At one point during the March 15 Democratic presidential primary debates, Bernie Sanders attempted to leverage the government’s ineffective response to coronavirus by arguing that it exposes the weakness and dysfunctionality of our private insurance system. He also put in a plug for his signature Medicare-for-all plan.
Joe Biden countered that a single-payer system didn’t exactly save Italy, which at the time was grappling with about 27,000 cases of COVID-19. A country’s ability to enforce social distancing and to supply personal protective equipment, Biden asserted, is separate from its insurance system.
Sanders exited the race for the nomination April 8, a move which the Vermont senator acknowledged was expedited by the pandemic. But as coronavirus rolls on, his vision may yet be realized. The possibility for some form of national insurance (aka fundamental healthcare reform) is quickly shifting from a mere liberal agenda item to a realistic talking point of practical relevance to an increasing swath of the population.
Exhibit A is the upheaval in the labor market, which became even more apparent Thursday morning when more than 4.4 million people were added to the ranks of the unemployed. For the five weeks ended April 18, workers filed more than 24 million new claims for unemployment insurance, according to data from the Department of Labor. It’s the most sudden spike in jobless claims since the government started tracking the numbers back in 1967.
To put that into perspective, the jump in unemployment claims is well over 20 times what it was in the pre-coronavirus period, and over five times the worst five-week stretch of the Great Recession of 2008, according to an analysis by the Economic Policy Institute (EPI).
And Americans aren’t just out of work; many have likely also lost their health insurance. Roughly half of all U.S. workers get health coverage via their employers. By April 11, said the EPI, about half of the more than 20 million newly unemployed (about 9.2 million) were at high risk of losing their employer-provided health insurance.
With such extreme numbers of people being left exposed at the worst possible time, will COVID-19 finally force a reckoning in how America and Americans get healthcare?
“The sudden shock to employer-sponsored insurance, increase in the uninsured population, and turbulence to the healthcare system caused by the pandemic could transform healthcare politics,” noted Jonathan Oberlander, PhD, professor and chair of social medicine, professor of health policy & management, University of North Carolina at Chapel Hill. “That could enhance the political prospects of the public option, which would create a Medicare-like government program for persons under age 65, backed by Sen. Joe Biden.”
Biden actually said he wants to lower the age of eligibility for Medicare from 65 to 60, as the presumptive Democrative nominee looked to court some of Sanders’ “Medicare for all” fans. “Whether [fallout from the virus] could break down the formidable barriers to Medicare-for-all is a more difficult question,” Oberlander wrote in response to emailed questions.
Those barriers could be cracking under the strain. The individual health insurance exchanges set up by the Affordable Care Act and Medicaid could see record enrollment in coming months as these unemployed seek to reinstate coverage. Those who are sickest are likely to seek care first. Some could obtain short-term COBRA coverage – paying out of pocket the full cost of their employer plan – as others lose insurance altogether.
People who lose employer-sponsored coverage could find themselves facing expensive medical bills for non-COVID-related issues that would have been covered by their previous employer. For those lucky enough to have jobs, coverage of pandemic-related care is far from guaranteed, which could lead to consumers shouldering more of the economic burden.
Not only is there an “air of volatility” in employer-sponsored insurance, but this crisis is also exposing that “the framework for a state health insurance safety net for people who lose their jobs varies dramatically depending on the state you’re in,” said Chris Sloan, associate principal in Avalere’s health practice.
The ACA has tried to create some form of minimum standard across the country both through Medicaid for the very poor and then subsidies on the exchange markets for people from around the federal poverty line to a little bit higher incomes. But there’s been varied adoption of those measures, partly due to the Supreme Court’s case giving states the option of Medicaid expansion.
For instance, in California, Medicaid covers people who earn up to 138% of the federal poverty level, and subsidies on the state-run exchanges provide insurance coverage for those making up to 400% of the poverty limit, said Sloan, while in Texas, which still has a federal exchange run by Healthcare.gov, there’s a gap between adults’ Medicaid eligibility and the start of the federal subsidies.
“If you lose your job in California, it’s different than if you lose your job in Texas,” he noted.
Swelling Medicaid rolls could become a financial issue for states as they grapple with providing coverage to an increasing share of their citizens. And for the 14 states that opted not to expand Medicaid coverage under the ACA, the administration’s recently proposed Medicaid block grant program could be for naught.
The dysfunction in the health insurance system, exacerbated by COVID-19, will provide new momentum to advance us toward something different, said Joe Paduda, principal of Health Strategy Associates.
“In the next five years, we’ll have massive changes to our healthcare reimbursement and delivery system,” he predicted. “The reason I say that is, once things can no longer continue, they won’t.”
