Fact-Check/Analysis: Elizabeth Warren’s Claim that Her Medicare for All Plan will not Raise Taxes on the Middle Class: Mostly False

By Nathan Seelig 

Senator Elizabeth Warren (D-MA), a presidential candidate, released her plan to finance Medicare for All, her policy aimed to provide healthcare to all Americans. Warren had faced strong criticism after refusing to say whether her plan would raise taxes for middle class Americans. Instead, she would pivot back to her point that “costs [would] go up for wealthy, for big corporations, [and that] they [would] not go up for middle class families,” while refusing to say whether or not taxes would rise for them. 

Throughout the course of the Democratic primary, the debate over how to improve healthcare standards has been contentious, so many of her opponents jumped on her lack of clarity as to how she would handle costs. As her rival, South Bend, In. Mayor Pete Buttigieg, proclaimed during the debate, “Your signature is to have a plan for everything, except this. No plan has been laid out to explain how a multi-trillion dollar hole in this plan that senator Warren id putting forward is supposed to get filled in,” referencing its high cost.

Now, Warren has released a tax plan that she says proves Medicare for All can be paid for. “I did the homework. I got the experts to check my math, and the numbers are clear: #MedicareForAll is the only plan that gives everyone in America full coverage. And we can do it without raising taxes one penny on middle-class families,” she tweeted. 

Warren’s campaign estimated that Medicare For All would cost roughly $20 trillion, compared to the $50 trillion they estimated the U.S. currently spends on healthcare, despite economic estimates that say Medicare for All could cost as much as $30 trillion in the next decade. Her plan has several keys elements. First, Warren plans to raise $1.2 billion by reducing defense spending and enacting comprehensive immigration. Second, rather than paying healthcare premiums to insurance companies, businesses would instead pay an “Employer Medicare Contribution” that would add an additional $8.8 trillion. Third, $2.3 trillion would come by putting an end to tax evasion and fraud. Fourth, taxes on the richest 1% of Americans would generate $3 trillion. Fifth, corporate tax reform as well as financial transaction tax of 0.1%, would add up to 3.8 trillion. Finally, with employees not having to pay for premiums, their increased salaries would add a total of $1.4 trillion of revenue, through the current taxation rates. 

The question remains: Would tax rate rise for the middle class Americans? As mentioned above, one aspect of her plan involves an “Employer Medicare Contribution” that, according to her estimates, would cost employers 2% less than healthcare premiums currently do. The law states that employees can seek higher wages and not receive health insurance and vice versa. However, Warren’s proposal would require most companies to provide all of their employees with health insurance, providing employees with health insurance, which would likely come out of some of their paychecks. 

For small businesses, providing employees with health insurance would not be required, but as soon they were to have 50 employees, they would be mandated by law to provide all of them with health insurance, which would dramatically raise their costs. Arguably, companies would be reluctant to grow their businesses, or in the case of them meeting this threshold, they would need to lower wages for their employees. The latter happening would likely decrease the additional tax revenue, another key part of Warren’s plan. Warren’s campaign has stated that these criticisms are beside the point, as her plan would reduce total costs and spending on healthcare. 

Many people, such as Ady Barkan, have praised the plan as a cost-effective way of paying Medicare for All, saying it could save as much as $11 trillion in the next ten years. Others, like former Vice President Joe Biden, Warren’s main competitor for the Democratic presidential nomination, argue that her plan would raise costs in middle class Americans equivalent to $9 trillion. Many, like Senator Ben Sasse (R-NE) have characterized the plan as “make-believe math.”

Warren’s plan does not levy an official tax on middle class Americans. However, elements of the plan mentioned above would likely, at least temporarily, come out of the paychecks middle class employees receive. It is also important to note that there is little evidence that confirms whether Warren’s estimates about how much revenue each part of her plan would be enough to cover the cost of Medicare for All. Therefore, we rate the claim that this plan will not raise taxes on the middle class as mostly false.

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