Who knows how any of this will be implemented in reality, but as for Warren's plan: that's not how it's set up. When it comes to making "Medicare" payments, employers would pay LESS than what they're paying private insurers now.
The plan has them no longer paying private insurers anything. Instead, they would take that same batch of money and pay it into "Medicare." On top of that, the plan is for them to pay a little bit less - only 98% of what they used to pay private insurers. They get a 2% discount. So, if an employer were paying $10 million in private health insurance premiums on behalf of their employees, under Warren's plan, they would start out paying "Medicare" only $9.8 million.
And you're right, employers can reduce the amount they pay into Medicare by redirecting money to their unionized employees instead. That doesn't increase any cost to the employer, and it would work out well for any employees who get a direct raise in wages or pension benefits.
Let me clarify things because her plan is sort of vague on the Union side but I was only talking about the Union aspect in the section you're replying to here. She stated clearly that employers would start at 98% and then slowly work down to a national average over a period of, what 8 years, I forget, that aspect's irrelevant to this part however. But for Unions she doesn't specify what amount those employers would start at. Her plan's meant to incentivize the employer to pass on the portion of an employee's wages that have essentially been collectively bargained for as health insurance that those Union members would no longer receive so I'm assuming that an employer with this type of collective bargaining deal would start out of the gate paying
more than the 98% that other employers would start at. I suppose it's possible she really went Union friendly and is going to start out all employers at 98%, period, and even during the transition phase a unionized employer who's collectively bargained to have the Union cover all the cost of healthcare can go below the national weighted average, which would be cool, but as I said this part is kind of vague. Probably because there's lots of different scenarios that don't fit nicely into neat little word bites.
Since I'm no longer on my phone I'll address
Freakzilla again on his specific question. So to start, so we're all in agreement there's essentially three types of payments at play here. First is a portion of most of our paycheck that is assumed by the employer and the government to be going towards health care spending but isn't required to, so this is just part of your normal wage that goes into your check and you can buy employer provided health insurance with it, if you chose or pay the Obamacare fine if you chose(or not since it's dead now) but either way it's your money. Under Warren's plan, and well Sanders' or anyone elses really, we're keeping that money, it's your wage paid to you, companies aren't going to cut everyone's pay and it's not like your employer gave reduced wages to people who opted out of buying health insurance through the company. Right? Next is what the company pays for us in health care costs unbeknowst to its employees. We never saw this and this is the money I was saying we never would see. Under Warren's plan that money would get redirected to the Federal government at a 98% rate. Got it. Third, for
Freakzilla his union has essentially already bargained both the employees' and employers' health care contributions go to the Union so that the Union could provide health care and thus their base wage would be lower than it otherwise would have been had the Union negotiated a higher wage but with their Union members paying some of the cost of their healthcare. So at the start of Warren's plan, Union members with a plan like this would naturally be in a less attractive position than a Union that had a more traditional healthcare cost split with their employer as most employees will just get to stop spending the money they've been spending on healthcare and spend it on whatever they want instead while his Union members never got that money directly and thus they won't get to keep something they never had.
Hence why they'd need to renegotiate their contract to once again be more beneficial to its' Union members and why Warren provided an incentive to hopefully grease the wheels to entice an employer to either increase their wages, put more into a pension or whatever else the Union wanted to bargain for to further reduce the companies overall health care liability.
There'll be some economic repercussions. The stock market will freak out - especially the financial and insurance sectors. But the stock market isn't the economy. The biggest existential threat to our economy is extreme income inequality. It's like a largely-undetected cancer silently eating away at the foundations of our financial well-being. And if we don't heal this, it'll be catastrophic. The economy does best when there's a huge, healthy consumer class with enough income to buy stuff - like houses, cars, groceries, vacations, gadgets, games - which then generates even more jobs and businesses. The economy - and the country - desperately needs fairer support for the working and middle class.
Every few decades, the country has to suffer or bail out the economy because of some critical failure in the private sector borne out from capitalism's most toxic tendencies allowed to run amok. And it always happens because the illusory temptation of crazy-high salary bonuses, inflated bumps in stock prices, more political donations has executives and politicians trading away our long-term well-being for their personal, short-term benefit. Somehow they scam a big part of the population into believing this sabotage is in their best interest too. We need to stop falling for it.
While I do agree with this I do think we also need to look towards the likely medium future as well. There's a reason that the United States recovered from the last recession quicker and why we routinely post more growth than most European countries and that's because despite European countries being stabler and having better living conditions our environment does foster more growth and we're talking about sacrificing some of that growth. I get you're for it, I'm also for it but we're going to be doing that while simultaneously facing major employment upheavals. We know the transportation industry is set to be decimated by self driving cars. Fast food's always looking to automate. I hate the gig economy but it's going to continue being a thing. We're talking about purposefully gutting the private health insurance industry. I'm not just talking silly shit like the stock market shit here, I'm talking about real physical jobs and shit. Continuing to tie health care through employers, even if invisibly to the average citizen would have more negative effects moving forward, I believe, than fully decoupling health care spending from employers would. This plan would have been fantastic in the 50s and served us well for decades but as it is today I think it's going to be a major hindrance that would have to be re-litigated by Congress very soon.
Again, with Warren's plan contractors, the "self-employed" so to speak, won't pay into the system until they reach a certain amount(fair under any plan) and employers also aren't on the hook(not as fair). This is likely to be a huge growth area unless current trends fucking flip. Since businesses with more than 50 employees are on the hook for an employees' health care costs regardless of full or part-time status under Warren's plans there's less incentive to hire an employee part-time than if health care costs were separated from employment. So in my opinion it looks like this plan is creating a situation that incentivizes contract and full-time employment and punishes part-time where as I think the proper thing to do would be to change the calculus completely and make it to where, in an effort to keep and create as many jobs as possible, it's cost neutral to an employer whether they hire you on contract, part-time or full-time, it should make no difference to the employer financially outside of paying your wages, which would hopefully slow contract employment growth and give more stable part and full-time employment to more people.
Long story short, if a company only needs labor for 20 hours but they're going to have to pay 98% of your health care costs if they do hire you more are likely to opt out of hiring you and try and spread that labor onto existing employees or do it as contractual work. Obviously that's a similar situation to what we have now but many companies never offered health care plans to their part-time employees so we're moving the bar. So where today it's that companies aren't giving enough people full-time employment under Warren's plan I think that'll change to just not giving enough people employment, period.
