An unprecedented number of people are losing their jobs in the United States right now. Because of the employer-dependent health care labyrinth we have set up, that means an unprecedented number are also losing their health insurance. The new group of uninsured only adds to the huge chunk of the country—nearly 30 million people—that were already uninsured before the coronavirus hit.
Private health insurers’ primary motive isn’t keeping people healthy, but to cut costs, maximize profits, and deny coverage to boost their bottom line. Yet Democrats’ big idea to help insure people is to effectively subsidize that largely reviled industry. Vox reported on Tuesday that House Democrats are going to push for a bill to fully cover premiums for COBRA, a health insurance program that allows workers to keep buying into their employer-sponsored plans after they are laid off.
The switch would theoretically make it easier for some people to stay on their employers’ plans, since COBRA is normally cost-prohibitive for people, especially when they’ve just lost their income—often running well over $1,000 a month.
Here’s how the bill would work, according to Vox:
COBRA has been around since the mid-1980s, but the program got extra subsidies during Congress’s 2009 economic stimulus bill, when it covered about 65 percent of a laid-off person’s health insurance premium costs. Still, lawmakers later found that wasn’t enough to get people on board with the program if their costs were still too high. … The Worker Health Coverage Protection Act would expand that to 100 percent coverage, both for laid-off workers and furloughed ones. In the case of laid-off employees, these new COBRA subsidies would cover both the employee and employer portions of the premium costs. In the case of furloughed workers, the bill would just cover the cost of the employee’s premiums because the employer would continue to pay in as well.
But subsidizing overpriced premiums just sends money directly to private insurers and providers, without eliminating deductibles or copays. It also does nothing to help the millions of people who never had employer-sponsored health insurance in the first place.
Instead, Democrats could simply push to expand a public system like Medicaid, which would help cover people regardless of whether or not they had employer-sponsored insurance in the past. Or they could push for an emergency version of Medicare-for-All, as Bernie Sanders and Pramila Jayapal are proposing, which would reimburse all out-of-pocket costs for all necessary treatments during the pandemic, without lining the pockets of private insurers.
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But Democrats went with private health insurers, which sent a letter asking Congress to fully subsidize COBRA premiums during the pandemic, meaning the party literally did what they were told. Large medical insurers are one of the few industries in the country right now that aren’t worried about the coronavirus recession. "We're not expecting a material financial impact," a top Cigna executive said at a recent health care conference. The reasoning is that any expensive treatments related to coronavirus will be offset by the delay or cancellations of elective procedures—and if they aren’t, insurers will just raise premiums next year, and Americans will continue to have to pay them no matter what, because they don’t want to die.
The policy solutions that Democrats are pushing are designed to disrupt the existing system as little as possible. But this is a moment for the party to rethink our system’s dependence on employer-sponsored insurance and deference to the insurance industry overall. The pandemic has clarified just how much our system is a complete failure; not only during a nation-wide health crisis, but also in “normal” times too.
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