By Susannah Luthi
POLITICO, April 28, 2020
Big businesses and powerful Democrats are aligning around a proposal to bail out employer health plans in the wake of staggering losses to the insurance industry, as some worry that a surge in uninsured Americans could give new life to a stalled push for “Medicare for All.”
The business and labor interests, who have strong economic motives to keep the current system of employer-based care, are rallying behind a Democratic effort to subsidize temporary extensions of newly unemployed Americans’ workplace health plans in Congress’ next coronavirus rescue package.
But to some progressives who cheered Bernie Sanders’ (I-Vt.) Medicare for All plan, the crisis has exposed what they see as the folly of tying employment to health coverage. Sanders, who’s advocating for an emergency version of his health plan during the pandemic, ripped the idea of propping up an expensive employer system in a POLITICO op-ed Tuesday.
“Not only would health insurance corporations make massive profits off the plan—profits that come at the cost of the American taxpayers—but it would still leave tens of millions uninsured or underinsured,” the former Democratic presidential candidate wrote. “And during this pandemic, a lack of insurance means more Covid-19 transmissions and more deaths.”
Employers, health care groups and unions badly want the employer system to emerge from the health crisis unscathed, believing it would ward off any new expansion of government health care. Joe Biden’s rise to becoming the presumptive Democratic nominee was a relief to the health care industry, which has spent the past two years attacking Medicare for All.
“This crisis will be over — not soon enough, but it will be over — and we need to fundamentally keep that highway back to jobs and job-provided health care open,” said Ilyse Schuman, senior vice president of health policy for the American Benefits Council, which represents major employers.
While the health industry and Democrats still want to bolster Obamacare, an unusual bloc is pressuring Congress to fully subsidize workplace premiums for the uninsured. Corporations would benefit because the employer-based system supplies a big tax break for benefits they can use as a recruiting tool. Unions would keep the generous coverage they have negotiated with corporations. And hospitals and doctors could maintain the big payouts from private insurance, which are far higher than the Medicare and Medicaid rates paid by government.
Unions, major insurers, hospitals and the consumer advocacy group Families USA have banded together through a group called the Alliance to Fight for Health Care, and are lobbying Congress to subsidize COBRA through the next stimulus package.
Supporters said COBRA aid would provide a backstop to hospitals and physicians, whose finances have been hurt by the cancellation of elective procedures during the crisis.
“Hospitals and providers are seeing tremendous expense and increase in uncompensated care and uninsured individuals coming in, while also seeing drops in elective procedures, so I think it’s money well spent in protecting employees in a time of crisis,” said Katie Mahoney, vice president of health policy for the U.S. Chamber of Commerce.
House Speaker Nancy Pelosi first pitched COBRA subsidies a month ago in a proposed alternative to the $2.2 trillion CARES Act that was ultimately approved by Congress.
Support from unions puts pressure on progressive Democrats, the driving force behind Medicare for All, to back the policy.
Unite Here, representing mostly service workers, said Congress must subsidize workplace plans. The union’s international president, D. Taylor, estimates 95 percent of its members are unemployed during the crisis.
Moreover, experts note, COBRA subsidies come with a huge price tag and ultimately help the middle- and higher-income people, rather than lower-income people more likely to work retail and service jobs affected by shutdowns.
“Almost no matter the employment outlook or time horizon, COBRA subsidies are unlikely to be the most cost-effective way of expanding coverage or relieving financial hardship,” said Matt Fiedler, former chief economist of the Council of Economic Advisers under the Obama administration. “They’re just not targeted on the right people.”
Alliance to Fight for Health Care: Supporting the employer-provided health care system
Here’s How to Cover Uninsured Americans During the Pandemic
By Sen. Bernie Sanders
POLITICO, April 28, 2020
As the coronavirus continues to spread, and the United States climbs closer to 1 million cases and nearly 60,000 deaths, we face an unprecedented economic and health care crisis that demands an unprecedented response. While we work toward an economic solution that keeps people on the payroll, Washington is also in the midst of a crucial argument over how to help cover the costs of testing, treatment and all other essential care for the millions of people who are now uninsured or soon will be as the country faces record levels of job loss.
Last week, the White House said it would give an unspecified amount of federal aid directly to hospitals to cover the costs of treating uninsured Covid-19 patients, but details have not been released, and the proposal leaves out all non-Covid-19—but still crucial—medical care. The week before, a handful of Democrats proposed spending hundreds of billions of dollars on expanding subsidies for COBRA—the program that allows those who have lost their jobs to continue, on a temporary basis, paying out-of-pocket for the health insurance coverage they received from their previous employer.
