Elizabeth Warren's shift puts health insurers in the 2020 Democratic crossfire

Key Points
  • In reaffirming her support for a new, universal "Medicare for All" program, Elizabeth Warren called for ending the private health insurance industry – a controversial step she had previously shied away from.
  • Because of Warren's status as a top-tier contender, Democratic strategists second-guessed her stance.
  • One senior Biden advisor told John Harwood that Warren's position would cripple her general election chances.
Sen. Elizabeth Warren (D-MA) speaks to the media in the spin room following the first night of the Democratic presidential debate on June 26, 2019 in Miami, Florida.
Drew Angerer | Getty Images

The first debate of the Democratic presidential campaign has illuminated its theme and added a plot twist – leaving an American industry's fate in doubt.

The theme is economic change. Despite solid growth, corporate profits and stock prices, Sen. Elizabeth Warren rallies progressive activists by advocating fundamental rearrangements in the name of lifting average Americans at the expense of the rapacious rich.

"We need to make structural change in our government, in our economy and in our country," Warren said in the opening moments of Wednesday night's NBC/MSNBC/Telemundo debate. Her sweeping tax, spending and regulatory proposals, and the response of nine rivals to them, set the framework for the debate's economic discussion.

Thursday night's leading figure, Joe Biden, sets the opposite edge of the Democratic spectrum. At a fundraiser last week, the former vice president told wealthy donors he could ameliorate poverty and income inequality without punishing or demonizing them.

"No one's standard of living would change," Biden assured them. "Nothing would fundamentally change."

The plot twist involves health care reform. In reaffirming her support for a new, universal "Medicare for All" program, Warren called for ending the private health insurance industry – a controversial step she had previously shied away from.

"Look at the business model of an insurance company," Warren explained. "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.

"That leaves families with rising premiums, rising co-pays, and fighting with insurance companies to try to get the health care that their doctors say that they and their children need. Medicare for All solves that problem."

Of the nine others on stage, only New York City Mayor Bill de Blasio joined her in that stance. Longshot former Rep. John Delaney, a Biden-style moderate, warned that eliminating private plans could prove politically catastrophic in 2020 against President Donald Trump.

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"A hundred million Americans say they like their private health insurance," Delaney said. "I think we should be the party that keeps what's working and fixes what's broken."

Because of Warren's status as a top-tier contender, Democratic strategists joined in the second-guessing. One senior Biden advisor told me Warren's stance would cripple her general election chances.

That prediction, whatever its merits, signals an easy-to-understand, concrete contrast for Biden to draw tonight with his rising progressive challenger. Self-styled Democratic socialist Bernie Sanders, who authored the Medicare for All bill Warren embraces, will anchor her side of the argument on night two.

Upstarts such as Kamala Harris and Pete Buttigieg, joining Biden and Sanders on stage tonight, will get the chance to begin defining their positions more clearly. Earlier this year, Harris found the fate of private health insurance too hot to handle – appearing to embrace the prospect of abolishing the industry, then subsequently backing off.

Warren's campaign and outside backers brushed off the fears of Democratic strategists. Her stance would help mobilize Democratic activists, they argued, and Republicans would accuse her of harboring socialist plans to abolish private health insurance whether she called for doing so or not.

Should she prevail for the nomination, political reality could later force a change in her position. But for now, the battle over how far Democrats should go has placed the likes of Aetna, Humana and UnitedHealth in the crossfire.