Elizabeth Warren Is More Health-Care Cipher Than Firebrand

(Bloomberg Opinion) -- Health insurance stocks touched their lowest point of 2019 last week, with some in the market citing the impeachment investigation into President Donald Trump and the rise of Senator Elizabeth Warren in Democratic presidential polls as twin reasons for the decline. The thinking is, anything that boosts Democrats’ chances in the 2020 election would be bad for the industry, with most of the party’s candidates calling for at least some type of shake-up to the current health-care system. And Warren’s support of “Medicare for All” makes her a particular threat to the status quo, as that type of sweeping plan would largely eliminate private insurance.

The sector certainly would rather have the more moderate Joe Biden as the Democratic nominee, so it’s not surprising to see investors get jittery as Warren gains ground on the former vice president. Some also worry that her pro-consumer and generally interventionist bent might put a damper on dealmaking. Whether it was those concerns or the prospect of drug-pricing reform, biotech shares had a rough week as well.

Just how much of a threat would a Warren presidency pose to the current health-care system? A review of the Massachusetts senator’s policy position and recent messaging suggests a more nuanced attitude than many market participants fear. In fact, in many ways, she’s more a health-care cipher than firebrand.

Warren has detailed and unique policy proposals for tackling many issues — from student debt to big tech to income inequality — but the health-care portion of her website is conspicuously sparse. It mentions her support for Medicare for All and guaranteed coverage but offers few details on her preferred structure, implementation, or financing of such a plan.

As recently as this spring, Warren’s health-care message was relatively broad. She said on more than one occasion that there are multiple paths to universal and affordable coverage. Her position hardened at the first Democratic primary debate in June, when she said she was “with Bernie on Medicare for All” – referring to her support of a universal health plan like the one championed by Vermont Senator Bernie Sanders – but there’s still lingering ambiguity. After the most recent debate in September, Warren once again said she remains open to other options in answer to a CBS reporter’s question.

What this means is that single-payer fans are free to assume she wants exactly what they do: universal government-financed coverage that’s free at the point of care. At the same time, more moderate voters and hopeful managed-care investors can see someone who might be open to more incremental steps. It’s arguably a savvy strategy; it gives Warren broader appeal and certainly doesn’t appear to be hurting her in the polls.

An “all-of-the-above” approach arguably makes sense from a policy perspective. A four-year transition to a single-payer system gets mixed reviews from voters and might be hard to achieve, whereas concurrently working on easier-to-pass bills that boost the Affordable Care Act, introduce a public option, or allow Medicare buy-in could help a lot of people while Democrats hammer out the details of and build support for more significant change.

None of this is to say that a Warren presidency would be insurer-friendly. Her rhetoric tends to single out the industry as profiteers that get in the way of care, and her pioneering research into high rates of medical bankruptcy is a big part of her political origin story. It’s also still early in the campaign, and as she fleshes out her plans in greater detail, they may confirm a more radical approach. But it’s hard to watch her campaign and believe that she would focus single-mindedly on the pursuit of universal health care as envisioned by Bernie Sanders at the expense of other policy priorities.

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

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