But there’s another, better way to guarantee that everyone in America gets all the health care they need, without cost, for the duration of the pandemic: Empower Medicare to pay all of the health care costs for the uninsured, as well as all out-of-pocket expenses for those with existing public or private insurance, for as long as this pandemic continues. Our Health Care Emergency Guarantee Act is more comprehensive than Trump’s vague proposal and less expensive than the Democrats’ COBRA expansion.
While almost all Democrats understand the severity of the crisis and the need to act, too many of them are proposing a totally inadequate response that would simply lock in place the dysfunction and waste of our current health care system.
Subsidizing COBRA, as they have suggested, would be both expensive and ineffective: Not only would health insurance corporations make massive profits off the plan—profits that come at the cost of the American taxpayer—but it would still leave tens of millions uninsured or underinsured. And during this pandemic, a lack of insurance means more Covid-19 transmissions and more deaths.
Expanding COBRA during the pandemic would do nothing to cover those who already lacked insurance. It also won’t help the many Americans who continue to receive employer-provided health care but are still prevented from going to the doctor by massive deductibles and co-pays. In fact, the average family with employer-provided insurance faces $4,700 in out-of-pocket costs every year. The deductible alone for the average low-income worker is $2,600 a year. Maintaining the status quo does nothing to address these extraordinary costs, made worse during the pandemic economy.
Further, COBRA subsidies will only cement the inequities of our current health insurance system. Right now, low-wage workers are, on average, enrolled in plans with low premiums but higher deductibles. On the other hand, higher-wage employees, often professionals, have platinum plans with much higher premiums and far superior coverage. Expanding COBRA, which subsidizes only premiums, would treat high-income workers who lose their jobs far better than low-wage workers who do, even though the latter have suffered the brunt of the economic damage wrought by the pandemic.
The Health Care Emergency Guarantee Act would treat all people equally. For the duration of this crisis, under the act, Medicare will cover all medically necessary health care, including prescription drugs, for the uninsured, whether those who have recently lost their jobs or those who have been long without insurance. It is simply irresponsible and dangerous to the public to allow millions of people in this country to go without health coverage as a pandemic rips through our communities.
The American people deserve a health care response to the pandemic that’s simple, easy to understand and doesn’t require them to fill out complicated forms or deal with an already stressed bureaucracy in order to receive care. Under this proposal, everyone in the United States, regardless of insurance coverage or immigration status, would be able to walk into a doctor’s office to receive the care they need without worrying about the cost.
Health Care Emergency Guarantee Act:
Summary of Emergency Guarantee Act:
By Don McCanne, M.D.
One of the painful lessons of the tragic Covid-19 pandemic is that we see how terrible the functioning of our health care financing system is, as if it weren’t already obvious before the pandemic arrived. We knew that the current system was overpriced and underperforming, resulting in unacceptable levels of financial hardship, physical suffering and even death, but the severity of the deficiencies have been compounded by the impact of the pandemic.
The Affordable Care Act was a misguided effort to reform the system since the deficiencies in the model were well recognized before it was enacted and implemented. Now the pandemic has brought these deficiencies into sharper focus as the hardship and suffering increase. A model that would have been less expensive and vastly more effective is the single payer model of Medicare for All. As far as financing the increased health care services required during this pandemic, Medicare for All would have been much more effective had it been in place. Medicare for All along with reinforcement of our public health services would have reduced the severity of the detrimental medical and economic impacts of Cobvid-19.
Now it is obvious that we should promptly move forward with Medicare for All, and it is also very obvious to the various vested interests that currently fare well under our fragmented, dysfunctional system. These opponents of Medicare for All have aligned themselves in yet another organization to fight Medicare for All: the Alliance to Fight for Health Care. They have decided to support a temporary expansion of COBRA to fill in some of the void caused by the pandemic, a logical choice for them since COBRA is already a temporary insurance program designed to provide coverage during intervals of unemployment. This would provide the least disruption to our current financing system, allowing them to eventually pick up where they were before the onset of the pandemic.
Bernie Sanders has a much better idea. He proposes filling in the void with Medicare. It would be much more effective and less expensive than the COBRA expansion. So as an urgent measure his Health Care Emergency Guarantee Act would be far better. Everyone would get the health care they need, and it would be affordable.
Better yet, when the public sees how effective Medicare can be, it doesn’t take much imagination to see substantial reinforcement of the support that the Medicare for All proposal already has. At the end of the pandemic, the public would be nearly unanimous in their support for Better Medicare for All. Yet some Congressional Democrats, unions such as UNITE, and Families USA are joining big business on the COBRA bandwagon. We are at risk of losing the battle if we don’t take greater measures to overcome our inertia. This is the opening we’ve been looking for, and we should take it.
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