Elizabeth Warren reveals plan to fund Medicare for All and insists ordinary Americans will not pay higher taxes

Massachusetts senator responds to critics who say plan is unrealistic

Democratic frontrunner Elizabeth Warren has revealed how she will fund her controversial Medicare for All plan, and insisted ordinary Americans will not pay “one penny” extra in taxes.

As a new poll in Iowa, the first state to vote, showed her with a small but clear lead over Bernie Sanders, Pete Buttigieg and Joe Biden, Ms Warren published a plan to to raise $20.5 trillion over 10 years to pay for a programme that guarantees healthcare for all Americans.

At its core, is a proposal to increase taxes for businesses and wealthy individuals. She said her plan would save American families $11 trillion in current out-of-pocket spending.

“Health care is a human right, and we need a system that reflects our values,” she wrote in a 20-page essay on Medium. “That system is Medicare for All.”

A number of polls place the Massachusetts senator at the front of a crowded pack of Democrats seeking to take on Donald Trump in 2020, and many of the candidates support a version of Medicare for All, a plan first proposed in an election campaign by Mr Sanders in 2016, and which proposes expanding the nation’s existing state-funded healthcare system.

That it has moved from a fringe idea to something that is front and centre of many Democrats’ thinking, is testimony to the tenacity of Mr Sanders, the 78-year-old Vermont senator.

But Ms Warren, 70, has faced criticism, including from some within her own party such as Mr Buttigieg and Amy Klobuchar, who have questioned whether she would require working and middle class Americans to pay higher taxes to fund the plan.

On Friday, in a move intended to address those concerns, she insisted her proposal would not require extra taxes from such people.

“Not one penny in middle-class tax increases,” she wrote. “That’s it. That’s the choice. A broken system that leaves millions behind while costs keep going up and insurance companies keep sucking billions of dollars in profits out of the system — or, for about the same amount of money, a new system that drives down overall health costs and, on average, relieves the typical middle class families of $12,400 in insurance premiums and other related health care costs.”

Ms Warren, who has proved herself a sharp debater with a grasp on the minutiae of her policy proposals – her catchphrase has become “I’ve got a plan for that” – said the $20.5 trillion would come from different areas.

Around $8.8 trillion would come from a new “employer medicare contribution,” replacing the $9 trillion employers are expected to spend between 2020 and 2029 on employee healthcare costs, according to MIT professor Simon Johnson, a former chief economist at the International Monetary Fund, University of Michigan economist Betsey Stevenson and Mark Zandi, an economist at Moody’s Analytics.

Another $1.4 trillion would be generated from existing payroll taxes. She said a new levy on financial firms would generate $900bn and a new tax on large corporations would generate $2.9 trillion. The top 1 per cent individuals would pay a new wealth tax generating $3 trillion. Altogether, these new taxes on big business and the wealthy would generate $6.8 trillion, they said.

Improvements in tax enforcement, immigration reform that would result in more individuals paying taxes and an $800 billion cut to a Pentagon “war fund” that has been the subject of bipartisan criticism.

As Ms Warren championed her plan in Iowa, which holds its primary on February 3, some raised doubts.

Former Iowa governor Tom Vilsack claimed the proposal was unrealistic. Speaking at a panel discuss on rural politics, he said: “One sliver of society isn’t going to pay for the rest of us.”

Additional reporting by Reuters