Presidential contender Elizabeth Warren says employers who provide health coverage to workers would collectively save $200 billion over a decade under her "Medicare for All" proposal.
The nation's largest employers project that the total cost of providing medical and pharmacy benefits will rise by 5% in 2020, topping $15,000 per employee, according to a recent survey from the National Business Group on Health.
Warren's plan, which would eliminate employer-sponsored health insurance and replace it with a universal Medicare plan for all Americans, would redirect what employers are already paying private insurers to the U.S. government, according to a new outline released Friday.
To ensure employers will pay less in the new system, Warren said she would reduce their contributions by 2% of what they are currently giving private insurers. Employers currently offering health benefits under a collective bargaining agreement will be able to reduce their contribution if they pass along those savings to workers.
People who are self-employed would be exempt from making contributions. Small businesses — employers with fewer than 50 employees — would also be exempt if they aren't already paying for their workers' health care, according to the outline.
"By asking employers to pay a little less than what they are already projected to pay for health care, we can get almost halfway to where we need to go to cover the cost of my Medicare for All plan," Warren said in her post.
The plan from Warren, a front-runner in the 2020 presidential race, may startle some workers with employer-based health insurance, some of whom have selected more pricey insurance plans with lavish health benefits. Under Medicare for All, Warren says Americans can select the health-care provider of their choice. Employers who offer generous health benefits to attract talent may lose that competitive edge.
Still, it could ease the strain of constantly rising health-care costs for employers.
About 153 million Americans receive employer-sponsored health insurance, according to data from the Kaiser Family Foundation. Under the current U.S. health system, all employers with 50 or more full-time employees must offer health-care coverage or pay a fine.
To help curb costs, large employers in recent years have embraced some of the ideas being debated in Washington, such as passing drug price discounts directly on to workers.
They're also increasingly open to the government playing a bigger role in controlling health costs — even expanding Medicare access under some circumstances, according to the National Business Group on Health annual survey of nearly 150 of the nation's largest employers.
— CNBC's Bertha Coombs contributed to this report.