacare’s Independent Payment Advisory board that were proposed in previous insurance laws.


My take.

On the surface, there’s plenty I like about Warren’s plan. I’m a middle-class worker, so of course I don’t want to pay more in taxes. My employer-provided health insurance is expensive, so of course I want to reduce its cost. Like most Democrats and 45 percent of Republicans, I also believe the rich aren’t paying their fair share of taxes in America. So Warren’s goal to close loopholes, enforce tax laws and increase taxes on billionaires is easy to get behind. She also proposed that 5 percent of the funds would come from achieving immigration reform and reducing defense spending. On both ideas, I could practically leap out of my seat clapping: our extraordinarily well-funded military should continue to be well-funded, but it’s also unthinkably wasteful and has little incentive to stop wasting money when we always double-down on increasing our defense spending. Similarly, our immigration system blows billions of dollars on practices that have not reduced illegal immigration, the cruelty in the system or the wait times for people who want to gain permanent status legally. Calling for reform in those areas to help insure more Americans is about as admirable of a goal as I can think of, legislatively.

But the flaws the Journal points out aren’t easy to sweep under the rug. Warren does seem to wave a magic wand and make some wildly optimistic assumptions about how costs will go down during a tumultuous overhaul like this. I’m appreciative of the fact her plan tries to slow down the transition into Medicare for All, but it’s also fair to note that it will only give employers time to reduce their own spending, wages, coverage, and so on. Even though his plan is far less detailed, the central premise of Sen. Sanders’ plan is that it will require a middle-class tax hike along with some of the reforms Warren calls for. His argument is that the increase in taxes will be smaller than the increase in savings, and it strikes me as a much more genuine argument to make than Warren’s, which is that she’s going to pull off the biggest government overhaul in American history without increasing middle-class taxes a single penny. There’s a lot more analysis to come out on this, and it’ll be interesting to see how her plan evolves going forward.


Your questions, answered.

Reminder: Tangle is for you, the reader. I want to answer your questions so you don’t have to wade through the news to find the information you’re looking for. You can submit a question by simply replying to this email and writing in.

Q: We’re officially less than a year from the presidential election, which is November 3rd, 2020. Who ya got? And why?

- Jason, Fredricksburg, VA.

Tangle: If the election happens today, I think we’re looking at a second term for President Trump. I believe in the polls, which the public, unfortunately, lost its faith in after 2016 (you can read about how we know the polls are actually right here). And despite Trump being underwater nationally, the only thing that really matters is how he’s performing in valuable swing states against top Democrats. Unfortunately for the field, he’s doing enough to win those states against everyone except Biden. That brings me to the exception in my faith in the polls: despite leading all Democrats today, I don’t think Biden will be the nominee. That’s mostly because I think as more Americans tune into the election they’re going to see a candidate whose message is messy, discombobulated, and who seems way older than his competitors. Despite dominating nationally, which is generally a sound way to predict the winner of a primary, I just think Biden is lacking the enthusiasm to pull it out.

And if Warren, Sanders or Buttigieg win the primary, which I think one of them will, this is the battle they’re looking to fight:

The other part of this is that I think Trump’s Republican support in Congress is all but solidified, barring any major new scandal in the next twelve months. The new talking point from Republicans seems to be that Trump did, in fact, solicit a quid pro quo with Ukraine’s president to investigate Biden, but because he didn’t follow through on it there isn’t a “committed crime,” just an attempted one. And even if he had done it, it doesn’t rise to an impeachable offense, even if it’s inappropriate. I think these defenses are hogwash, but they may do the work politically to keep Trump safe. That means he will, in all likelihood, finish out his term and go into the election with a solid base of Republican support across the spectrum and the talking point that Democrats tried to remove him from office against the will of the people. I wouldn’t underestimate the power of those two things.

There are caveats to my response, which essentially amount to “ask me in 10 months.” The candidate the Democrats move forward with will matter the most, in my estimation, but so will the state of the economy, whether we’ve entered any new wars, how successfully Trump can sell the progress on his border wall (which matters a great deal to his base) and what the rising costs of health care look like. One year is a long time, and a lot can change between now and then.

And to quickly play devil’s advocate on my own prediction: I do think I’ve seen convincing data that the liberal base is bigger than the conservative base, and if Democrats don’t elect Biden (which I don’t think they will), the enthusiasm around Warren or Sanders will be enough to get the base out. If that happens, and the huge bloc of young voters who seem to idolize those candidates actually vote, it’s totally possible that they wipe the floor with Trump. But even that depends on faith in young people voting, which has historically blown up in everyone’s face.

If you forced my hand and made me bet the house today, I’d bet that Trump loses the popular vote by a wider margin than he did in 2016 but holds onto the electoral college straight flush and gets re-elected. A year is a lot of time for things to change, though.


A story that matters.

Vice’s Allie Conti says she accidentally uncovered a nationwide scam on Airbnb after a bizarre last-minute change to a reservation led her down a rabbit hole of deception. Conti identified nearly a dozen linked accounts with false profiles posing as couples who were calling people minutes before their check-in time to move them to run-down homes instead of the ones they had booked, often citing an unexpected plumbing issue. Because of Airbnb’s policies, renters have struggled to recoup their losses after the fact. It’s a cautionary tale for the millions of people who use Airbnb each year. Click.


Numbers.

  • 1,710. The number of times President Trump has promoted conspiracies on Twitter, according to a New York Times analysis.

  • 46.9 million. The one-week total of social media interactions for Donald Trump, via data from NewsWhip.

  • 2.6 million. The one-week total of social media interactions for Joe Biden, the best of any Democrat.

  • +26 points. Trump’s advantage over Elizabeth Warren amongst registered white voters without a college degree.

  • $12 million. The amount of money Oklahoma will save when it releases hundreds of non-violent drug and property felons from prison today, in the largest single-day commutation in U.S. history.

  • 4. The number of witnesses in the impeachment inquiry who plan to skip their testimony Monday, defying subpoenas from Congress.

  • 9 percent. The amount of plastic produced that actually gets recycled, according to a new analysis from Quartz.


Have a nice day.

Apple says it is dedicating $2.5 billion to a financial package that will help address the housing crisis in California. Tech companies like Apple have shouldered a lot of the blame for the crisis, and critics say the company could help solve it by paying more in taxes, but the pledge will still put a dent in addressing the issue. 7,000 people are homeless in San Francisco alone, and Apple says it will put $1 billion of the $2.5 billion toward an affordable housing investment fund. Another $200 million will go toward a housing fund to support vulnerable populations. You can read more here.


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