Warren: Some private insurance employees who lose their jobs under Medicare for All can just go work in different areas of insurance

A leftover from Friday. Turns out it’s not just the math in Warren’s plan that’s based on ludicrous assumptions.

They’re gonna go work in life insurance or auto insurance? How many jobs does Warren think need filling in those arms of the industry?

By some estimates, fully 600,000 people would face unemployment once government nationalizes health insurance. Per the WSJ, it could be much higher with knock-on effects: “Independent estimates have pegged the potential job losses at two million as the private health-insurance industry disappears and health providers need fewer people to manage billing.” I assumed Warren’s solution to that problem would be obvious: America will need a leviathan new health-care bureaucracy to administer Medicare for All and laid-off insurance workers will need jobs, and so demand and supply will naturally converge. Most private insurance employees will become government insurance employees.

But that’s certainly not true. Many roles filled by laid-off workers at different private insurance companies will become redundant once the entirety of American health insurance is consolidated under one federal roof. And even if Warren could find government jobs for all of them, “we’re gonna nationalize the workers too” isn’t a stellar selling point. Americans intuitively dislike the idea of government bureaucracy ballooning, even if it’s an absolute necessity under M4A.

She does acknowledge in passing that some would go to work for government, e.g. Medicaid. And she notes that there’s five years of financial support built into the plan for laid-off insurance industry workers as the country transitions from a private system to a public one. Bernie Sanders’s Medicare for All plan has a similar transition mechanism — at a cost of $61.5 billion per year. But that’s okay, the socialist mag Jacobin noted last year, because M4A is likely to be running a *surplus* of $30 billion annually. Possibly. Hopefully.

So it pays for itself, really. Or half of itself.

I wonder how much the GOP message against Warren will focus on disruption to the health insurance industry compared to the expected focus on the potential cost of the plan. Disruption isn’t necessarily a bad thing: If one firm can provide a service more efficiently than another firm, there’s nothing wrong with the former putting the latter out of business. (The “firm” in Warren’s case is the famously efficient U.S. government, of course, which doesn’t have to worry about profitability the way a private firm does.) Plus, voters are self-interested. If you could assure the electorate somehow that M4A would really provide better health care at the same or lower cost, most would be willing to let private health insurance employees suffer a little temporary unemployment. The killer Republican critique will be cost, particularly the dubious math used by Warren to try to get her plan’s books to balance:

“The gap between what she says it will cost and what it will really cost is in the trillions of dollars, and the middle class will be on the hook to fill that gap,” says Jim Kessler, the executive vice president for policy at Third Way, a centrist Democratic group that has been critical of single-payer proposals. “My guess is that with accurate numbers, she’s somewhere between $5 trillion and $10 trillion short. [Her plan taps] the rich and corporations as much as possible. Who’s left? The middle class.”…

The bottom line is that across all sectors of the medical industry, the Warren campaign assumes that her single-payer plan will squeeze much greater savings relative to the current system than the Urban Institute believes is possible—or, in some cases, even desirable. “We thought we were being pretty aggressive in the assumptions we are making in terms of lowering the cost of the program over time,” Linda Blumberg, a co-author of the Urban Institute study, told me. “They were clearly more aggressive.”…

The only way to make that math add up is to pay doctors and hospitals and drug companies a lot less, as Warren has proposed,” he told me. “The fundamental question here is: Can you lower health-care prices enough to offset the increased costs from universal coverage and very comprehensive benefits?”

Warren thinks she’ll make up the gap in her estimate by taxing billionaires but that strategy can only work for so long before the money runs out there too.

In the end, she was destined to paint herself in a corner by championing M4A. She did it in order to keep pace with Bernie for the progressive vote, knowing that this issue is the ultimate ideological litmus test for lefties, but then she faced a terrible choice on whether to be more aggressive than Sanders was in her proposal or less aggressive. She ended up being more aggressive, insisting she can squeeze enough savings out of the program that she won’t need to follow Sanders’s lead in taxing the middle class. But that’s preposterous; of course the average joe will pay more in taxes and lefties know it. The alternative, with Warren instead opting for a watered-down M4A plan or abandoning M4A altogether, was a nonstarter since it would have cost her a chunk of the progressive vote she worked so hard to win. So she was stuck with a fanciful single-payer plan, one that would somehow out-Bernie Bernie, which was destined to piss off Sanders supporters who recognize it as a con and to piss off more centrist Democrats in the Biden ranks who fear that President Warren is going to end their private health insurance.

I wonder how strong her polling will remain as that political pincer movement advances, with Bidenites calling her a socialist and Berniebros deeming her a pretender who lacks the nerve to defend the fiscal policies that M4A inevitably requires.

Here’s SNL having some fun with her this past weekend. They’re friendly to her as always, but note the line about how “money doesn’t exist.” That’s exactly how the GOP will caricature her beliefs next fall. It’s not much of an exaggeration.