Paduda foresees the country changing the way insurance is funded. His ideal national benefit plan resembles that of Switzerland or Germany, where there’s one fee schedule and identical reimbursement for all plans, and insurers are barred from using benefit design to discriminate which patients they enroll. People would participate through taxes and partly through their employers contributing, and everyone would be insured via an enforceable mandate.
“That’s going to get us to a much better place than we are today,” he said.
The current choices of high- or low-deductible plans – where people pay for their first several thousand dollars of care, after which the plan picks up the tab – would pivot to a co-insurance model, where the patient pays a percent and the plan picks up the majority.
“What that does is, it allows you to access care [even] if you don’t have $5,000 in your deductible account,” said Paduda. “It also ensures that people who have high-cost conditions have skin in the game for a lot longer than they do today.”
Politically, options like this are becoming more prominent. Multiple candidates have advocated for some sort of government-sponsored insurance. The public option Biden is proposing could be the start of a gradual expansion of Medicare. Kaiser Family Foundation’s Larry Leavitt described it to Axios as sort of “‘Medicare for more’ rather than Medicare for All.”
These options will continue to be discussed. Despite some big faults being exposed by the widespread, rapid job losses and loss of healthcare, though, not everyone thinks the calamitous spread of coronavirus is going to precipitate a massive change in how the U.S. funds healthcare.
“I don’t think that this is the first domino to a national healthcare system,” said Sloan, referencing the recession of 2008. The large increase in the uninsured at that time (see above) was followed by passage of the ACA a couple of years later. Although there are some similarities between the economic downturn we’re currently experiencing and that earlier one, he said that the reforms put in place since then could mitigate the need for something new.
People will have a lot easier time managing the current crisis and its impact on jobs than they would have 10 to 15 years ago, before the ACA. In terms of whether this will push the country forward to Medicare for all, or some variation, several other factors could go against that, said David Kaplan, director of the healthcare group at S&P Global.
For one, there are additional pressures on federal and state budgets – from the multi-billion-dollar stimulus package, lost tax revenues and the weakened economy – that could make expansion of health programs more difficult, he said.
Another is the November election. What the American populace thinks about President Trump’s effectiveness throughout this process is something that will be debated into the late innings. Regardless, Kaplan added, “Whoever wins the election is likely to have a significant impact on national health policy over the next four years.”
And third, opinions differ on whether the government is well-equipped to handle national healthcare. “There are plenty of reasons why we as a country were not more prepared than we were [for coronavirus], but the argument will undoubtedly be made by some that government is not the best way to run a complex industry,” said Kaplan.
There’s no obvious way the virus influences those arguments, he said. To a large extent, it depends on how the outbreak plays out. If the country brings the pandemic under control sooner rather than later, some could argue the government is effective, while a prolonged crisis may undercut backers of big government.
Popular sentiment, too, is predicated on the virus’ longevity. If COVID-19 is limited to the first half of the year, a greater proportion of treatment cost will be borne by the insured through co-pays and deductibles (although, some states have asked insurers to waive cost-sharing for coronavirus treatment). However, if the pandemic continues its deadly path into the latter part of the year, when the insured have met their cost-sharing requirements, more of the medical costs will be borne directly by health plans and the government.
“The big question is, how big of an impact this is going to have on the economy,” said Kaplan. “Everyone is trying to make projections, including those of us in the business of making economic projections. But we haven’t really seen this type of disruption.”
There is an argument that, once we bounce back, people who are harmed financially will assume more fiscal conservatism than before, which will restrain the economy, and post-crisis we could enter an economic recession. “That’s the uncertainty,” noted Kaplan. “There’s no precedent we can refer to in the last 100 years, which makes this a really interesting question that we’re all trying to guess at.”
Crisis or no, people held philosophical views about which style of insurance is better for the country. And coronavirus will continue to bring to the fore those arguments over the relative merits of our hands-off style of government, vis-a-vis paying for healthcare.
Few have voiced their views on that topic more passionately than Bernie Sanders. And while he’s withdrawn from the political scene, as long as the pandemic is with us, the issues he championed – specifically the inequities of the current health insurance system – will continue to reverberate.
Does coronavirus create the conditions for Sanders’ legacy to come to fruition?
On the one hand, Oberland noted, “We don’t know the trajectory of this pandemic – the longer it lasts, the harder it hits, the more persons that are affected, the greater the chances to pass radical reform. But the opposition to Medicare for All – ideological, stakeholder, partisan, public – will not fade away simply because there is a crisis.”
From the August 01, 2020 Issue of MM+M - Medical Marketing and Media