Public vs private: How Joe Biden's healthcare plan compares to Elizabeth Warren's plan

Posted at 10:08 PM, Sep 13, 2019

Public versus private. Government versus private sector. Big bureaucracy versus big business.

Delivering healthcare to Americans is once again a central question in this year's presidential election, and the plans proposed by two of the top Democrats in the 2020 field have very little in common.

For Elizabeth Warren, she is proposing an entirely public plan with no role for private insurance.

At the June presidential debate, Warren agreed that she would eliminate private insurance if she has her way.

“Look at the business model of an insurance company,” Warren said. “It's to bring in as many dollars as they can in premiums and to pay out as few dollars as possible for your health care"

But a change from private to public would be a dramatic change for most Americans. Nearly 66 percent of Americans used private insurance in 2017, according to U.S. Census figures.

Also, a number of Americans are employed by insurance companies. According to the Insurance Information Institute, more than 500,000 Americans are employed in the insurance industry.

These facts are not lost on Biden, who advocated at Thursday's debate to maintain the private insurance system.

"I think the Obamacare worked," Biden said at Thursday's debate. "I think the way we add to it, replace everything that has been cut, add a public option, guarantee that everyone will be able to have affordable insurance, number one."

Warren claimed during Thursday's debate that a Medicare-for-All system would lower overall costs.

"And the answer is on Medicare for All, costs are going to go up for wealthier individuals and costs are going to go up for giant corporations," Warren said. "But for hard-working families across this country, costs are going to go down and that's how it should work under Medicare for All in our health care system."

The Congressional Budget Office released a report in May on the total cost of moving to a government-run healthcare system. The report says that nearly half of healthcare expenses in the U.S. come from the private sector, with the rest being funded through federal, state and local governments.

Overall, Americans spend $3.5 trillion in healthcare per year, the CBO says. But the CBO could not put an estimate on exactly how much the average person would spend with a Medicare-for-All system. The report says a number of factors such as whether state governments will pay into the system, and whether citizens can opt out of public insurance all options would affect costs.

The CBO states that the federal government has lower administrative costs than private insurance. The cost to administer all of Medicare was 6 percent, compared to 12 percent for private insurers in 2017, the CBO says.

The CBO added that administrative costs could decrease even further as a Medicare-for-All system would have fewer eligibility exclusions.

Although both Biden and Warren still lack key details for their plans, Biden has stated his goal is to have 97 percent of Americans insured. Warren claims that nearly 100 percent is possible with her plan.

As of 2017, 91 percent of Americans were insured. The number of uninsured in 2010, at the time of Obamacare's passage, was nearly double, according to the Census.

Even without changes to law, healthcare costs will likely rise in the U.S. Government estimates peg healthcare spending per year at $6 trillion by 2027. The rate that healthcare expenses will rise will outpace overall GDP by .8 percent per year, according to government figures.